A revolving credit facility is a loan facility that enables you to withdraw money, use it, repay it, and then withdraw more money. As the name suggests, it is a ‘revolving’ loan that allows for flexible use and repayment. In a sense, you borrow from a pre-agreed pot, which ensures that you can borrow whenever you need it with very little hassle.
When an account holder is granted a revolving credit agreement, he or she is granted the ability to borrow money up to a predetermined dollar limit while making regular payments on the current balance. The amount available to the account holder is replenished with each payment, less the interest and fees charged. Borrowers who qualify for revolving credit have a predetermined credit limit that can be used in whole or in part over an extended period of time. One’s credit limit is the amount of money that can be loaned by a financial institution to an individual.
The approval of revolving credit usually has no expiration date. This arrangement can be extended as long as the account is in good standing. Customers who have proven themselves to be reliable may see their credit limit increase over time. Short-term and smaller loans are the primary focus of revolving credit as a result of this. As with smaller loans, larger loans require more structure, such as pre-determined installment payments. A revolving credit facility has flexible repayment terms, and the lender gives you the freedom to decide how much you want to borrow each month and when you want to pay it back.
A range of lenders offer this type of facility, and today, Funding Bay has selected our top 3 lenders who can get you a revolving credit facility:
iwoca
iwoca offers a ‘flexi-loan’ which is their take on a revolving credit facility. They typically offer the equivalent of a month’s revenue between £1,000 and £200,000 over terms of up to 12 months. They don’t charge early repayment fees and will only charge interest rates for the days that you have the money. If you need more money, the top-up is very straightforward and won’t take long.
Just Cashflow
Just Cashflow offers a revolving credit facility as an alternative to an overdraft solution. They allow you to borrow up to £1 m with no monthly capital repayment. It is designed to support your cash flow, and they offer flexible solutions of up to £85,000 unsecured, and £1,000,000 secured. There are no fixed monthly repayments, nor management or early repayment fees.
FIBR
FIBR offers a Line of Credit which is their revolving credit facility. There is a 12-month term length and the facility size ranges from £10,000- £250,000 with 12 monthly lines of credit between £10-£250k in facility size. They have a 4-17.5% drawdown fee. With the line of credit, you will only pay for the funds that you use. The withdrawal process is very simple with no paperwork and entirely digital process.
Get in touch with the experts at Funding Bay to learn more about revolving credit and which lenders are best for your company.
