Revolving Credit Facility (Revolver)
Corporate Credit Analysis glossary · Credit Metrics & Debt Schedule Modeling
Definition
A committed line of credit that can be drawn and repaid within the commitment period. Used for working-capital management and liquidity; the undrawn portion provides backup liquidity but earns only a commitment fee until drawn.
Revolving Credit Facility (Revolver) in plain English
A revolving credit facility, or 'revolver,' is basically a company's business credit card: a bank pre-approves a set borrowing limit, and the company can draw cash when it needs it, pay it back, and borrow again — over and over within the agreed period. Companies lean on it to smooth out timing gaps, like covering payroll or buying inventory before customer payments arrive. The clever part is the safety-net value: even the part they haven't borrowed sits there as guaranteed emergency cash, and they pay only a small 'commitment fee' to keep that unused portion available until they actually draw on it.
Also called: Revolver
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