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Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Credit cards are an example of revolving credit used by consumers. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day operations.
A revolving credit line allows borrowers to draw down, repay and reborrow as often as necessary. The facility acts much like a corporate credit card, except that borrowers are charged an annual commitment fee on unused amounts, which drives up the overall cost of borrowing (the facility fee).
Categorizing loan agreements by type of facility usually results in two primary categories: term loans, which are repaid in set installments over the term, or revolving loans (or overdrafts ) where up to a maximum amount can be withdrawn at any time, and interest is paid from month to month on the drawn amount.
The Credit Agreement replaces an existing credit facility entered into on July 20, 2017, and reflects substantially the same terms and conditions. ... The new revolving credit facility will ...
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Duke Realty's (DRE) amended and restatement of unsecured revolving credit facility allows the industrial REIT to lower its borrowing costs and offers sustainability-linked pricing incentive.
In practice, this length of time is generally between 10-20 days. Warehouse facilities typically limit the amount of dwell time a loan can be on the warehouse line. For loans going over dwell, mortgage bankers are often forced to buy these notes off the line with their own cash in anticipation of a potential problem with the note.
The debt is reported as a liability on the borrower's balance sheet and as an asset (specifically, a receivable) on the lender’s balance sheet. In some situations, the lender can actually repledge or sell the collateral the borrower used to secure the loan from the lender. In this instance, the borrower continues to recognize the receivables ...