What are Revolving Facilities?

business-woman-at-bank-credit-facilities

Revolving facilities come up in Yieldstreet’s offerings and we thought it would be beneficial to shed some additional light on the concept for our investors. 

Revolving credit facilities provide a rolling agreement that enables borrowers to have access to a flexible financing tool. Revolving is an apt title for this type of loan, since once an outstanding amount is paid down, the borrower can use the credit again. Think of it as a cycle that includes use of credit, repayment, and reuse. 

This type of credit is particularly attractive for businesses that need to borrow funds as needed and that need a renewable credit source. Yieldstreet uses a type of revolving facility in some of our offerings, but unlike traditional revolving facilities, you’ll earn interest on the entire facility amount—not just what is utilized by the borrower. 

close-up-of-credit-cards-revolving-facilities

Real World Applications of Revolving Facilities

When one thinks of a revolving facility, credit cards typically come to mind. Borrowers are provided a limit and can utilize the line of credit, and once repaid, can once again borrow more. The payments are based on the amount that is borrowed, and interest accrues on that amount.  In the corporate world, revolving facilities are usually used to fund a company’s ongoing working capital needs as these needs vary based on such factors as the company’s growth rate and any seasonality in its product lines. Revolving facilities provide companies with financing certainty, while allowing companies to increase or decrease usage as business conditions dictate.   

Short Term Notes

Another example is short term notes. Short term notes are very similar to revolving lines of credit but are granted for a term of one year or less, hence “short term.”  In the corporate world, short term borrowings funded via the capital markets rather than through financial institutions are called commercial paper borrowings and generally have a term of 270 days or less.   

On May 8, 2019 we launched a short-term note offering to investors, which provides prefunding for upcoming offerings before they launch on our platform. To learn more about Short Term Notes with Yieldstreet, click here

Revolving Facilities Wrap-Up

At Yieldstreet, we’re always seeking ways for our investors to generate wealth, and this includes new opportunities and products. We are firm believers in this business model. 

We are excited for an upcoming offering that involves revolving facilities and hope that you have found the information in this post helpful. If you have any questions or would like to learn more, please let us know by emailing [email protected] 

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness, or any other aspect of such website (or article contained therein).
How helpful is this content?

Share this article:

Join a community of 350,000+ members

  • Gain access to unique offerings previously reserved for the ultra-wealthy

  • Customize your portfolio for income, growth, or a balance of both

  • Get started today and earn an average IRR of over 8%

What investors are saying about Yieldstreet

Apr 2022

The due diligence, risk management, and product education materials are thorough, excellent, and easy to use and understand.

Manoj J
Member since 2019
Apr 2022

Excellent and unique selections that I can't find elsewhere.

Jonathan S
Member since 2019
Apr 2022

The platform delivers in a very concise manner. Easy to get a clear understanding at a glance from the web or mobile app.

Tim S
Member since 2021
The testimonials presented on this page have been provided by actual investors in Yieldstreet funds without compensation. Yieldstreet has selected the testimonials, and certain testimonials have been edited to remove personally identifiable information and for brevity. Testimonials were not selected based on objective or random criteria, but rather were selected based on Yieldstreet's understanding of its relationship with the providers of the testimonials. The uncompensated testimonials presented here may not be representative of other investors' experiences, and there can be no guarantee that investors will experience future performance or success consistent with the testimonials presented.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.5B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.