Opening of revolving or reconstituting credit. Revolving credits are short-term credit lines subject to repeated renewal. The borrower has a borrowing authorization for a maximum amount contractually stipulated until a fixed date. Until that date, the borrower has the right to draw on the total outstanding credit that he can repay at the end of defined periods. The amounts reimbursed may be the subject of a subsequent drawing up to the final due date provided that there is no overrun of the total amount of the credit.
They are used in the financing of the working capital requirement.
Reducing revolving credit
Revolvin credit where the maximum amount authorized for one or more draws is reduced over time, on contractually defined dates (the reduction dates)