Revolving credit facilities

Keep your company growing
with flexible funding

A revolving credit facility enables you to draw down working capital, repay it and withdraw it again, when you like. You can use it to support growth strategies and acquisitions or to strengthen working capital.

Our revolving credit facility is a form of alternative business finance. It offers flexible funding to businesses that need ongoing funds without going through the traditional loan application process.

Benefits of a revolving credit facility

  • Flexible drawdowns: fill your cash flow gap while waiting to receive funds by drawing capital when you like
  • Higher advance rate: leverage up to 115% of accounts receivables
  • Large amounts: borrow up to £20m in multiple currencies across multiple jurisdictions, in a single facility
  • Simple fee structures: pay 8% to 12% a year in interest, on drawn funds only, subject to a minimum utilisation
  • Freedom: you decide how much you borrow and when to pay it back
  • Simple management: our borrowing-base concept means you do not need to verify invoices with customers

Access up to 150% more funding than with invoice finance

The table below shows the difference between a revolving credit facility and invoice financing. By leveraging your entire balance sheet, rather than just your accounts receivables, you can use a revolving credit facility to access much higher amounts.

Business assets Asset value RCF advance % RCF advance value* IF advance % IF advance value*
Receivables £500,000 115% £575,000 85% £425,000
Stock £800,000 30% £150,000 0%
P&M £500,000 70% £350,000 0%
Total approved £1,075,000 £425,000
*Values are the maximum possible for each asset category

“Growth Lending has been fantastic to work with. After we grew 300% in 2020, our facility provided working capital to enable continued growth”

James Digva, co-founder and managing director, Sauce Shop

Frequently asked questions

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1. What is a revolving credit facility?

A revolving credit facility is a line of credit that is agreed between a business and a lender and is characterised by its flexibility. The business is able to access any amount of cash, up to an agreed credit limit, on a continually revolving basis, which means the company can draw down cash, repay and withdraw again, as needed.

This is especially beneficial for businesses that have funds tied up in assets, invoices or their balance sheets, because a revolving credit facility frees up working capital on a flexible, rolling basis, enabling business owners to concentrate on growth.

2. What is different about Growth Lending’s revolving credit facility?

Our revolving credit facility unlocks funds tied up in your balance sheet. We can leverage the full strength of a company’s accounts receivables, stock, and plant and machinery to boost its working capital position.

We have a greater credit appetite than many banks and can often provide funding where traditional lenders cannot. We pride ourselves on simple facility management, transparent pricing, no restrictions around concentration and higher quantums than other lenders. We assess every application individually and each facility can be tailored to suit a company’s needs.

3. How does a revolving credit facility work?

A revolving credit facility works much like an agreed overdraft on a personal bank account. When the facility size has been agreed by the lender, the borrower is able to withdraw and repay funds from the facility (up to the agreed credit limit) as often as they wish, with charges based on the amount of funds used.

Some companies may use a revolving credit facility regularly, whereas others may use it only a handful of times during the agreed term: the frequency depends on each firm’s business model and its cash flow needs.

4. What can a revolving credit facility be used for?

A revolving credit facility is a flexible line of credit that can be used to support a firm’s needs, from covering a large, one-off payment to supporting regular cash flow.

Some businesses might use a revolving credit facility to bridge a gap while cash is tied up in a balance sheet, while seasonal companies may need extra cash to invest in stock or additional employees.

Growth Lending is able to provide this type of funding to multi-jurisdiction B2B businesses and supports the use of a revolving credit facility to fund expansion, acquisitions, MBOs and refinancing existing debt, as well as implementing new projects and growth strategies. Our flexible lending model means that each facility is designed to fit a firm’s specific needs.

5. What is the difference between a revolving credit facility and invoice finance?

The advance rate of a revolving credit facility is often much higher than what would be available from a traditional invoice finance facility, which is capped at 90% of accounts receivables. Interest is charged against the outstanding balance (facility funds in use), as opposed to paying a fixed monthly fee. There is no need to contact your customers to verify invoices, and you can draw down capital from the credit line whenever it suits you.

6. What is the difference between a revolving credit facility and a term loan?

A term loan is borrowed and repaid according to a set schedule over the agreed term of the loan (usually two to five years), whereas a revolving credit facility can be used to draw down, repay and withdraw capital on a more flexible basis.

Term loans usually encompass larger facility sizes than revolving credit, but we are able to provide revolving credit facilities of up to £20m.

7. Does Growth Lending need to validate invoices and receive payments from debtors when I use a revolving credit facility?

We do not require verification of invoices as standard (unlike when a borrower uses invoice finance). However, we may require verification in exceptional circumstances, to ensure that we secure ourselves appropriately.

8. How does the gross-up feature work with a revolving credit facility?

The advance rate for a revolving credit facility is often much higher than what would be available from a traditional invoice finance facility, which is capped at 90% of aged receivables. We can lend up to £20m by leveraging the entire balance sheet, with up to 115% of aged debtors, 70% plant and machinery and 30% stock.

9. What are the eligibility criteria for a revolving credit facility?

Your company must be a B2B firm, with a proven business model and a minimum turnover of £500,000. We fund multi-jurisdiction and multi-currency businesses, and your firm may be loss-making, if profitability is forecast against reasonable growth assumptions.

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Growth Lending funds companies with more than three months’ turnover.
If that’s you, let’s check if you’re eligible

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