Revolving Credit Facilities Scotland

Flexible Business Funding

Introduction

Need flexible access to working capital without the commitment of a traditional loan? A revolving credit facility gives your business a pre-approved credit line you can draw from, repay, and draw again – as many times as you need throughout the agreement term.

At Capital 8 Finance, we help businesses across Scotland and the UK secure revolving credit facilities that provide on-demand funding for cash flow gaps, seasonal peaks, unexpected opportunities, or operational expenses – without reapplying each time you need capital.

From £10,000 to £500,000+, we’ll find you the most cost-effective revolving credit solution from our whole-of-market lender panel.

What Is a Revolving Credit Facility?

A revolving credit facility (also called a revolving credit line or RCF) is a flexible funding arrangement that allows you to borrow, repay, and borrow again up to a pre-approved limit throughout the agreement term.

How it works:

Approved limit– You’re approved for a maximum credit limit (e.g., £100,000)
Draw funds as needed– You withdraw funds whenever you need them (£10k, £50k, the full £100k, etc.)
Pay interest only on what you use– You only pay interest on the amount you’ve drawn, not the full limit
Repay at your pace– Make repayments when cash flow allows (subject to minimum payments)
Borrow again– Once you repay, that credit becomes available again without reapplying

Example:

Your business is approved for a £100,000 revolving credit facility. In January, you draw £40,000 to purchase inventory. You pay interest only on £40,000. In March, you repay £20,000, bringing your balance to £20,000. You now have £80,000 available credit. In May, you draw another £30,000 for a marketing campaign. Your balance is now £50,000, and you have £50,000 available credit remaining.

This cycle continues throughout the agreement term (typically 6-24 months), giving you flexible access to working capital whenever you need it.

Revolving Credit Facility vs. Other Funding Options

Revolving Credit Facility vs. Business Loan

Feature	Revolving Credit Facility	Traditional Business Loan
How you access funds	Draw and repay multiple times	Lump sum upfront
Interest charged on	Only what you draw	Full loan amount
Repayment flexibility	Flexible (minimum payments required)	Fixed monthly repayments
Reusing funds	Yes, repay and draw again	No, must reapply for new loan
Best for	Ongoing, fluctuating needs	One-time, specific purpose

When to choose revolving credit: Seasonal businesses, unpredictable cash flow, ongoing working capital needs

When to choose a business loan: Specific purchase (equipment, property), predictable repayment capacity

Revolving Credit Facility vs. Overdraft

Feature	Revolving Credit Facility	Bank Overdraft
Credit limit	£10k-£500k+	Typically £5k-£50k
Interest rates	Fixed daily rate (disclosed upfront)	Variable, often 10-20% APR
Approval process	1-2 weeks	Instant (if pre-approved) or weeks
Repayment terms	Structured minimum payments	Repayable on demand
Facility security	Fixed term (6-24 months)	Can be withdrawn anytime by bank

When to choose revolving credit: Larger amounts, predictable rates, secure facility term

When to choose overdraft: Very short-term needs, small amounts, existing banking relationship

When Do Businesses Use Revolving Credit Facilities?

Managing Seasonal Cash Flow

Many businesses experience seasonal revenue fluctuations – high sales in summer or Christmas, slower periods in January or autumn. A revolving credit facility bridges these gaps:

Retailers:Stock up for Christmas, Black Friday, or summer sales
Construction companies:Cover costs during winter slowdowns
Tourism businesses:Fund operations during off-season
Accountancy firms:Manage cash flow between tax seasons

You draw funds during slow months and repay when revenue picks up, without the burden of fixed loan repayments year-round.

Covering Payment Delays

If your customers pay on 30-90 day terms but your suppliers require payment upfront, revolving credit fills the gap:

Pay suppliers immediately (securing discounts or priority service)
Cover payroll and operational costs while waiting for customer payments
Avoid late payment penalties or damaged supplier relationships

Once customers pay, you repay the facility and the credit becomes available again for the next cycle.

