Revolving credit facility

Revolving Credit Facility

Like an overdraft, a Revolving Credit Facility is a reusable loan fund, agreed for a term which can be drawn, repaid and drawn again as often as required during the agreed term.

A more flexible form of finance – Revolving Credit Facility

Since the banking crisis in 2008 liquidity requirements have seen high street banks reduce overdraft availability to UK businesses by a huge margin. Businesses have been pushed to repay their facilities, transfer them to term loans or to re-bank their businesses completely.

What is a revolving credit facility?

A revolving credit facility is a loan facility like an overdraft which allows you to withdraw funds for your business, repay the funds when cash comes into the business and then redraw funds again as they are required. Out of the many, flexible products your advisor can arrange this is possibly one of the most flexible.

Is a revolving credit facility better than a normal term loan?

A revolving credit facility is more flexible than a term loan as rather than paying a fixed repayment amount each month to reduce the balance, you can draw the amount you need, repay that and do it again and again. Repaying funds, to reduce the amount of interest due, then redrawing funds as required by your business.