What makes a line of credit "revolving"?

A revolving line lets a business draw funds, repay them, and draw again up to a set limit. The available credit replenishes as balances are paid down, so the same limit can be used repeatedly.

What is a credit limit on a line?

The credit limit is the maximum amount that can be outstanding at any one time. A business can use part or all of it as needed rather than taking the full amount at once.

What is a draw fee?

Some lines apply a small fee each time funds are drawn, charged as a percentage of the amount taken. Whether one applies depends on the specific arrangement.

How is a monthly cost estimated on a line?

A common approach converts an annual finance rate into a monthly figure by dividing it by twelve, then applies that monthly figure to the balance currently drawn.

How does a line differ from a lump-sum advance?

A lump sum is issued once and repaid on a fixed schedule, while a line provides ongoing access to funds that can be reused as they are repaid.

Is cost based on the full limit or only what is used?

Cost is generally based on the funds actually drawn, not on the entire approved limit, so an unused portion typically does not carry a charge.