Meaning & use
revolving credit facility
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Meanings
nouncountablebusinessfinance
A loan arrangement that lets a company borrow money repeatedly up to a set limit, repay it, and borrow again.
Grammar: Countable: use "a revolving credit facility" or the plural "revolving credit facilities."
Patterns
- have a revolving credit facility
- use a revolving credit facility
- a revolving credit facility of $10 million
The company has a $50 million revolving credit facility with its bank.
They used the revolving credit facility to cover short-term cash needs.
The revolving credit facility allows them to borrow, repay, and borrow again.
nouncountablefinance
A type of credit account, often for consumers, that can be used again as soon as you repay what you borrowed.
Grammar: Countable but usually used with "a" or in the plural; often shortened to "revolving credit."
Patterns
- a revolving credit facility
- open a revolving credit facility
- revolving credit facility agreement
A credit card is a common example of a revolving credit facility.
The bank offered her a revolving credit facility with a $5,000 limit.
Unlike a personal loan, a revolving credit facility lets you borrow again after you repay.
Word forms
| plural | revolving credit facilities |
|---|
Common combinations
- revolving credit facility agreement
- The lawyers drafted the revolving credit facility agreement.
- revolving credit facility limit
- The revolving credit facility limit was raised to $100 million.
- draw down on a revolving credit facility
- The firm drew down on its revolving credit facility to fund the acquisition.
- renew a revolving credit facility
- They renewed the revolving credit facility for another three years.
- secured revolving credit facility
- The company arranged a secured revolving credit facility backed by its assets.
Synonyms and how they differ
- line of credit
- A more general term for any arrangement that lets you borrow up to a limit; it can be revolving or not, so it is less specific than "revolving credit facility."
- credit line
- An informal everyday equivalent; it often refers to consumer credit, while "revolving credit facility" is more common in business and banking contexts.
- revolver
- A very informal finance term for a revolving credit facility; it is used mostly by professionals and is not suitable for formal writing.
Word family
- revolve verb
- To go around a center point; in finance, the idea of credit that "revolves" or renews as you repay.
- revolving adjective
- Describing something that turns around or renews itself, as in "revolving credit."
- credit noun
- The ability to buy now and pay later, or money borrowed from a bank.
- facility noun
- In finance, an arrangement or service provided by a bank, such as a loan or credit line.
Commonly confused: revolving credit facility or term loan? revolving credit facility or overdraft?
revolving credit facility vs term loan
A term loan gives you a fixed sum that you repay over a set period and cannot borrow again; a revolving credit facility can be borrowed from repeatedly.
revolving credit facility vs overdraft
An overdraft lets you spend more than your account balance, usually for a short time and often with high fees; a revolving credit facility is a separate credit arrangement with a set limit.
Practice
Which sentence uses "revolving credit facility" correctly?
Choose one answer.
Option 0 is correct because a business can borrow from a revolving credit facility and repay it later. Option 1 is wrong because a revolving credit facility is not a payment card used at a checkout. Option 2 is wrong because a revolving credit facility does not have fixed installments like a term loan. Option 3 is wrong because a credit facility is for borrowing, not for saving.
Make it your own
Write a sentence using “revolving credit facility”, then check it and compare it with the examples above.