Revolving credit is a line of credit which requires the customer to pay commitment fees and then use it when needed. It is usually used for operating purposes and can fluctuate each month depending on the customer’s current cash flow needs. The bank and the concerned financial institution in agreement with the customer guarantees a maximum amount to be loaned.
A revolving letter of credit is a single letter of credit used for multiple shipments over a long period. If the buyer and seller are trading with the same commodity regularly over a long period then they may choose to work with a revolving letter of credit. It is issued by the banks or financial institutions to the clients. It is written to mention the details of revolving credit accounts,i.e., the right to withdraw a certain amount.
The following letter is the sample of a revolving letter of credit regarding the purchase of land.
Table of Contents
Revolving Letter Of Credit Writing Tips
- The letter should be clear and precise.
- The main reason for writing the letter should be spelt out.
- The details regarding the customer and the bank should be clearly stated.
- The terms and conditions of the bank or financial institution should be to the point.
Revolving Letter Of Credit Template
Use our free Revolving Letter of Credit to help you get started.
From,
___________
___________
___________.
Date:___________. (Date on which letter is written)
To,
____________
____________
____________.
Subject: ______________. (Main purpose of writing the letter)
Dear__________, (Sir/Madam)
On behalf of ______________ (name of the bank), I am pleased to present to you the availability of a revolving credit facility with reference to the request made by you for the purchase of land and construction of farmhouse.
Below are the terms and conditions regarding the credit facility:
- Revolving credit line of maximum ________(mention rupees) will be given
- Interest rate of _____(per annum) loan amount must be payable by the first of every month of the credit period.
- The credit is repayable on demand and can be availed up to __________________.(Mention the time period)
- For security reasons we require a guarantor from ______________(name of the bank)
- The borrower must not execute any other credit facility with another financial agency.
If you agree to the above terms & conditions, call us at_________ (mention the contact number) and enjoy the offered credit facility. If you have any query regarding the same feel free to contact us.
Thanking you.
Warm regards,
_____________ (Name and signature )
_____________. (Name of the organization)
Sample Letter
From,
International Bank,
Melbourne.
Date: May 28, 2005.
To,
Kenji Meyos
Quarter no.256, Golden Street,
Melbourne.
Subject: Revolving credit facility.
Dear Sir,
On behalf of International Bank, I am pleased to present to you the availability of a revolving credit facility concerning the request made by you for the purchase of land and construction of farmhouse.
Below are the terms and conditions regarding the credit facility:
- Revolving credit line of maximum $55,000 will be given.
- Interest rate of 4.5% per annum loan amount must be payable by the first of every month of the credit period.
- The credit is repayable on demand and can be availed up to May 28, 2007.
- For security reasons, we require a guarantor from International Bank.
- The borrower must not execute any other credit facility with another financial agency.
If you agree with the above terms & conditions, call us at +615896523 and enjoy the offered credit facility. If you have any query regarding the same feel free to contact us.
Waiting for your positive response.
Thanking you.
Warm regards,
Stephen Lee
Managing Officer at International Bank.
Email Format
The following is the email format to be followed for a Revolving Letter of Credit.
From: name@email.com
To: name@email.com
Subject: ________________. (Main purpose of writing the mail)
Dear__________, (Sir/Madam)
This letter is in accordance with the request of our customer to be provided with the payment for the current project to reach the requirements needed for the successful completion of the project.
The payment would be credited to the account of the applicant with _________________ (name of the bank/ financial institution), and the transaction would be a monthly basis.
Below are the terms and conditions regarding the credit facility:
- Revolving credit line of maximum $50,000 will be given.
- Interest rate of 5.5% per annum loan amount must be payable by the first of every month of the credit period.
- The credit is repayable on demand and can be availed up to __________________.(Mention the time period)
- For security reasons we require a guarantor from ______________(name of the bank)
- The borrower must not execute any other credit facility with another financial agency.
The credit facility will expire on ___________. (mention the date). If you agree to the above terms & conditions call us at_________ (mention the contact number) and enjoy the offered credit facility. If you have any query regarding the same feel free to contact us.
Eagerly waiting for your positive response.
Thanking you.
Warm regards,
_____________ (Name and signature of the sender )
_____________. (Name of the organization)