A revolving credit facility gives UK businesses a pre-agreed line of credit they can draw down, repay and re-draw as often as needed within the agreed limit. Interest is charged only on the amount actually used, making it one of the most flexible forms of working capital finance available to established companies.
At Bolton Business Finance we arrange revolving credit facilities from £30,000 to £5 million with terms typically between 3 and 24 months. As independent commercial finance brokers based in Bolton, we compare options across high-street banks, challenger banks and specialist lenders so you secure the facility that genuinely fits your cash-flow cycle — not the one that suits a single lender’s panel.
Apply now for a Revolving Credit Facility
What is a Revolving Credit Facility?
A revolving credit facility (often called an RCF or revolving line of credit) is a flexible credit arrangement between a lender and a UK business. Once the facility is agreed, your company can borrow funds up to a pre-set limit, repay them, and then borrow again — repeatedly — throughout the term of the agreement.
Unlike a traditional term loan, you are not committed to taking a fixed lump sum and making fixed monthly repayments on the full amount. You only pay interest on the money you have drawn. As soon as you repay part or all of the balance, that portion of the facility becomes available again.
This structure is particularly useful for businesses with fluctuating working capital needs — for example manufacturers, wholesalers, distributors, contractors and seasonal traders.
How a Revolving Credit Facility Works
Most revolving credit facilities arranged for UK SMEs follow a straightforward process:
- Facility limit agreed – Based on your turnover, trading history, credit profile and purpose of funds, a maximum credit limit is set (commonly between £30,000 and £5 million).
- Drawdown – You request funds as and when required. Many facilities allow same-day or next-day drawdown once the facility is live.
- Interest charged only on drawn amounts – You pay interest solely on the outstanding balance, not on the full facility limit.
- Repayment and replenishment – When you repay funds, the available credit limit is restored, ready for the next drawdown.
- Review and renewal – Facilities are usually reviewed at the end of the agreed term (often 12 or 24 months) and can be renewed or increased if performance is satisfactory.
Some facilities also carry a small non-utilisation fee on the undrawn portion. This is normal in the market and is factored into the overall cost comparison we provide.
Typical Terms Available in the UK Market
Current market terms we regularly arrange include:
- Facility sizes: £30,000 to £5,000,000
- Terms: 3 to 24 months (rolling or fixed period)
- Interest: Charged monthly on the drawn balance only
- Security: Options range from unsecured (with personal guarantees) through to asset-backed or invoice-backed structures
- Speed: Once approved, many facilities allow drawdowns within 24 hours
- Purpose: Working capital, stock, supplier payments, tax liabilities, seasonal cash-flow support and opportunistic purchases
Exact pricing and structure depend on the strength of the business, the sector and the security available. As independent brokers we obtain multiple offers so you can compare total cost, flexibility and speed side by side.
What Can You Use a Revolving Credit Facility For?
UK businesses typically use revolving credit facilities for:
- Purchasing stock and inventory ahead of peak seasons
- Bridging gaps between raising invoices and receiving payment
- Paying suppliers early to secure discounts
- Covering VAT, Corporation Tax or PAYE liabilities
- Managing seasonal cash-flow fluctuations
- Funding unexpected operational costs or opportunities
- Supporting growth without locking into a long-term fixed loan
Because the facility revolves, it is often more efficient than repeatedly applying for short-term loans.
Key Benefits of a Revolving Credit Facility
- Flexibility – Draw and repay as your cash-flow requires
- Cost efficiency – Interest only on funds actually used
- Reusable capital – The limit replenishes on repayment
- Speed of access – Once set up, funds are usually available quickly
- Cash-flow control – Helps smooth peaks and troughs without constant re-applications
- Supports growth – Allows you to take on larger orders or stock levels with confidence
For many established UK companies with turnover between £250,000 and £10 million, a well-structured revolving credit facility becomes a core part of their working capital toolkit.
Apply now for a Revolving Credit Facility
Revolving Credit Facility vs Other Business Finance Options
| Feature | Revolving Credit Facility | Term Loan | Bank Overdraft | Invoice Finance | Merchant Cash Advance |
|---|---|---|---|---|---|
| Flexibility | High – draw & repay repeatedly | Low – fixed amount & schedule | Medium | High – linked to invoices | Medium – linked to card sales |
| Interest charged on | Drawn amount only | Full loan amount | Drawn amount | Funds advanced | Factor rate on full advance |
| Best suited for | Ongoing working capital | Specific one-off purchases | Short-term cash gaps | B2B businesses with debtors | Card-taking businesses |
| Reusable | Yes | No | Yes | Yes | No |
| Typical speed once live | Same / next day | Funds on completion | Immediate | Fast | Fast |
A revolving credit facility sits between a traditional loan and an overdraft. It usually offers larger limits and more structured terms than a standard bank overdraft, while remaining far more flexible than a fixed-term loan.
