Revolving Debt Accounts

Revolver accounts have ceilings—the outstanding balance in a given period may be below or equal to that ceiling. In Funding Options, you can designate revolver accounts as cash deficit and/or cash surplus accounts. You can repay each account up to the balance, or use it to fund a deficit up to its ceiling.

  • If you do not apply a cash surplus to a revolver account and do not to use the account to fund deficits, the balance in each period equals the lesser of the prior period's balance or the specified ceiling.

  • If you repay a revolver account early, Funding Options first makes payments required under scheduled revolver ceiling reductions. After meeting the ceiling reduction for all accounts, Funding Options uses surplus cash to reduce the balance of those revolver accounts in Apply Cash Surplus to....

  • If you use a revolver account to fund cash deficits, Funding Options draws cash from this account as a source of funds. The amount of funding available is a function of the prior balance for that account and the ceiling specified for that revolver account.

  • If you apply a cash surplus to a revolving account and use that account to fund cash deficits, Funding Options may lower the balance of the account in one period because of excess funds. In the next period you can borrow that money to fund shortfalls, depending on the cash requirements.

See Modeling Revolver Accounts.