Revolving Line of Credit

Category: finance

A flexible credit facility allowing a business to borrow, repay, and re-borrow funds up to a fixed limit.

A revolving line functions like an enterprise credit card. Interest is charged exclusively on the active balance drawn, not the total limit. It serves as the primary cash-buffer tool for B2B corporations managing slow accounts receivable collection cycles.

Common Examples

• We utilized our revolving line of credit to smooth over our operating cash flow while waiting for the enterprise client to settle their 90-day invoice.
• The credit committee reviewed our historical liquidity ratios before increasing our revolving line of credit cap to two million dollars.