RCF
Revolving Credit Facility
Short definition
An RCF is a committed facility that can be drawn and repaid during the tenor, with a swinging balance. It is designed for a liquidity buffer and seasonal peaks, not for permanent working capital.
Detailed explanation
Interest runs on the drawn balance, a commitment fee on unused. A clean-down clause demands a zero balance for a period; permanent use is a breach. If it is not renewed at expiry, the drawn balance becomes a maturity wall.
Covenants and MAC can stop draws. An uncommitted overdraft is not an RCF.
Why it matters for the CFO
It is the bank leg of the 13-week budget. Funding permanent OWC on an RCF manufactures annual refinancing risk.
How to read it
Utilisation should swing with the season. Persistent 90%+ utilisation means the RCF has become a term loan.
Related calculators
Güven Sayılgan’s writing on this topic
Financial Flexibility and Financing Constraints: An Assessment from the Literature to the Turkish Context
Financing constraints and financial flexibility are complementary frameworks. Drawing on the literature, this note offers practice-oriented reflections for fina
4 min read
Read → FinansThe Hidden Rules of Getting Bank Credit
In bank lending decisions, what matters most is not only the documents submitted but the risk profile the firm presents. A strong application should include a s
3 min read
Read → FinansThirteen-Week Rolling Cash Budget
A thirteen-week rolling cash budget shows, week by week over roughly the next three months, expected cash inflows and outflows and when financing needs may aris
5 min read
Read → FinansWhen Do Firms in Türkiye Experience Cash Squeezes Most Often?
Cash squeezes are not driven by tax dates alone; interest rates, banks’ appetite to lend, the exchange rate, inventory costs, collection periods, and sales temp
3 min read
Read →Read these first
Related terms
What to learn next
Definitions are educational. They are not investment, credit or tax advice.