Evergreen funding refers to a financing arrangement — typically a revolving credit facility, line of credit, or investment structure — that has no fixed maturity date and renews automatically or can be continuously drawn down and repaid without a defined termination date. The 'evergreen' characteristic means the facility remains perpetually available as long as the borrower meets the lender's ongoing conditions. In banking, evergreen loans are those that are repeatedly rolled over or renewed at maturity without significant principal repayment, which can mask the borrower's inability to repay the original principal and lead to disguised non-performing assets. RBI guidelines specifically flag evergreen lending practices as a risk to bank asset quality. In venture capital and private equity, evergreen funds are investment structures without a fixed fund life that reinvest returns rather than distributing them. For analysts and investors on Ventura Securities evaluating bank asset quality, identifying evergreen lending in stressed portfolios is critical for assessing the true level of NPAs and the integrity of reported credit metrics.
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