Who is Eligible for a Revolving Credit Facility?
Most lenders prefer:
- Limited companies, LLPs or established sole traders
- UK-based businesses with a UK bank account
- Minimum trading history of 6–12 months (longer preferred for larger facilities)
- Clear purpose for the funds
- Ability to service the interest from trading cash flow
Facilities can still be arranged for businesses with imperfect credit histories, particularly where strong security or invoice book support is available. We assess each case individually and match it to the most suitable lenders in the market.
How Bolton Business Finance Arranges Your Revolving Credit Facility
We are independent commercial finance brokers. We do not lend money ourselves and we are not tied to any single lender. Our role is to:
- Understand your cash-flow cycle and exact requirements
- Present your case to a panel of specialist revolving credit lenders
- Compare terms, costs, security requirements and speed
- Guide you through the application and documentation process
- Support you until the facility is live and the first drawdown is made
There is no obligation and no broker fee charged to you for the initial comparison. We work solely in your interest.
Call us on 0161 546 9128 or complete the short enquiry form on this page to start the process.
Apply now for a Revolving Credit Facility
Examples of How UK Businesses Use Revolving Credit Facilities
Manufacturer in the North West
A engineering firm with seasonal order peaks uses a £450,000 revolving facility to fund raw material purchases ahead of large contracts. They draw funds as orders are confirmed and repay as customer payments arrive.
Wholesale distributor
A food and drink wholesaler maintains a £250,000 revolving line to take advantage of supplier discounts for early payment while waiting for their own customers to settle invoices.
Construction and fit-out contractor
A Bolton-based contractor uses a revolving facility to cover labour and materials between stage payments on commercial projects.
These are typical of the mid-market businesses we support across Greater Manchester and the wider UK.
Revolving Credit Facilities For Property Investors
There are also products available for property investors that wish to use equity in properties they already own. By utilising equity to set up a revolving credit facility, funds can then be drawn down quickly within 24 hours to make cash property purchases.
This type of facility can also be referred to as a hunting pot.
- 1st or 2nd Charge Security
- Use Equity up to 70% LTV
- Residential and Commercial Property
- Just pay interest on funds in use
- Drawn down and repay as needed
- Facilities available with no none utilisation fees
Frequently Asked Questions
What is the difference between a revolving credit facility and a business loan?
A business loan provides a fixed sum that is repaid over a set period. A revolving credit facility allows repeated drawdowns and repayments within an agreed limit, with interest charged only on the outstanding balance.
How quickly can I access funds once the facility is approved?
Many facilities allow drawdowns within 24 hours of the facility going live. Some specialist lenders can move even faster. Secured facilities can take a few weeks to set up, whereas unsecured can be within 48 hours.
Do I pay interest on the full facility limit?
No. Interest is charged only on the amount you have actually drawn and not yet repaid.
Can I get a revolving credit facility with less than perfect credit?
Yes, in many cases. Specialist lenders will still consider applications where the underlying business is sound or where security is available.
Is a revolving credit facility regulated by the FCA?
Most commercial revolving credit facilities arranged for limited companies fall outside FCA consumer credit regulation. We only arrange non-regulated business finance.
What security is usually required?
This varies. Options range from director personal guarantees through to charges over assets, invoices or stock. We will explain the security position clearly on every offer.
How does using a revolving credit facility affect my business credit score?
Responsible use and timely repayments can help demonstrate strong credit management. Missed payments or heavy utilisation will have the opposite effect.
Can the facility be increased later?
Many lenders will consider increases after a period of satisfactory performance, subject to updated financial information.
Ready to Explore a Revolving Credit Facility?
If your UK business needs flexible working capital that can be drawn and repaid as required, a revolving credit facility is often the cleanest solution.
Speak to an independent commercial finance broker who understands the mid-market and has access to the full range of specialist lenders.
Call 0161 546 9128 or complete the short form below for a no-obligation discussion.
We cover the whole of the UK from our base in Bolton and specialise in arranging practical, commercial finance solutions for established businesses.