MAKE YOUR FREE Revolving Credit Agreement
What is a Revolving Credit Agreement?
A Revolving Credit Agreement is a contract between a lender and a trusted borrower, providing the latter with a revolving line of credit. Revolving Credit Agreements give the borrower access to a fixed amount of credit they can use over a period of time – once it’s spent, it must be paid before additional charges are applied.
Revolving Credit Agreements are beneficial for both parties involved, as borrowers do not have to pay for a lump sum loan every time they want to use credit, and lenders may gain a long-lasting and high-paying customer.
A Revolving Credit Agreement is pretty simple, and is often just between an individual seller or store and a customer. Whether you’re looking to sell items on an extended timeline to trustworthy buyers or you’re looking to purchase goods on credit, a revolving credit line can help make business a little easier for both buyers and sellers. Rocket Lawyer can help you set out the terms with our Revolving Credit Agreement template, so you can get started right away!
When to use a Revolving Credit Agreement:
- 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 revolving line of credit.
Sample Revolving Credit Agreement
The terms in your document will update based on the information you provide
This document has been customized over 12.6K times
Legally binding and enforceable
Ask a lawyer questions about your document
Sign this document online for free with RocketSign®
Revolving Credit Agreement
This Agreement is made and entered into on , between , , , , hereinafter the Seller; and , , , , hereinafter the Buyer.
| 1. | Establishment of Account |
Under the terms and conditions set forth in this Agreement, Seller and Buyer agree to the establishment of a revolving credit account (Account) under which Seller, at its option, agrees to permit Buyer to make purchases from time to time and to debit Buyer's Account for the cash price of each purchase and any related finance charges as provided for in this Agreement. Buyer agrees to make payments on the unpaid principal balance in the Account periodically as provided for in this Agreement, and agrees that all purchases made under this Agreement will be made on the terms and conditions set forth in this Agreement and in any documents that evidence the purchases made under this Agreement that are incorporated by reference into this Agreement.
| 2. | Maximum Amount |
The unpaid principal balance in the Account may not exceed at any one time.
| 3. Periodic Statement |
Seller will provide Buyer with a statement as of the beginning or each calendar month in which there is any unpaid balance under this Agreement. The statement will include the unpaid balance at the beginning and end of the period; an identification of the goods purchased during the period, the cash purchase price, and the date of each purchase; any payments made by Buyer or other credits to Buyer during the period; and the amount of any finance charge.
| 4. | Calculation of Finance Charge |
A finance charge will be imposed at a rate of percent a month. In calculating the amount of the finance charge, the rate will be applied to the unpaid balance at the beginning of the period. The balance to which the rate will be applied includes any arrearages or finance charges. For purposes of computing the finance charge, a month runs from one date in a month to the corresponding date in the following month, or, if there is no corresponding date, then to the last day of the following month. A day is considered 1/30th of a month if computation is made for a fraction of a month. If the finance charge as computed is less than $1 for any monthly period, a finance charge of $1 for the month will be imposed.
| 5. | Payment and Delinquent Charges |
Buyer agrees to pay an amount equal to the minimum payment as stated in the periodic statement by the due date provided in the periodic statement. If any payment is late by days or more, a delinquent charge in the amount of will be imposed. In no event will the delinquent charge for any one installment exceed .
| 6. | Prepayment |
Buyer may pay any part or all of the unpaid balance on the Account at any time. No prepayment charge will be imposed for any prepayment.
| 7. | Governing Law |
This agreement will be governed in all respects by the laws of the State of .
| 8. | Cancellation |
This Agreement may be cancelled at any time by either party giving written notice of cancellation to the other. Notice of cancellation shall not affect either the Buyer's obligation to repay any outstanding indebtedness to Seller or Seller's right to collect the indebtedness.
| 7. | Signatories |
This Agreement shall be signed by on behalf of by , and by . The Agreement is effective as of .
SELLER:
| By: | Date: |
,
BUYER:
| By: | Date: |
Our quality guarantee
We guarantee our service is safe and secure, and that properly executed Rocket Lawyer legal documents are legally enforceable under applicable US laws.
Need help? No problem!
Ask a question for free or get affordable legal advice when you connect with a Rocket Lawyer network attorney.
