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OTHER NAMES Revolving Line of Credit Agreement

What is a Revolving Credit Agreement?

You're looking to buy goods - on credit. You're going to need revolving credit with the seller first. Or maybe you sell items and are willing to extend credit to trustworthy buyers. You need to get the promise in writing. A Revolving Credit Agreement spells out the loan terms.

Not all loans require stacks of paperwork. A Revolving Credit Agreement is pretty simple, and is often just between an individual seller or store and a customer. Maybe the customer makes large purchases regularly. Or maybe the customer owns a small business but their process for getting checks written takes a few days. If you're the seller, you can still benefit from a loan arrangement. You might have just secured a high-spending customer for life. And if they don't pay on time? You can arrange for a late penalty or interest with a revolving line of credit. A revolving credit line can help make buisness a little easier for both buyers and sellers.

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 line of credit.

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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: