A revolving credit facility (RCF) is an entity, such as a bank, that lends money under a revolving credit agreement. In a revolving credit agreement, the terms are established governing the borrower’s ability to borrow and repay money, up to a maximum amount, without a fixed repayment schedule. For example, a borrower may draw down $150 million of its $200 million limit, repay $75 million, and still have another $125 million available.
The revolving credit facility may charge a commitment fee for the use of the funds, and the interest rate for each individual draw may vary with market conditions.