What Is a Revolving Business Line of Credit & How Does It Work?
Suppose you're a business owner who could use cash on hand but doesn't have it readily available. This is when a revolving line of credit would come in handy. Let's make clear what these terms mean.
A line of credit is a determined amount of funds available from a financial institution to a borrower. Once the borrower pays back any borrowed money, the line of credit ends. For businesses who repeatedly want to tap this resource, a revolving line of credit works better, though. A revolving line of credit continually replenishes the amount available to borrow once a borrower pays back any amount owed.
A credit card is a prime example of revolving credit. Each month, the cardholder borrows based on a limit. If a cardholder has a credit limit o…