Seizing Growth Opportunities

Unexpected opportunities often require quick access to capital:

Bulk purchase discounts from suppliers (buy now, save 20%)
New contract wins requiring upfront investment
Competitor going out of business (acquire their customer base or assets)
Property lease opportunity (secure premises before competitors)

Revolving credit gives you immediate access to funds without waiting weeks for loan approval.

Smoothing Uneven Cash Flow

Some businesses have unpredictable revenue patterns:

Project-based businesses (consultancies, agencies, contractors)
Businesses with large, irregular invoices
Startups in growth phase with inconsistent revenue

Revolving credit provides a financial cushion, allowing you to cover expenses during lean periods and repay when revenue arrives.

Benefits of Revolving Credit Facilities

Flexibility – Draw funds only when you need them, repay when cash flow allows (subject to minimums), and draw again without reapplying.

Pay for what you use – Unlike a traditional loan (where you pay interest on the full amount from day one), you only pay interest on the funds you’ve actually drawn.

Fast access to capital – Once approved, funds are typically available within 24-48 hours of each drawdown request.

Predictable costs – Fixed daily interest rates mean you know exactly what you’re paying. No hidden fees or variable rates that change unexpectedly.

No reapplication required – Once approved, you can draw, repay, and draw again throughout the term without reapplying or providing updated financials each time.

Preserve cash reserves – Keep your cash in the business for emergencies or opportunities, using the facility only when needed.

Build credit history – Responsible use of a revolving credit facility (drawing and repaying on time) can improve your business credit profile.

Scalable – As your business grows, you can often increase your credit limit without starting from scratch.

How Much Does a Revolving Credit Facility Cost?

Revolving credit facility costs depend on the amount borrowed, your business’s financial strength, trading history, and risk profile.

Typical costs:

Interest rates:

Established businesses (2+ years, strong financials):5-1.5% per month (6-18% APR)
Newer businesses or adverse credit:5-3% per month (18-36% APR)

Fees:

Arrangement fee:1-3% of credit limit (e.g., £1,000-£3,000 on £100k facility)
Drawdown fees:£0-£100 per withdrawal (varies by lender)
Monthly management fee:£0-£50 (some lenders)

How interest is calculated:

Interest is charged daily on the outstanding balance. This means:

If you draw £50,000 for 30 days, you pay interest on £50,000 for 30 days
If you repay £20,000 after 15 days, you pay interest on £50,000 for 15 days, then £30,000 for the remaining 15 days

Example cost calculation:

Facility limit:£100,000
Amount drawn:£50,000
Interest rate:1% per month (0.033% per day)
Days funds are drawn:60 days
Interest cost:£50,000 x 0.033% x 60 days = £990
Arrangement fee (2%):£2,000 (one-time, paid at setup)
Total cost for this drawdown:£990 interest + £0 ongoing fees = £990

Compare this to:

Business loan:You’d pay interest on the full £100,000 even if you only needed £50,000
Overdraft:Variable rates (often 15-20% APR) with potential for sudden withdrawal
Credit cards:15-30% APR with lower limits and less flexibility

Our promise: We compare revolving credit providers across the UK market to find you the most competitive rates and terms for your business.

Am I Eligible for a Revolving Credit Facility?

Most UK businesses can qualify for a revolving credit facility if they meet basic criteria.

Minimum requirements:

Trading history:Typically 6-12 months (some lenders accept startups with strong projections)
UK-registered business:Limited company, sole trader, or partnership
Minimum turnover:£50,000-£100,000 annually (varies by lender and facility size)
Ability to service debt:Sufficient cash flow to make minimum monthly payments

Typical facility sizes:

Minimum:£10,000
Maximum:£500,000+ (for established businesses with strong financials)
Most common:£25,000-£150,000

Credit limit calculation:

Most lenders base your credit limit on:

Monthly turnover:Typically 1-2 months of average monthly revenue
Financial strength:Profitability, cash reserves, existing debt levels
Trading history:Longer track record = higher limits

Example: A business with £600,000 annual turnover (£50,000/month) might qualify for a £50,000-£100,000 revolving credit facility.

