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Glossary

Non-revolving credit line

Category — Loans
Non-revolving credit line is a credit line with a disbursement limit, which provides for the provision of funds in installments within a certain term and credit limit.

A non-revolving credit line acts as one of the forms of providing financial resources in the credit market along with revolving loans and term loans.

Within the framework of a non-revolving line of credit, the borrower uses the funds within the terms that are acceptable to them, which are prescribed in the loan agreement. If the borrower repays part of the non-revolving loan, this does not increase the disbursement limit. Unlike revolving and term loans, a non-revolving credit line assumes that the borrower can borrow a part of the funds that does not exceed the limit, and after its repayment, the credit line must be closed.

A revolving loan, in turn, assumes that during the agreed period, the borrower has the right to receive funds, repay part of the debt, and receive borrowed funds again within a certain limit and period. At the same time, term loans provide for a one-time provision of credit resources.

A non-revolving credit line is one of the most common forms of raising funds from the commercial loan market, which is provided to entities and municipalities of the Russian Federation in the framework of public procurement under the Federal Law No. 44-FZ dated 5/4/2013 "On Contract System for State and Municipal Procurement of Goods, Works, and Services."

So, to date, most of these loans (more than 60%) are provided to borrowers in the form of a credit line with an issuance limit, for example, Kirov, Irkutsk, Togliatti, as well as the Republic of Mordovia, Tyumen region, Pskov region, and the Udmurt Republic.

Non-revolving lines of credit are also found in the Russian and CIS syndicated loan market. Examples of such loans include syndicated loans to Kazanorgsintez, Norilsk Nickel, Chelyabinsk Pipe-Rolling Plant, and Ilim Group. However, in the syndicated loan market, the most common are term and revolving loans.
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