A flexible overdraft
Lenders will give you a facility when you require it, with interest paid on what you borrow. It’s a great way of staying in control of your business finances.
Revolving Credit Facilities
This is one type of finance that is commonly referred to as a flexible overdraft. The lender will provide the business with available funds or a line of credit, that can be drawn down as required. The company doesn't have to draw down all the funds straight away, giving them the control and flexibility of how much they would like to borrow. It provides the ultimate flexibility in terms of business finance.
Some lenders will look to give you a facility that you can use when required, with interest paid on the funds borrowed. The number of available funds to you can be less than other forms of finance but is a great way to only pay for the funds you need. This is why it is called a revolving facility as funds can be drawn and repaid throughout the term.
Commercial Loan Brokers UK
A flexible overdraft
It's a cost-efficient way of having business finance when you need it, and you don't incur charges when it isn't used. The facility is often chargeable at a day rate meaning its transparent and easy to work out. The day rate is based on the number of funds in use, so it can be costly if you use constantly use the facility. That is why it addresses short term cashflow issues with this type of business finance not designed for long term issues.
The revolving facility is unsecured meaning it is often linked with only an unsecured personal guarantee to yourself. If anything happens to the business, you will find yourself liable for the remaining amount.
Most funders will look at three months of bank statements and full financial accounts to determine the amount available to the business. Most facilities are set up in 2-4 days once the information is reviewed.
Many businesses like the non-committal approach; however, the rate can work out very expensive if used for a substantial length of time. Considering what the business finance is for and how it will be used is vital. We will always endeavor to understand the requirement for funding and whether a revolving facility is one of them.
It's a great way of having that flexible overdraft
when you need it, and not incur charges when you don't.
The finance is often chargeable at a day rate meaning its
transparent and easy to work out.
Commercial Loan Brokers
The finance is unsecured meaning it is often linked with a personal guarantee to yourself. If anything happens to the business, you may find yourself liable for the remaining amount.
Many businesses like the non-committal approach; however, the rate can work out very expensive if used all the time. Considering what the business finance is for and how it will be used is critical, as a flexible overdraft may not be worth it to you.