Revolving Loan Facility

AAA

DEFINITION of 'Revolving Loan Facility'

A financial institution that allows the borrower to obtain a business or personal loan where the borrower has the flexibility to decide how often they want to withdraw from the loan and at what time intervals. A revolving loan facility allows a company to drawdown, repay and re-draw loans advanced to it. This type of loan is considered a flexible financing tool due to its repayment and re-borrowing flexibility.

INVESTOPEDIA EXPLAINS 'Revolving Loan Facility'

A loan from this facility is provided over a specific period of time, usually one, three or six months. It is not considered a term loan because, during this allotted period of time, the facility allows the borrower to repay or take the loan out again. It is also different from a fixed monthly payment loan because a revolving loan lets borrowers use as much of the credit as is available and only pay interest on what they have used.

RELATED TERMS
  1. Revolving Credit

    A line of credit where the customer pays a commitment fee and ...
  2. Term Loan

    A loan from a bank for a specific amount that has a specified ...
  3. Credit Facility

    A type of loan made in a business or corporate finance context. ...
  4. Commercial Loan

    A debt-based funding arrangement that a business can set up with ...
  5. Facility

    A formal financial assistance program offered by a lending institution ...
  6. Unsecured Loan

    A loan that is issued and supported only by the borrower's creditworthiness, ...
Related Articles
  1. Should You Borrow From Your Retirement ...
    Retirement

    Should You Borrow From Your Retirement ...

  2. The Importance Of Your Credit Rating
    Credit & Loans

    The Importance Of Your Credit Rating

  3. College Loans: Private Vs. Federal
    Credit & Loans

    College Loans: Private Vs. Federal

  4. The Benefits Of Mortgage Repayment
    Home & Auto

    The Benefits Of Mortgage Repayment

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center