Revolving Credit is a term that refers to a short-term credit provided by the bank. It is a combination of overdraft and short-term bank loan. It is a credit with the option of further renewal. The credit has for a given period an agreed financial limit and the client can repeatedly draw funds up to the limit when its repaid.
As a collateral, receivables, but also real estate, term deposit, bank guarantee, provisions or combinations thereof can be used. The interest rate is usually lower than bank overdraft thanks to the effectiveness of the credit.
Revolving Credit in practice: Revolving credit is intended for short-term financing of current assets, primarily receivables, marginally goods or supplies.
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