Reviewed by Jack Shrimpton, Senior Finance Content and Production Manager at xUnlocked · Last updated July 2026 An evergreen loan is a loan or credit facility that remains available on an ongoing basis, rather than being repaid and closed on a fixed maturity date. In practice, it is often structured as a revolving facility, meaning the borrower can draw funds, repay them, and draw again, subject to the agreed borrowing limit and facility terms. The “evergreen” label refers to the renewal mechanism. Instead of ending automatically at a set date, the facility continues or renews periodically unless the lender or borrower takes action to cancel it, or unless certain conditions are not met. Evergreen loans are typically used for ongoing funding needs rather than one-off borrowing. For example, a company may use an evergreen facility to manage working capital, smooth seasonal cash flow, or provide a liquidity backstop. The borrower does not necessarily need to draw the full amount. In many cases, the value lies in having committed funding available when needed. Although evergreen loans can feel open-ended, they are not risk-free or unconditional. Lenders usually retain the right to review the facility periodically, often annually. They may reassess the borrower’s financial position, covenant compliance, collateral, repayment behaviour and wider credit risk. If the borrower’s position has weakened, the lender may reduce the limit, change the terms, decline renewal or cancel the facility in line with the agreement.