Revolving Credit Facility
What is a Revolving Credit Facility?
A Revolving Credit Facility works much like an overdraft and is a flexible funding option that enables businesses to withdraw credit when required to pay for business activities, and you will only pay for what you use.
Once it has been repaid according to the terms and conditions of the agreement with the lender, the finance can be used again when the business needs it.
A Revolving Credit Facility has a fixed interest rate, and repayments are usually required daily, weekly, or monthly.
It tends to be available for short periods of three months to two years, but you may have the option to extend the agreement if you make all your repayments on time and you continue to meet the lender’s eligibility criteria.
Why consider a Revolving Credit Facility?
A Revolving Credit Facility could be useful for various business reasons, for example, if you want to make a large one-off purchase, such as buying new equipment or vehicles, it could provide the funding you need, while many business owners apply for Revolving Credit so they have it to hand when they need it for day-to-day cashflow needs.
Businesses with short-term funding needs, such as unexpected bills, a cashflow gap, or a business growth opportunity, may benefit from accessing a Revolving Credit Facility.
Throughout the growth of a small or medium-sized enterprise, there may be times when a short-term need for funding arises. That is when a Revolving Credit Facility could help. This form of flexible finance offers businesses credit as and when needed.
How to choose the right Revolving Credit Facility
It’s always a good idea to compare fees, interest rates, and eligibility criteria, and ensure you understand when you are expected to repay.
If you decide that a Revolving Credit Facility is the right solution for your business, speak to our team here at Independent Business Finance. We work alongside an excellent panel of lenders and can negotiate the best rates available on today’s market.
For further information and to request indicative terms for a Revolving Credit Facility, contact our office: 01204 398816.
