revolver investment & finance definition

Short for revolving line of credit. A line of credit is given to a corporation in return for a commitment fee; the company can withdraw any or all of the credit line. Typically, revolving credit agreements are good for 364 days. If the company remains in good financial health, the revolving credit line is renegotiated. Banks consider revolvers risky because they have little profit incentive and limit the amount that can be loaned to other customers. Consequently, in tough economic times or when it is difficult to access the capital markets to sell stocks or bonds, banks are more conservative about issuing credit lines, or extend credit lines to only their best clients.