Revolving Credit Facility

Last updated: 29/05/2025

What is a revolving credit facility?

A revolving credit facility provides businesses with a line of credit and allows them to withdraw an amount to be repaid over a period of time. After the funds have been settled, the business can then repeat the process and withdraw more funds.

With a revolving credit facility, the interest rate is fixed, determined by the lender, and the interest paid is typically only for the amount borrowed, not the credit limit set.

This method of finance is typically shorter-term, with the agreement usually spanning up to 12 months, with the funds used for business cash flow, unexpected or emergency expenses, or general business activity. An extension of the credit facility may be available depending on the lender and subject to credit.

As there isn’t a payment schedule put in place, a revolving credit facility can be considered a flexible solution for businesses wanting finance quickly that can be repaid within a short space of time.

How does a revolving credit facility work?

When you contact us, we will request some information from you. Depending on your business and the intended use of the credit line. This may include recent financial statements, as well as bank statements and other supporting information.

Once the information has been checked over, our panel of lenders will be reviewed, and a lender will be selected based on your circumstances. Further checks will be carried out, including identity verification, as part of our Know Your Customer (KYC) requirements.

Following the approval, a credit limit is set by the lender, as well as the duration of the revolving credit facility. After you sign the agreement and final checks have been completed, you will have access to the credit facility.

Benefits of a revolving credit facility

• Flexible borrowing
• Access to funds on demand
• Interest is only paid on amount borrowed
• Easy access to funds
• Help manage cash flow
• Suitable for short-term finance
• Helps to build a positive credit record
• Can be unsecured subject to terms

What can I use a revolving credit facility for?

A revolving credit facility is a short-term financial option used to provides businesses with access to credit.

Other uses include:

• Cash flow or working capital
• One off purchases
• Purchasing assets
• Unexpected or emergency payments
• Tax bills
• Short-term working capital
• Funding new marketing campaigns or promotions
• Staffing costs

Is a revolving credit facility suitable for your business?

A revolving credit facility is ideal for businesses requiring a short-term financial solution for uses such as managing cash flow, paying for unexpected or emergency costs, or for purchasing new assets, stock or inventory.

With fixed interest rates only being paid on the credit borrowed, not on the maximum amount, as well as the quick turnaround to secure the facility, this method of finance is ideal for businesses wanting access to flexible short-term finance.

Things to consider with a revolving credit facility

What to consider when applying for revolving credit facility:

Length: Short-term finance, usually lasting up-to 12 months

Interest rate: Interest rate is fixed, and is only paid on amount borrowed, not the maximum credit

Purpose: Typically used for cash flow and unexpected costs

Extensions: Depending on the lender, you may be able to extend the agreement.

Speed: Revolving credit facilities usually have a quick turnaround to granting the funds

Eligibility: Businesses must have at least 6 months trading history to be able to apply for a revolving credit facility

Alternative solutions to a revolving credit facility

Working capital loan: A working capital loan is ideal for businesses looking to secure a short-term financing solution to help manage daily operations and provide sufficient cash flow for the business.

Unsecured business loan: This loan is based upon the borrower’s creditworthiness, with no need for collateral. If you are an asset-light business, or prefer not to use your assets as security, an unsecured loan can be an ideal option.

Invoice financing: Invoice financing provides early access to your customer invoices that are owed to your business, with invoice factoring and invoice discounting being the two main methods of invoice finance.

How to apply for a revolving credit facility

MAF Finance Group works with a host of lenders and financial institutions to provide competitive financial solutions for you.

If you would like to learn more about our financial solutions or to get a quote, simply fill in the form and we will get back to you. If you would like to speak to us directly, you can call us on 0115 958 6872 and a member of our team will be happy to speak to you. Alternatively, you can email us at [email protected].