Revolving credit

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Line of Credit

An agreement between a bank and a company or an individual to provide a certain amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time, but may take part of the funds at any time over a period of several years. This agreement is fairly common in situations in which a business must make payroll but does not always have the operating income to do so, especially when its operating income is seasonal or otherwise varies from month to month. It is also called open-end credit or a revolving line of credit. See also: Credit Card.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Revolving credit.

A revolving credit arrangement allows you to borrow up to your credit limit without having to reapply each time you need cash. As you repay the money you have borrowed, it is available to be borrowed again.

For example, if you have a credit card with a credit limit of $1,500 and you make a purchase of $400, the amount of credit you have available is $1,100. But when you repay the $400, your credit limit goes back to $1,500 -- assuming you haven't charged anything else on the card.

At any given time, your balance due may fluctuate from zero to the maximum credit limit. If you don't use the credit line in any billing cycle, no fees apply in most cases. But if you have a balance due and don't repay the full amount, finance charges are added to your next bill.

Some revolving credit arrangements, such as a home equity line of credit, may have a predetermined end date, but the majority are open-ended as long as you make at least the minimum required payment on time.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Its debt also includes the $200 million revolving credit facility.
The company said this facility will be used by the company to refinance the existing EUR100m multicurrency revolving credit facility that was signed on 31 March 2011 and for general corporate purposes.
The company has received the revolving credit facility from East West Bank.
This unsecured revolving credit facility raises the company's borrowing capacity to USD400m from the USD200m as well as provides an accordion feature allowing for an additional USD350m of capacity, subject to customary terms and conditions, resulting in a maximum borrowing capacity of USD750m.
Proceeds from the revolving credit facility have been utilised to repay the remaining balance of an existing $500 million syndicated facility which matured at the end of August 2013, according to a press release.
According to the company, this new agreement will replace a prior revolving credit facility agreement of the same amount, which had remained unused.
BANKING AND CREDIT NEWS-December 5, 2018-Atlanticus closes revolving credit facility with JPMorgan Chase Bank
Gray Television announced that it is proposing, subject to market and other conditions, to replace its existing priority revolving credit facility with a new pari passu five-year revolving credit facility, amend its current term loan, and incur up to $2.15B of additional term loans under its senior credit facility.
The new credit facility amends and restates the company's prior credit agreement and, (i) extends the maturity date to May 30, 2019 (which date may be accelerated in certain cases); and (ii) replaces the existing revolving credit facility and credit-linked facility with a revolving credit facility in an aggregate principal amount of up to USD200.0m and a term loan facility in an aggregate principal amount of up to USD100.0m, among other things.
Pharmaceutical company Teva Pharmaceutical Industries Ltd (NYSE:TEVA) revealed on Tuesday the execution of a new five-year, USD3.0bn unsecured revolving credit facility,
MarkWest Energy Partners LP (MarkWest) (NYSE:MWE), a master limited partnership engaged in the gathering, transportation, and processing of natural gas; the transportation, fractionation, marketing, and storage of natural gas liquids; and the gathering and transportation of crude oil, has executed a new USD700m senior secured revolving credit facility with a syndicate of banks.