These are municipal or state pool of funds that capitalize a loan fund. These are managed by the municipal or state government. Loan Repayments recapitalize the funds, which allow for additional lending to continue.

There are several entities that can provide revolving funds, such as third party lenders. Government sponsored RLF (Revolving Loan Funds) often offer low interest rates and/or flexible terms and focus on financing the cost of energy upgrades.

Interest rates for RLFs are either set by using the programs funds to bring down the interest rate to more attractive levels or by pegging the rate to their particular borrowing rate. Most loan terms are under 10 years.

Advantages Disadvantages
Simple to setup when compared to other options available
Governments often act as an administrator. Requires expertise and set up time if there is no existing RLF.
In-house expertise may exist since there are already many cities and states that have RLFs
Amount of funds are limited, especially in the near-term, since there is no leverging of private capital
Funds are revolved indefinitely, which allows to create a source of funds that can be made available in the long-term
Detailed credit-analysis on the borrower must be done
Eligibility requirements can be shaped to fit market goals
Security or collateral may be required