Compare Revolving Credit Facilities To Help Your Business Grow Purchase Stock Employ Staff Expand Pay Suppliers
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from 7%
Interest rates per annum
£100,000 +
Annual turnover
Have access to
A pre agreed credit limit
£15k - £2m
Funding requirement
Our lending partners
About Revolving Credit Facility
A revolving credit facility will allow your UK business to access an agreed limit of funds whenever necessary. At Aurora Capital, we can pair your business with a trusted provider of revolving credit so that you can benefit from accelerated business growth.
What is a revolving credit facility?
A revolving credit facility is a line of credit that allows a UK business to access and repay funds as and when needed. It works in a similar way to an overdraft or credit card.
It’s a short-term alternative funding option that remains accessible once you’ve repaid what you’ve borrowed, so you don’t need to reapply for new credit if you need it.
This facility can act as a financial safety net because it remains available whenever your business needs funds. There is no need to wait for several days or weeks, as you would with other types of business loans, so in the event of an emergency, you can access the funds you need immediately.
Revolving facility credit can help if your business has minor cash flow issues. It allows you to continue operating without disrupting your day-to-day operations.
Key features
- Suitability: Any business looking for flexible funding that they can draw down multiple times a year.
- Purpose: Revolving credit is unrestricted and can be used for any business expense.
- Amount: Loans range from £10k to £2m. The exact amount you can borrow will vary based on your affordability and the lender.
- Term: Up to 2 years. This will depend on the length of time the business has been trading and its creditworthiness.
- Cost: Lenders charge a daily or monthly interest rate on the money you use. Alternatively, some charge a single fixed fee per drawdown.
- Security: Personal guarantees may be required, but this will depend on the business’s creditworthiness.
- Speed: Applications can be processed within 24 hours of receiving a full proposal, and we can pay out within 48 hours.
Here’s an overview of how getting a revolving line of credit for your business could work:
- You apply for a revolving credit facility and agree on a credit limit with the lender. This will be based on your needs, but the limit may be restricted depending on your creditworthiness.
- The lender will set a fixed interest rate that you’ll be charged on any amount you withdraw from the credit line. Interest rates typically start from 7%, but some lenders set a fixed fee per withdrawal instead of interest.
- Once agreed, you can request to withdraw from your credit facility within 48 hours.
- The repayment terms will vary depending on the lender. You may need to make repayments weekly or monthly, and some will allow you to pay off the interest only.
- Revolving credit facilities are available for up to two years, but you may be able to extend your agreement if necessary.
Since you only pay interest on what you borrow, your payments will probably be irregular, unlike when you borrow a lump sum of money and are charged interest immediately.
Most terms for revolving credit facilities last up to two years, and provided you have paid on time throughout, you’ll often be eligible for renewal.
Revolving credit facilities are similar to a business overdraft since you can access the revolving line of credit repeatedly as long as you continue to pay off your balance.
Unlike a traditional business loan or agreement, you can use revolving credit funds for any business expense.
Revolving credit is a useful option if your business’s cash flow is irregular or sporadic, as it can help you cover any gaps. Unlike a generic business loan, you’re only charged for what you use, which makes it a great backup option for unexpected expenses.
Revolving credit for business usually comes with interest costs; however, they tend to be lower than credit card or overdraft rates. The exact interest rates you are offered for your revolving facility credit will depend on the lender.
The specific lending criteria will vary from lender to lender. However, there are some standard eligibility requirements you will need to meet to qualify. Most lenders will check:
- Your business is registered and based in the UK
- Your cash flow
- Your business credit score
- Your trading history
Lenders will examine these factors to assess your risk to them. The main thing they will want to understand is how much cash is regularly flowing into your business bank account.
This means that if you’re after a small facility, a lender might look only at your bank account—an advantage if you’re a new company, but you’ll need to have been trading for more than three months.
Revolving credit facilities are generally short-term arrangements, so if you’ve struggled to find credit, you might have more success with this type of product.
Revolving credit facilities can be a useful funding option for your business, but it’s important to understand the pros and cons before you apply.
Pros of revolving credit
- Flexibility: You can use the facility when needed and don’t have fixed repayments like with a term business loan.
- Pay only for what you need: You only pay interest on the money you use, not the total amount of credit.
- Quick access: You can usually be accepted within 24 hours of applying, and funds can be in your account within 48 hours.
- No early repayment charges: You can repay what you’ve borrowed whenever you want, so there are no charges for clearing the balance early to reduce the interest you pay.
- No security required: You won’t need to secure the credit you borrow against any business assets as part of your application.
Cons of revolving credit
- Higher cost: Although they can be cheaper than credit cards, the interest rates on revolving credit facilities tend to be higher than most fixed-term business loans.
- Short-term: Revolving credit facilities aren’t suitable for long-term funding because they are only available for a short period and are designed to cover short-term shortfalls.
- Fees and penalties: You may need to pay additional fees to set up the facility, and there may be penalties for things like missing payments.
- Personal guarantee: The lender may ask for a personal guarantee when you apply, which means you will be liable for any debt if your business defaults on the credit.
- Credit score impact: Revolving credit loans can seriously impact your credit score if your repayments are not well managed.
Here’s an overview of how getting a revolving line of credit for your business could work:
- You apply for a revolving credit facility and agree on a credit limit with the lender. This will be based on your needs, but the limit may be restricted depending on your creditworthiness.
- The lender will set a fixed interest rate that you’ll be charged on any amount you withdraw from the credit line. Interest rates typically start from 7%, but some lenders set a fixed fee per withdrawal instead of interest.
- Once agreed, you can request to withdraw from your credit facility within 48 hours.
