Standby credit facility
Revolving loan finance
Standby credit facilities are a variant on revolving loans.
A standby credit facility is a committed facility that is used together with another cheaper source of finance such as a commercial paper programme.
It is intended that the cheaper source of finance will be used in preference to the standby credit.
However, if at any time it becomes impracticable for the company to utilise the cheaper source of funds, then it may draw under the standby credit.
A 'swingline' facility is generally regarded as a standby credit facility that is available for same-day drawing with a short maturity, usually no more than seven or ten days.