You may still qualify even if:

You’re a relatively new business (under 2 years) with strong revenue growth
You have some adverse credit (CCJs, defaults) if trading is strong
You’ve been declined by your bank for an overdraft or loan
You have seasonal or fluctuating revenue

Not sure if you qualify? Contact us for a free assessment. We’ll review your financials and match you with suitable lenders from our panel.

Why Choose Capital 8 Finance?

I Understand Cash Flow Challenges

Having run my own business for over 10 years in the hospitality industry, I understand the frustration of having to manage cash flow to ensure a business continues to function. Revolving credit facilities provide the flexibility businesses need without the burden of fixed loan repayments.

Whole-of-Market Access

We’re not tied to any single lender as we have access to:

High street banks (NatWest/RBS, Lloyds Bank, Barclays, HSBC) – for established businesses with strong credit
Challenger banks (Aldermore, Shawbrook, Metro Bank, Allica Bank) – more flexible criteria
Alternative finance providers (iwoca, Funding Circle, Capitalise, Kriya)
Specialist revolving credit lenders (Fleximize, Nucleus Commercial Finance)

This means we can compare rates, terms, and eligibility across the entire UK market to find you the best solution.

Scotland-Based, UK-Wide Service

Based in Dundee, I serve business owners across Scotland and throughout the UK. I understand the unique challenges of Scottish businesses and have secured revolving credit facilities for clients across all regions.

Fast, Personal Service

As a solo operator, you deal directly with me throughout the entire process. I’ll respond to your enquiry within 24 hours, provide you with options within 48 hours of receiving your information, and keep you updated at every stage.

Get Your Free Revolving Credit Facility Quote

Ready to secure flexible funding for your business?

Here’s what happens next:

Initial consultation– We’ll discuss your funding needs, cash flow patterns, and business financials
Lender matching– I’ll identify suitable revolving credit providers from our panel
Quote provided– Within 48 hours, I’ll provide you with facility options, rates, and terms
Application submitted– Once you choose a lender, I’ll handle the entire application process
Facility approved– Most revolving credit facilities are approved within 1-2 weeks
Funds available– Once approved, you can start drawing funds within 24-48 hours

Contact Capital 8 Finance today for your free revolving credit facility assessment.

Frequently Asked Questions

How is a revolving credit facility different from a business loan?

A business loan provides a lump sum upfront with fixed monthly repayments. A revolving credit facility gives you a credit limit you can draw from, repay, and draw again multiple times throughout the term. You only pay interest on what you use, and you have repayment flexibility.

How quickly can I access funds once approved?

Once your facility is approved and set up (typically 1-2 weeks), subsequent drawdowns are processed within 24-48 hours. Some lenders offer same-day transfers for urgent needs.

What’s the difference between a revolving credit facility and an overdraft?

Revolving credit facilities typically offer larger limits (£10k-£500k+), fixed interest rates, and secure terms (6-24 months). Overdrafts are smaller (£5k-£50k), have variable rates, and can be withdrawn by the bank at any time. Revolving credit is more suitable for planned, ongoing funding needs.

Do I pay interest on the full credit limit?

No, you only pay interest on the amount you’ve actually drawn. If you have a £100,000 facility but only draw £30,000, you pay interest on £30,000.

Can I repay early without penalties?

Most revolving credit facilities allow early repayment without penalties, though some lenders charge early settlement fees if you close the facility before the term ends. We’ll clarify terms before you commit.

What can I use a revolving credit facility for?

Any legitimate business purpose: working capital, inventory purchases, payroll, marketing, equipment, covering payment delays, seasonal cash flow gaps, or growth opportunities. Lenders typically don’t restrict usage as long as it’s business-related.

How long does the facility last?

Typical terms are 6-24 months. At the end of the term, you can often renew the facility (subject to review) or repay the outstanding balance and close it.

What happens if I don’t use the facility?

You typically don’t pay interest if you don’t draw funds, though some lenders charge a small monthly management fee (£0-£50) to keep the facility active. We’ll clarify fee structures before you commit.

Can I increase my credit limit later?

Yes, many lenders allow credit limit increases during the term if your business has grown and financials have improved. This usually requires a review but is simpler than applying for a new facility.

Revolving Credit Facilities.