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 This usage is outdated, wrong, and might expose the bank to legal liability.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
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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
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A bank line of credit for which customers pay fees and can then take money according to their needs. Also known as a revolver.
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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.
Financial and business terms. 2012.