- The repayment terms will vary depending on the lender. You may need to make repayments weekly or monthly, and some will allow you to pay off the interest only.
- Revolving credit facilities are available for up to two years, but you may be able to extend your agreement if necessary.
Since you only pay interest on what you borrow, your payments will probably be irregular, unlike when you borrow a lump sum of money and are charged interest immediately.
Most terms for revolving credit facilities last up to two years, and provided you have paid on time throughout, you’ll often be eligible for renewal.
Revolving credit facilities are similar to a business overdraft since you can access the revolving line of credit repeatedly as long as you continue to pay off your balance.
Unlike a traditional business loan or agreement, you can use revolving credit funds for any business expense.
Revolving credit is a useful option if your business’s cash flow is irregular or sporadic, as it can help you cover any gaps. Unlike a generic business loan, you’re only charged for what you use, which makes it a great backup option for unexpected expenses.
Revolving credit for business usually comes with interest costs; however, they tend to be lower than credit card or overdraft rates. The exact interest rates you are offered for your revolving facility credit will depend on the lender.
The specific lending criteria will vary from lender to lender. However, there are some standard eligibility requirements you will need to meet to qualify. Most lenders will check:
- Your business is registered and based in the UK
- Your cash flow
- Your business credit score
- Your trading history
Lenders will examine these factors to assess your risk to them. The main thing they will want to understand is how much cash is regularly flowing into your business bank account.
This means that if you’re after a small facility, a lender might look only at your bank account—an advantage if you’re a new company, but you’ll need to have been trading for more than three months.
Revolving credit facilities are generally short-term arrangements, so if you’ve struggled to find credit, you might have more success with this type of product.
Revolving credit facilities can be a useful funding option for your business, but it’s important to understand the pros and cons before you apply.
Pros of revolving credit
- Flexibility: You can use the facility when needed and don’t have fixed repayments like with a term business loan.
- Pay only for what you need: You only pay interest on the money you use, not the total amount of credit.
- Quick access: You can usually be accepted within 24 hours of applying, and funds can be in your account within 48 hours.
- No early repayment charges: You can repay what you’ve borrowed whenever you want, so there are no charges for clearing the balance early to reduce the interest you pay.
- No security required: You won’t need to secure the credit you borrow against any business assets as part of your application.
Cons of revolving credit
- Higher cost: Although they can be cheaper than credit cards, the interest rates on revolving credit facilities tend to be higher than most fixed-term business loans.
- Short-term: Revolving credit facilities aren’t suitable for long-term funding because they are only available for a short period and are designed to cover short-term shortfalls.
- Fees and penalties: You may need to pay additional fees to set up the facility, and there may be penalties for things like missing payments.
- Personal guarantee: The lender may ask for a personal guarantee when you apply, which means you will be liable for any debt if your business defaults on the credit.
- Credit score impact: Revolving credit loans can seriously impact your credit score if your repayments are not well managed.
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Securing business funding:
How it works
We understand that timing is key when you’re looking to find funding options for your business,so our process is as quick and as streamlined as possible.
1
Apply Online in minutes
We cater to any sized business, so to apply for business funding, we only need you to share basic information about your company. Your application will take a few minutes, and our experts are always happy to assist with any questions you have about specific loan types or alternative finance options.
2
Get Matched in hours
Our LendTech technology will compare our trusted panel of lenders and match you with your most suitable finance option. Each business funding option is different, and we’ll help to make sure you’re fully clued up on the terms and conditions as well as indicative repayment details.
3
Get Funded in days
One of our funding specialists will discuss the available options with you and guide you through the process from application to approval. Once approved, the funds can be deposited in a matter of hours.
Prefer to talk? Call us on 020 3355 7462
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We understand that timing is key when you’re looking to find funding options for your business, so our process is as quick and as streamlined as possible.
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Revolving Credit Facility: FAQs
You can borrow up to £2 million with a revolving credit facility and use these funds at any time. The size of your credit limit will be calculated following your initial application.
You can borrow for a maximum of 2 years. The length of time will depend on your time trading and your credit information, which will be assessed following your application.
If you have managed the facility well, you may be able to extend your agreement at the end of the term, but this will be at the lender’s discretion.
Yes, you can repay at any time without paying a penalty. The lender will outline Your repayment terms when your application is approved.
Repayment terms can vary from lender to lender. Some only require you to pay the interest for the duration of the contract, whereas others require the interest and capital to be repaid from the drawn funds.
You will usually need to make repayments every month, but this may differ depending on the term length of your facility.
The cost of your revolving credit will depend on the interest rate charged, the fees payable, and how much you borrow from the facility. Interest rates can start from 7%, but the lender will decide your rate based on factors like your creditworthiness, the credit limit you want, and the term of the facility.
Some providers take a single fixed fee from the drawdown amount without ongoing interest. Others charge ongoing interest on the used funds on either a daily or weekly basis.
A revolving credit facility is completely unrestricted and can be used for any business expense. Whether you need to buy stock, hire more staff, or pay bills, a revolving credit business loan could be the perfect choice for your business.
The main difference between revolving credit and a term business loan is that you can withdraw the funds as and when you need them and, therefore, only pay interest on what you need.
You also don’t have a fixed repayment schedule and can repay what you’ve borrowed at any time. For these reasons, revolving credit facilities are a more flexible funding solution than a fixed-term loan.
A business loan is usually a better option for long-term borrowing, as the interest rate is usually lower. You can potentially borrow larger amounts and spread the cost over many years.
You do not need to secure revolving credit against any business assets. This means you won’t risk losing an asset if you cannot keep up with your repayments.
However, some lenders may request a personal guarantee when applying for revolving credit. This means you would be personally liable for any debts if your business cannot repay the facility’s outstanding balance.
