A Revolving Credit Finance Facility (RCF) is a flexible funding solution that provides businesses with a pre-approved line of credit through a finance provider such as ELS. RCFs are a far more adaptable option than traditional business loans and offer a range of benefits to help businesses manage their cash flow.
What is a Revolving Credit Finance Facility (RCF)?
An RCF is a flexible source of funding that allows businesses to withdraw money, repay it, and then withdraw again as needed, up to the pre-approved limit. It works similar to a credit card, providing businesses with the ability to manage their cash flow more effectively. This type of finance is designed for medium to large companies who require a flexible funding solution.
What are the Advantages of RCFs?
The main advantage of RCFs is their flexibility and unlike traditional business loans, an RCF does not require businesses to apply for funding each time they need it. Instead, companies have a pre-approved line of credit that they can draw on as needed. This flexibility makes RCFs one of the most cost-effective funding solutions available, allowing businesses to quickly access capital without the need for long-term commitments.
What is the difference between a Term Loan and a Revolving Credit finance facility?
A term loan, or standard business loan, is an approved amount of money that is repaid on an agreed schedule. An RCF is an approved maximum borrowing amount that allows businesses to borrow, repay, and then borrow again as often as they like up to the maximum limit.
Do you Pay Interest on Revolving Credit Finance Facilities?
Yes, when funds are withdrawn from an RCF, the agreed interest rate of the facility will be payable. The terms of the RCF can vary and our team at ELS will guide you through the available options to ensure you find the right financing solution for your business.
Key Features of Revolving Credit Finance Facility
• No requirement for Director’s Personal Guarantees
To qualify for an RCF, your business must meet the following criteria:
• Have a turnover of at least £1M in the last 12 months
• Be a UK Ltd or PLC
• Have been trading for a minimum of 3 years
Other Finance Options
If your business does not qualify for an Revolving Credit Finance Facility, our team at ELS will help you explore other finance options that may suit your needs. We offer a range of bespoke finance products to help businesses grow and succeed. Contact us today to discuss your options take a look at our alternative finance options.
RCF Expiration
Maintain a good credit record and keep within your facility terms and you can operate the revolving credit finance facility for as long as you need it.
Applying for a Revolving Credit Finance Facility
To apply for an RCF, you will typically need the following information:
• Latest financial accounts
• 6 months of business bank statements
• Aged debtor and creditor report
• Up-to-date management information
Get in Touch
Find out more about how an RCF can help your business, give us a call on 0116 389 3839, Email: [email protected] or complete our contact form HERE.
It's a flexible form of funding that gives you access to a pre-approved line of credit, which you are able to use and repay on a recurring basis. Revolving credit facilities are similar to business credit cards, except that you don't use a card and instead the money is extended to you.
Revolving Credit Facility or RCF – A revolving credit facility is a type of credit that does not have a fixed number of payments, in contrast to fixed term loans. An example of this for members of the public is the credit card.
Firstly, it allows the borrower the ability to draw down funds, repay, and then withdraw again, hence the term 'revolving'. Secondly, the facility can be accessed at relatively short notice, of usually two to three days.
With revolving credit, you only pay interest for the money you use. You'll only be charged for the days you withdraw funding rather than for the total amount of credit, such as you'd find with term loans.
A revolving credit facility is a line of credit that is arranged between a bank and a business. It comes with an established maximum amount, and the business can access the funds at any time when needed.
Whatever you refer to it as, an RCF is essentially a direct line of credit that gives a borrower complete flexibility to draw upon capital, repay it back, and then draw down again continuously until the end of the agreed term and maximum credit limit.
Total debt for Rashtriya Chemicals and Fertilizers FY 2015-2020. In the financial year 2020, Rashtriya Chemicals and Fertilizers Limited (RCF) had a total debt of around 48.3 billion Indian rupees. The outstanding value comprised of the principal amount and the interest that was accrued over the specified time.
Term loans provide a one-time lump sum loan with a fixed repayment schedule. In contrast, revolving credit offers continuous access to funds up to an agreed limit, with flexibility in borrowing, repaying and re-borrowing.
The RCF is used to support a business's short term cash fluctuations such as seasonality of operating working capital (OWC). A revolving credit facility is also known as a revolver.
Unlike an overdraft, a revolving credit facility isn't linked to your bank account and resembles a new credit agreement. You'll agree to a set term, such as three years. Once the time is up, you might be able to extend it or take out a new one with the same lender.
Higher interest rates: Revolving credit accounts typically come with higher interest rates than loans. Interest can become very problematic if you don't pay your account in full every month. Fees: Some revolving credit accounts require you to pay annual fees, origination fees, or other fees.
Revolving credit or revolving accounts function by giving you the choice to withdraw funds multiple times until you reach a set limit (or your credit limit). You decide how much money you borrow and how much your repayments will be, beyond the minimum payment requirements.
Further funds can be drawn down at any time with interest periods running in parallel. As with term loans, the borrower must give the lender a drawdown notice and the borrower must specify its chosen interest period. Interest periods are usually 3 or 6 months long.
With a revolving line of credit, you have an available credit limit. This lets you borrow what you need, when you need it, and pay interest only on the amount you borrow, not the total credit limit amount.
Revolving accounts are continuous, meaning they'll appear on your credit reports as long as the account remains open. Your payment history can also affect your credit scores. However, there's another important factor to consider when it comes to revolving credit: your credit utilization ratio.
The security required depends on the lender. Some RCFs can be secured against the debtor book. Some simply require a personal guarantee with no charge over the business.
A term loan involves borrowing a fixed amount of money, repaying this sum with interest over a specified term. Conversely, a revolving credit facility operates similarly to a credit card. This affords businesses a credit limit that they can borrow against, repay and borrow again.
Relative centrifugal field (RCF) describes and compares the strength of the fields generated by different size rotors and different operating speeds. Just as length is measured in units of inches or millimeters, time in units of hours or minutes, the relative centrifugal field is measured in units also.
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