A revolving credit agreement is similar to a fixed-term loan, as it is usually a promised facility that provides a maximum amount of capital over an agreed period. (A promised facility is a facility in which, after the conclusion of the facility agreement, the lender is required to send money when requested by the borrower, subject to the borrower`s compliance with certain pre-agreed terms.) There are a number of promised facilities that borrowers use to obtain loans, two of which are temporary loans and revolving credit facilities. Through a promised facility, the Bank undertakes to provide resources within a ceiling for a specified period and at an agreed interest rate. Although the conditions for using the funds are strict and specific, the borrowing companies benefit from a guaranteed source of financing during the term of the agreement. A revolving facility is usually a promised facility, but its advantage from the borrower`s point of view is maximum flexibility; it can obtain as much or as little as it needs at any time and, if cash flows are sufficient, it can repay overdue tranches that are no longer needed, thereby reducing its borrowing costs. Unlike a promised facility, an unincurred facility is a credit facility in which the lender is not required to lend funds upon request by the borrower. An unrelated facility is usually used for temporary purposes to finance the short-term needs of a borrowing business. Unrelated types of facilities include overdrafts, futures market and bank guarantees. Unins promised facilities are generally less costly than promised facilities, as the lender is not required to extend the loan; when financing is made available, it is short-term and the credit risk is relatively low. The revolving element of the loan facility is reflected in the fact that the borrower can take a tranche for an interest period and decide, at the end of that interest rate period, to repay that tranche or “roll” it over in the next interest rate period, unless a default event has occurred and continues. . . .