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Businesses Funding Revolving Credit Facility

finance options - revolving credit facility

A complete guide to revolving credit facilities

  • Apply up to 4 lenders in one application
  • Get finance options without affecting your credit score
  • Tailored support from a specialist
  • Receive funding in as little as 48 hours
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If you’re looking to speed up your cashflow with easily accessible cash, a revolving credit facility could be the right choice for you. 

Here’s everything you need to know about a revolving credit facility.

6 - 24 month repayment terms

Easily renew and draw down more funds

Use as much or as little as you need

No early repayment fees

What is a revolving credit facility? 

A revolving credit facility is a form of flexible working capital that gives you the ability to dip in and pay back your facility as and when your business needs that cash injection. Putting you in control of your finance.

It can give your business the same flexibility as a credit card, but at a lower cost. 
 
Whether your business needs to replenish new stock, or just needs a cashflow injection, a revolving credit facility can give you access to cash when you need it. 

Who is a revolving credit facility for?

A revolving credit facility can be used by most businesses, but can be an especially useful option for new  businesses or startups (with 3+months trading history) that can’t get a term loan. 
Businesses could use a revolving credit facility to: 

  • Make payroll in quiet seasons
  • Purchase more stock to fulfil larger orders
  • Create security by bridging any cashflow gaps
  • Take on new staff in a busy period 

See if you’re eligible with our business funding calculator 

What’s the difference between a revolving credit facility and a business loan?

A revolving credit facility involves a daily interest charge for any time the funds are being used. If a business is not using the funds, they won’t be charged.

Whereas a traditional business loan will require a business to repay the loan on a fixed payment schedule. The business will be given a lump sum agreed upon at the beginning of the loan term and payments will be a fixed amount made each month. 

Revolving credit facilities differ as they have no early repayment fees, can easily be renewed and are typically for shorter terms.

Business loans can have a much longer term length (2-5 years) will typically have cheaper interest rates and may have early repayment fees.

OTHER BUSINESS Finance options AVAILABLE

Invoice Finance

Asset Finance

Trade Finance

Merchant Cash Advance

Working Capital

How do I apply for a revolving credit facility?

1. Tell us about your business funding needs.

  • Let us know what your business does, what you want to use the cash for and how much you’re looking to borrow

  • Our specialists will help you understand how much you could borrow 

2. Find the facility that best suits your business

  • Find your funding match from our pool of lenders
  • A funding specialist will talk you through which lenders could provide a facility that suits you

3. Apply to up to 4 lenders with one application, to save you time and ensure your business doesn't have unnecessary credit checks

  • With your Capitalise for Business account, you can upload all your documents to one application.
  • A funding specialist will help put together the finishing touches, and send it to the selected lenders.

4. Get your facility set up in as little as 48 hours

  • Track responses from lenders on your Capitalise for Business Account.
  • With an approval, you could get a revolving credit facility in as little as 48 hours from release. 

5. Get dedicated support

  • A funding specialist will guide you through the process from start to finish
  • Feel confident you have the right choice with on hand support from an expert

Pro tip: you can also check your funding eligibility instantly with your Capitalise for Business account.

What do I need to apply for a revolving credit facility?

To apply for a revolving credit facility, lenders will need to see an indication of the businesses financial credibility. You should expect to provide: 

  1. 6 months business bank statements
  2. The latest set of annual filed accounts (if available)
  3. A business plan to show what you want to use the facility for

You will most likely need a good credit score to access the best rates,so it’s good practice to check your credit profile and improve your credit score if it is low.

How much can I borrow?

You could expect to borrow the equivalent amount to 1 month’s turnover. If you have already had a relationship with the lender and proven you can keep up with payments, you may be able to extend your credit limit when renewing your facility.

Ultimately, the amount will depend on a case by case basis. A strong business with a good credit score and profitable financial accounts will most likely be able to borrow more.

Ready to get started?  

Check if you're eligible for a revolving credit facility today.

revolving credit facility frequently asked questions

Yes, you could still get a revolving credit facility even if you have a poor business credit score. But the lender might require more security, such as a personal guarantee, and will likely charge higher interest rates. 
To make sure your business can access the best interest rates, check your business credit score.

A revolving facility is an ideal entry point to fix a poor business credit score.  Although you will pay a higher interest rate initially, you can build up your credit profile and then repay the facility and take out a product with a lower interest rate. 

Typically, lenders will offer a revolving credit facility for a term between 6 months, up to 2 years. Once the term length is up, you may be able to renew the loan if it has been a success for you and the lender.

With a revolving credit facility, you will pay a fixed daily interest rate for any days that you have withdrawn funds. Typical daily interest rates are between 0.05-0.1%

You won’t pay any interest on days you are not using the money. You may have to pay an arrangement fee to set up the facility, this will typically be around 2-4%.

Rates can vary, how much you pay can be affected by your business credit score, so with a good score you can expect to pay less.

Much like with an overdraft, you can choose to pay the facility back when you have funds available to do so.  Then that part of the facility will be available again to use as borrowing.  Ideally, you won’t use the revolving facility all the time, only for short periods of time when you have a cashflow gap.

Revolving credit facilities and business overdrafts are both similar types of business borrowing. Both will offer a set credit limit and charge interest only on days that the facility is used. The key difference is that a revolving credit facility can be cheaper than a business overdraft, and the facility is not tied to a business bank account. There are more alternative lenders that can offer a revolving credit facility, not just banks.