revolving line of credit

A type of credit facility. A term that can be confusing, with different banks using the term to describe different types of credit facilities.
1. In some banks, "revolving line of credit" refers to a credit facility that permits the borrower to draw down and/or repay amounts up to a specified maximum at any time.
Called a line of credit by other banks.
2. In other banks, the name "revolving line of credit" is used to distinguish between "regular lines of credit," (situations in which the bank is not legally committed to make advances) and "revolving lines," (situations in which the bank is legally committed to make advances.) This usage is outdated, wrong, and might expose the bank to legal liability.
3. Large banks, primarily, use the term to refer to a combination of a line of credit and a term loan. Typically it starts out as a line for a one-to-three year period, after which, on a previously determined date, the outstanding balance converts to an amortizing term loan. American Banker Glossary
————
A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. Bloomberg Financial Dictionary

* * *

   A bank line of credit for which customers pay fees and can then take money according to their needs. Also known as a revolver.

* * *

revolving line of credit UK US noun [C or U] (also revolving credit, revolving loan)
FINANCE, BANKING a financial arrangement in which a bank agrees to lend a particular amount of money to someone, and allows them to borrow more money if part of the original loan is paid back: »

A revolving line of credit may be one of the most valuable financial tools that your business can have.

Compare CREDIT LINE(Cf. ↑credit line)

Financial and business terms. 2012.

Look at other dictionaries:

  • Revolving line of credit — A bank line of credit on which the customer pays a commitment fee and can take down and repay funds according to his needs. Normally the line involves a firm commitment from the bank for a period of several years. The New York Times Financial… …   Financial and business terms

  • revolving line of credit — overdraft that is approved for limited periods of time …   English contemporary dictionary

  • non-revolving line of credit — See line of credit …   Financial and business terms

  • line of credit — A type of credit facility. The specific meaning of the term varies from bank to bank. Since the various uses often cause confusion, two definitions are presented here. In this book, the second definition is used. (1) A type of loan that permits a …   Financial and business terms

  • Warehouse line of credit — A warehouse line of credit is a credit line used by mortgage bankers. It is a revolving line of credit in which a mortgage banker arranges for a loan from a warehouse lender, thenthe original note from the loan is kept by the warehouse lender,… …   Wikipedia

  • Signature line of credit — A signature line of credit is a revolving line of credit that is not backed by collateral; i.e., the sole criterion for the decision to grant the loan and establish the terms thereof is an assessment of the customer s credit rating. Also known as …   Wikipedia

  • Revocable Line Of Credit — A source of credit provided to an individual or business by a bank or financial institution, which can be revoked or annulled at the lender s discretion or under specific circumstances. A bank or financial institution may revoke a line of credit… …   Investment dictionary

  • revolving credit — ➔ credit1 * * * revolving credit UK US noun [C or U] ► FINANCE, BANKING REVOLVING LINE OF CREDIT(Cf. ↑revolving line of credit): »The recent sharp increase in bankruptcy filings has been primarily caused by revolving credit …   Financial and business terms

  • credit line — ˈcredit line also ˌbank (ˈcredit) ˌline, ˌline of ˈcredit noun [countable] BANKING COMMERCE an arrangement with a bank for a loan or a number of loans: • The auto maker is currently negotiating a new $1.8 billion credit line that would replace a… …   Financial and business terms

  • revolving loan — UK US noun [C] ► FINANCE, BANKING REVOLVING LINE OF CREDIT(Cf. ↑revolving line of credit): »Companies that are restructuring are struggling to get revolving loans from lenders …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.