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Definition
An evergreen loan is a facility with no fixed final repayment date that renews automatically each period unless either party ends it. It provides ongoing working-capital funding without the need to renegotiate a new loan each time, though it is periodically reviewed.
In plain terms
Rather than repaying and re-borrowing, an evergreen arrangement rolls forward, giving continuity of funding. It suits a persistent working-capital need, subject to the lender's ongoing satisfaction at each review.
Why it matters
Evergreen structures give stable ongoing funding. See revolving credit facility and cleardown.
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