Revolving credit facility

A credit line a business can draw, repay, and draw again within its terms. It commonly funds working capital and may also fund acquisitions or other permitted purposes.

Revolving credit facility in practice

Hypothetical: a seasonal business draws on a revolver to build inventory before its peak and repays the borrowing as customer receivables are collected. Each draw remains subject to the facility’s availability and conditions.

Working capital · Senior debt · Covenant · Debt capacity · Asset-based lending · All of the glossary