What is a Revolving Credit Agreement?

Question

Accepted Answer

You're looking to buy goods - on credit. You're going to need revolving credit with the seller first. Or maybe you sell items and are willing to extend credit to trustworthy buyers. You need to get the promise in writing. A Revolving Credit Agreement spells out the loan terms.

Use the Revolving Credit Agreement document if:

You are a Seller and willing to lend money to a buyer (a line of credit) to purchase goods from your business.
You would like to negotiate the purchase of goods under a line of credit.

Not all loans require stacks of paperwork. A Revolving Credit Agreement is pretty simple, and is often just between an individual seller or store and a customer. Maybe the customer makes large purchases regularly. Or maybe the customer owns a small business but their process for getting checks written takes a few days. If you're the seller, you can still benefit from a loan arrangement. You might have just secured a high-spending customer for life. And if they don't pay on time? You can arrange for a late penalty or interest with a revolving line of credit. A revolving credit line can help make buisness a little easier for both buyers and sellers.

Other names for this document: Revolving Line of Credit Agreement

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