A revolving credit facility and a business line of credit are two types of flexible business finance. Both are similar to a credit card, allowing you to dip into funds as needed and repay with interest charged only on the amount borrowed. However, there are a few key differences between the two which means each of them is suited to different needs. We’ll break these finance options down to help you understand which is best for your business.
Revolving credit facility
A revolving credit facility is a type of flexible business finance that will provide you with access to a pre-approved amount of money, which can be drawn upon as needed.
Here are the key features of a revolving credit facility:
Business line of credit
A business line of credit is similar to a revolving credit facility but works slightly differently:
Which is best for your business needs?
Whether a revolving credit facility or a business line of credit is best for your business will depend on your specific financial needs, cash flow projections and growth objectives. Here are some key factors to consider:
If you’re not sure which option is best for your business, speak to an expert who can help choose a suitable lender or funding product. When you search for funding with Capitalise, our dedicated team of funding specialists will work with you to understand your specific needs. With their expertise and our panel of 100+ business lenders, they can help you find the right option. They’ll also guide you through the process and package up your application to maximise your chances of approval.
It’s also important to bear in mind that you’ll likely need a good business credit score to get a line of credit or a revolving credit facility. You can check your business credit score before applying for funding when you sign up to Capitalise.