Business financing simplified

Revolving Credit Facility

Business financing simplified

Revolving Credit Facility
in a nutshell

Revolving credit facilities (RCFs) is a flexible funding solution that works like a business overdraft. Your business will be set up with a pre-agreed funding limit with a lender over a set duration. During this time, you can draw down the funds you need within this limit. As you pay back what you have borrowed, this allows you to draw the funds again. This process can be repeated throughout the agreed loan duration.

The clue to what an RCF does is in the name – it is a credit facility that allows you to borrow money – and revolving means that you can draw and repay flexibly, unlike a loan.

For example, Company A is set up with a Revolving Credit Facility over 24 months with a limit of £100,000. The business draws down £50,000 for working capital. After they pay back the £50,000 + interest, they can then access £100,000 again. Note that even though they had a limit of £100,000, they will only pay interest on the amount they chose to drawdown; £50,000, which is how it is different from more typical business loan products.

The security required depends on the lender. Some RCFs can be secured against the debtor book. Some simply require a personal guarantee with no charge over the business.

Some of our lenders

Quick

RCFs can be set up very quickly in comparison to other facilities and funds are usually available to draw the day the facility is set up.

BENEFITS

Cost effective

Borrowers only pay for the amount they use. If they draw down half of their available funds, they will only pay interest on that amount.

BENEFITS

Flexible

The ability to draw down, repay, and re-draw funds makes an RCF a flexible borrowing option.

BENEFITS

Who is Eligible?

  • Established businesses (been trading for over 2 years).
  • Some assets in the business (including accounts receivable).
  • Profitable or loss-making businesses.
  • Can sit alongside other loans.

How does it work?

1. Assessment: Assessing the business needs and business setup alongside lender criteria.

2. Application: Making applications to lenders and ensuring the lenders get a good understanding of the business. The application process may involve face-to-face time with the lender on-site or virtually.

3. Funding: After the offer is made and the legal documents signed, the lender will make the funds available and you can then opt to draw down the amount required.

How Much Does It Cost?

FAQ's

RCFs work well alongside other facilities such as unsecured loans and secured loans.

Full filed accounts, latest management accounts, 12 months bank statements. In some cases aged debtors and aged payables.

This varies from lender-to-lender. For some, if all the correct information and documents are supplied, 1-5 days. Others can take 1-2 weeks if the lender asks lots of questions.

Most lenders are flexible and allow you to repay what you have borrowed and in most cases there are no exit fees.

Qualifing questions

Can I Borrow?

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Get Invoice Finance

Please pop your details in the form below and we’ll get back to you within 24 hours.

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