Business Revolving
Credit Facility
Flexible access to ongoing business funding
Flexible business funding that gives your company access to capital when needed while only paying interest on the funds you use. A revolving credit facility helps businesses manage cashflow, working capital, and short-term funding needs.
- Access a pre-approved business credit limit when needed
- Only pay interest on funds used, not the full facility
- Cover short-term cashflow gaps like supplier payments or payroll
- Maintain ongoing access to working capital without reapplying for funding
Reusable
Credit facility
Interest on Use
Pricing model
Draw & Repay
Flexible access
Independent
Funder comparison
Business Revolving Credit Facility Calculator
Estimate the interest cost and repayment amount on a revolving credit facility based on how much capital your business draws. Adjust the rate, repayment term and frequency to understand how different funding scenarios affect total repayment.
Your Details
Interest is only charged on the amount drawn
Facility Summary
This estimate is illustrative only. Actual interest rates, fees and terms are determined by funders after a full assessment of your business. Rates shown are annual and calculated on a simple interest basis.
What is a Revolving Credit Facility for Business?
A revolving credit facility for business is a flexible funding solution that provides access to a pre-approved credit limit. Businesses can draw funds when needed, repay them, and draw again without reapplying.
Unlike a traditional business loan that provides a fixed lump sum, a revolving credit facility remains available on an ongoing basis, making it useful for managing working capital and cashflow needs.
- Access a pre-approved business credit limit when needed
- Only pay interest on the amount drawn, not the full facility
- Funds become available again as repayments are made
- Helps businesses manage working capital and cashflow fluctuations
- Often used alongside other funding solutions
Not sure if a revolving credit facility is right for your business?
Speak to a specialist who can assess your funding structure and guide you to the most appropriate option.
Revolving Credit Facility vs Other Business Funding Options
Businesses can access funding in several ways. The table below compares a revolving credit facility with other common business funding options to help illustrate how they differ in structure, flexibility, and typical use.
| Product | Access to Funds | Interest Charged On | Repayment Structure | Typical Use | Flexibility |
|---|---|---|---|---|---|
| Revolving Credit Facility | Draw when required | Amount drawn only | Flexible draw and repay | Working capital management | High |
| Business Term Loan | Lump sum upfront | Full loan amount | Fixed monthly instalments | Capital investment | Lower |
| Merchant Cash Advance | Lump sum upfront | Factor rate on advance | Percentage of daily revenue | Short-term capital gaps | Moderate |
| Invoice Finance | Against unpaid invoices | Invoice value | Repaid when customer pays | Bridging debtor gaps | Moderate |
| Asset Finance | Against asset purchase | Full finance amount | Fixed instalments | Equipment and vehicles | Lower |
How a Business Revolving Credit Facility Works
Understanding the draw-down and repayment cycle helps businesses assess whether a revolving credit facility fits their working capital needs.
Is a Revolving Credit Facility Right for Your Business?
A revolving credit facility can be a useful working capital tool for some businesses, but it is not suitable for every situation. Whether it fits depends on your cashflow cycle, existing funding and how the facility will be used.
When It May Be Suitable
Contextual fitManaging seasonal cashflow gaps
Businesses with seasonal revenue cycles can draw from the facility during slower periods and repay when turnover increases.
Purchasing inventory ahead of demand
Retailers and wholesalers can use a revolving facility to fund stock purchases without committing to fixed loan terms.
Bridging debtor payment cycles
Businesses that invoice on 30 to 60 day terms can use a facility to manage the gap between billing and receipt.
Managing short-term operational expenses
Where unexpected costs arise or payment timing misaligns, a revolving facility provides a structured buffer.
Risks and Considerations
Understand before committingInterest rates may be higher than term loans
The flexibility of a revolving facility is often priced at a higher rate than a standard business term loan of equivalent size.
Requires financial discipline
Ongoing access to capital can encourage over-utilisation. Without a clear repayment plan, outstanding balances can persist.
Overuse can increase long-term cost
Consistently drawing close to the credit limit means ongoing interest cost that, over time, can exceed the cost of a structured loan.
Terms vary significantly between funders
Credit limits, interest rates, draw-down processes and fees differ considerably. Comparing options before committing is important.
Revolving Credit Facility Rates in South Africa
Interest rates on revolving credit facilities in South Africa vary significantly between funders. Understanding how these facilities are priced helps businesses compare funding options and evaluate the true cost of accessing working capital.
How pricing works
Most revolving credit facilities in South Africa are priced using an interest rate applied to the outstanding balance. Because interest is only charged on the amount drawn, the total cost depends on how much of the facility is used and for how long.
Funder pricing is typically based on factors such as your risk profile, trading history and cashflow consistency. Businesses with stable and predictable revenue generally qualify for more competitive terms.
If your need is a once-off capital investment, a term loan may offer a lower cost of capital. If your revenue is variable and you need a repayment structure that flexes with your income, a merchant cash advance may be worth considering instead.
What affects pricing?
- Risk profile and trading history
- Revenue consistency and cashflow stability
- Existing funding obligations and utilisation
- Industry sector and customer concentration
- Funder assessment criteria and appetite
Our Approach to Revolving Credit Facility Funding
We start with a structured review rather than a product recommendation. Our role is to help you understand whether a revolving credit facility is the right funding structure for your business before approaching lenders.
Business Funding Review
Every engagement begins with a Business Funding Review. This helps us understand your current funding position, cashflow cycle and whether a revolving credit line aligns with your working capital requirements.
Independent Assessment
We assess relevant funding options across multiple funders where appropriate. Sometimes the outcome of a review is that no change is recommended. That is a valid and valuable outcome.
Long Term Funding Structure
A revolving credit facility can be a useful working capital tool but may not be the most efficient structure for every business. We assess both the short-term fit and the longer-term cost implications before making any recommendation.
Frequently Asked Questions
Common questions about revolving credit facility funding for South African businesses.
A revolving credit facility is a flexible funding arrangement where a business is approved for a credit limit and can draw funds as needed, repay them, and draw again. Unlike a term loan where you receive a lump sum and repay it over a fixed period, a revolving facility remains available to the business on an ongoing basis within the approved limit.
Interest is charged only on the amount you have drawn, not on the full credit limit. If your facility is R500,000 and you have only used R150,000, you pay interest on R150,000. As you repay the drawn balance, the interest cost reduces accordingly. This structure makes it more cost-effective for businesses that do not need to use the full facility at all times.
Both allow you to draw and repay as needed, but they differ in structure and purpose. An overdraft is typically linked to a business bank account and is used to manage day-to-day cashflow shortfalls. A revolving credit facility is usually a standalone funding product with a defined credit limit, formal draw-down process and structured repayment terms. Facilities are often offered by specialist funders in addition to traditional banks.
Funders typically assess your business revenue, trading history, existing funding obligations, industry, and cashflow consistency. Businesses with stable, predictable turnover and a clear working capital cycle are generally viewed more favourably. The assessed credit limit will reflect the funder's view of your repayment capacity and risk profile.
It can. Funders reviewing your business for future financing will consider existing facilities and utilisation levels. A revolving credit facility that is consistently fully utilised may signal cashflow dependency, which some funders view as a risk factor. Understanding how your current funding structure appears to lenders is one of the reasons a Business Funding Review is a useful starting point before applying.
Not Sure if a Revolving Credit Facility is the Right Option?
A short strategic funding conversation can help determine whether your current funding structure supports your business goals, and whether a revolving credit line belongs in that structure.
No pressure. No obligation. Just clarity.
Good funding decisions compound over time. Poor ones do too. Structure matters.