What is Revolving Credit?

Revolving credit is money that a bank institution lends to business and individuals that want to borrow money without having to reapply for loans once they are paid off. It is a line of credit that can be used when needed from the bank. Depending on the bank the line of credit can be paid off monthly or overtime, but you will be paying interest and other fees if applicable. Also the bank will set a limit on how much can be borrowed. In my experience the revolving credit was renewed yearly. An example was when I worked for a non-profit that had revolving credit. We had fundraisers throughout the year that required cash upfront, so we had to draw on the line of credit months before the events occurred to pay a deposit to the vendors. That allowed the money in the bank to be used for current operations and not restrict cash flow for the operations. Once the fundraiser occurred the donation made from the events let the non-profit pay back the money drawn from the line of credit.