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Revolving business credit is a flexible line of funding which is available to a company to dip in and out of as and when it is needed. With this type of lending, money can be accessed, used, paid back, and then withdrawn again when the need arises. This differs to a fixed form of credit such as a commercial loan whereby a set amount is lent to a company, paid back in instalments, and once repaid these funds are no longer accessible unless by way of a brand new loan agreement. While fixed credit agreements run for a set period of time, revolving credit facilities are more open-ended. Revolving credit can take a number of forms including bank overdrafts, credit cards, and invoice finance agreements and are perfectly suited to short-term funding needs. Revolving credit facilities are typically much more flexible than fixed agreements, with the facility often growing as the company grows. Some benefits of revolving business credit:
While revolving business credit can be ideal for those looking to ease cash flow worries and have immediate access to funds at any given time, for those who need a lump sum of money for one particular purchase such as a large piece of machinery or company vehicle, it is likely to be more cost-effective to source a form of finance specifically designed for longer term borrowing. Before taking out any form of third party funding for your limited company, you should make it a priority to speak to a commercial finance specialist. It is vital your immediate need for finance is carefully balanced with your company’s long-term objectives, and that any finance agreement you enter into now will be appropriate looking ahead into the future. At UKBF our commercial lending experts will not only provide guidance as to the most appropriate channel of funding based on your company’s needs, but will also scour the market to secure you this lending at the best rate possible. Contact our team today for industry-leading help and support.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
What can company finance be used for?
Business finance can be used for a multitude of purposes within a company, from boosting general cash flow to funding development projects and buying stock. Its flexibility and adaptability to an individual business’s needs make it ideal whatever stage of business you’re at.
Management buy-in financing options
If you’re considering being part of a management buy-in (MBI) or you’ve decided to sell your own business to an incoming management team, there are several ways in which the transaction can be financed.
Can I get business finance if my company is insolvent?
If your company is insolvent, it’s vital to stop trading straight away and obtain assistance from a licensed insolvency practitioner. The insolvency practitioner’s role at this point is to assess your company’s financial situation so that they can provide guidance on whether additional finance is appropriate.
Can’t pay company bridging loan – what are my options?
A bridging loan is a form of short-term finance that lasts for up to 12 months. It provides vital funding between transactions when a company purchases one property before the sale of another has been completed.