Revolving Credit Facilities
How does a Revolving Credit Facility work?
Revolving Credit are flexible loan facilities, allowing businesses to have more control over loan repayments and the ability to reduce their interest cost.
Revolving Credit can come in many forms:
Credit Limits
Some lenders offer flexible credit limits to clients as an overdraft alternative. This is an allowance which can be drawn down and repaid like an overdraft, but the capital is provided by a 3rd party, not your bank directly.
Credit Cards
A physical payment card which is used to provide short term credit to delay the payment of goods or services.
Buy Now Pay Later
A flexible facility allowing businesses to repay the cost of bills over equal monthly instalments.
How much can I borrow?
What are the typical repayment terms?
What security do I need to provide?
Most Revolving Credit Facilities are unsecured but require a Personal Guarantee from a director or shareholder of the business.
For higher credit limits, security, in the form of a charge over personal or company assets (typically property) may be required.
What can I use the loan for?
- Working Capital
- Stock Purchase
- Payroll
- Marketing
- Weekly Bills
- Contract Fulfilment