how do businesses use a revolving loan facility 
a revolving loan or line facility allows a business to borrow money as needed for funding working capital needs and continuing operations a revolving line is especially helpful during times of revenue fluctuations since bills and unexpected expenses can be paid by drawing from the loan drawing against the loan brings down the available balance whereas making payments on the debt brings up the available balance the financial institution may review the revolving loan facility annually if a company s revenue shrinks the institution may decide to lower the maximum amount of the loan therefore it is important for the business owner to discuss the company s circumstances with the financial institution to avoid a reduction in or termination of the loan a revolving loan facility provides a variable line of credit that allows people or businesses great flexibility with the funds they are borrowing example of a revolving loan facilitysupreme packaging secures a revolving loan facility for 500 000 the company uses the credit line for covering payroll as it waits for accounts receivable payments although the business uses up to 250 000 of the revolving loan facility each month it pays off most of the balance and monitors how much available credit remains because another company signed a 500 000 contract for supreme packaging to package its products for the next five years the packaging company is using 200 000 of its revolving loan facility for purchasing the required machinery 