From €1000 to €25m, depending on agreed credit limit and whether you offer any security
From 1 months to 20 years
Monthly interest (more than a fixed loan) plus possible set-up fee. These will vary according to lender, your business profile and whether you offer any security
Automatic (set up in hours, draw down immediately)
To finance capital expansion or as a safeguard in the event of cash flow problems
All businesses (except startups) – lenders may require a minimum turnover and trading history, and may value your assets if the facility is secured
A revolving credit line (facility) is a rolling agreement between you (the business) and a lender – in contrast to a fixed business loan. You can use it on an as-needed basis and pay it off when it’s convenient. You have a credit limit, in the same way you do with a business credit card or bank overdraft.
Revolving credit is a type of working capital finance that enables you to borrow funds from a lender at some point in the future, up to a limit.
It’s rather like a flexible, open-ended loan. You pay monthly interest only on the amount you’ve used (drawn down) – you don’t pay anything until you actually start tapping into the line. Your payments might be irregular, because (unlike a loan) you are not being lent a lump sum of money and charged interest right away.
Once you’ve repaid an amount of money, you can withdraw more – hence the term ‘revolving’. You can also think of revolving credit it as a type of loan that can be automatically renewed.
If you make regular, consistent payments on your revolving credit account, your lender might agree to increase your maximum credit limit – again, like a credit card or overdraft. In this sense it’s a dynamic product, compared to a non-revolving line of credit.
You would expect to pay higher fees than fixed term business loans – you’re paying for the convenience and flexibility.
Like loans, both revolving and non-revolving credit lines come in secured and unsecured versions. You can use revolving credit lines in combination with other types of finance, for example trade finance or supplier finance to help you manage supply chain funding.
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