Question

WALMART Revolving Line of Credit Determine for 2017 only the revolving line of credit for your corporation. Do you believe this amount is adequate for your corporation? Explain or demonstrate.

Answer 1

Revolving line of credit:

It means that banks or some merchants are offering some amount of credit for some amount of time to an individual or companies.

These debt is repaid periodically and once it repaid then again credit is allowed. If paid regularly/consistently the lender may increase the credit limit.

This looks like a credit card. The Lenders grants maximum credit limit for purchase of goods at any time. Whereas small business owners use it for capital expansion or to safeguard when there are cash flow problems.

Whereas individuals use this for overdraft payments or to cover expenses like renovations, etc.

The credit period generally allowed is 18 months to repay it.

Interest rates will be higher when compared with personal loans taken from the Lenders.

No for large companies it is not adequate, large number of transactions takes place as the interest rates are higher it is not adequate.

But where as for small companies it is adequate to take the line of credit.

Walmart raises revolving credit to fund Flipkart deals.

Walmart has Very large Banking lines and has tied up for commercial borrowings.