# Revolving credit facilities explained.

A revolving facility is a credit limit a company can draw on, repay, and draw on again — paying only for what is actually drawn. This guide explains how a facility such as Credicorp Flex works, how it differs from a fixed loan, and when the revolving shape is the right one.

## What a revolving facility is

A limit, not a lump sum. You take part of it when you need it, repay, and the headroom comes back.

A revolving credit facility gives a company an approved credit limit it can use as needed. You do not receive the whole amount up front. Instead you **draw** part of the limit when you have a use for it, **repay** what you have drawn, and as you repay, the headroom is restored so you can **redraw** later. The limit revolves — hence the name. Interest is charged only on the balance you have actually drawn, not on the full limit sitting unused.

This is a different shape of borrowing from a [business bridging loan](/guides/business-bridging-loans-explained/), which hands you one lump sum for one purpose over a fixed term. A facility is built for needs that come and go. Because the borrower is the company rather than the director, a facility of this kind is body-corporate credit and sits outside the FCA consumer-credit regime — see [lending and regulation](/lending-and-regulation/).

## Draw, repay, redraw

The cycle that defines a revolving facility, in three movements.
- **Open the facility.** A credit limit is set for the company. Opening the facility does not mean borrowing — nothing is owed until you draw.
- **Draw what you need.** Take part of the limit when a need arises. Interest starts on that drawn amount, and only that amount.
- **Repay, and the headroom returns.** As you repay the drawn balance, your available limit is restored. You can then draw again, without reapplying.

The practical effect is that you pay for use, not for access. A facility can sit at zero drawn for weeks, costing nothing in interest, and then carry a balance during a busy stretch. That is what makes it suited to uneven, recurring needs rather than a single visible gap.

## Credicorp Flex, in figures

The operator's published terms for its revolving facility. Confirm the live figures before you open one — see [credicorp.co.uk/business-credit-facility](https://credicorp.co.uk/business-credit-facility/).

| Term | Value |
| --- | --- |
| Credit limit | £50 – £500 |
| Interest | 0.25% per day on drawn balance only |
| Establishment fee | £5.00, on first drawdown |
| Cost cap | 100% per drawing |
| Term | Ongoing while in good standing |
| Cycle | 14 days |
| Minimum per cycle | 10% of drawn balance, or £20, whichever is greater |
| Personal guarantee | None |
| Borrower | The company |

Note that the £5 establishment fee falls on the first drawdown, not on opening the facility, and that interest accrues on the drawn balance alone. The minimum-per-cycle figure is the floor on each repayment, not a cap on it — repaying more reduces the drawn balance, and therefore the interest, faster.

## Revolving facility against a fixed loan

The two solve different problems. The table sets the shapes side by side; the test underneath is the quick way to choose.

|  | Revolving facility (Flex) | Fixed loan (Bridging Loan) |
| --- | --- | --- |
| Shape | A limit you draw on as needed | One lump sum, once |
| Best for | Uneven, recurring needs | A single, visible gap |
| Interest charged on | The drawn balance only | The outstanding principal |
| Reuse | Repay and redraw, no reapplication | Borrow again means a new application |
| Term | Ongoing while in good standing | 14 – 84 days, fixed |
| Cost when idle | None — nothing drawn, nothing charged | Interest runs for the whole term held |

A simple test: if you can name the amount and the date the gap closes, a fixed loan matches the need. If the need recurs and the amount varies, a revolving facility fits better. The operator sets the three products against each other at [credicorp.co.uk/compare](https://credicorp.co.uk/compare/), and our [working capital vs a term loan](/articles/working-capital-vs-term-loan) article goes deeper on matching the finance to the need.

## A worked example

A made-up example, not a real customer, to show how charging on the drawn balance plays out.

Suppose a company opens a Flex facility with a £500 limit. In week one it draws £200 to cover a supplier while a customer invoice is outstanding. At 0.25% per day, that £200 costs £0.50 a day in interest; held for 20 days, the interest is £10.00, plus the one-time £5 establishment fee on that first drawdown — £15.00 in total. When the customer pays, the company repays the £200, and the full £500 headroom is restored. A fortnight later it draws £150 against a different gap. The point is that the £300 of unused limit cost nothing while it sat there, and the second drawdown carries no new establishment fee.

To explore the cost of a single drawing over a given number of days, the daily-interest maths is the same as a bridge, so the [bridging loan cost calculator](/calculators/bridging-loan-cost/) gives a useful feel for it.

## When a facility fits — and when it does not

### Fits well
- Cashflow that rises and falls week to week, where the amount needed varies.
- A buffer you want available on tap without reapplying each time.
- Short, repeated gaps between paying out and getting paid.

### Fits poorly
- A one-off, known shortfall — a [fixed bridge](/guides/business-bridging-loans-explained/) is tidier.
- A single supplier invoice you want to spread — [Credicorp Slice](/guides/paying-suppliers-in-instalments/) is built for that.
- A long-lived asset purchase — match that to [asset finance](/guides/asset-finance-explained/) instead.

## Where to go next
- [Business bridging loans explained](/guides/business-bridging-loans-explained/) — the fixed-loan alternative
- [Paying suppliers in instalments](/guides/paying-suppliers-in-instalments/)
- [The three Credicorp products, side by side](/products/)
- [Compare Loan, Flex and Slice on the operator site](https://credicorp.co.uk/compare/)
- [What protections do and do not apply](/lending-and-regulation/)
- [Glossary of the terms used here](/glossary/)

[Open a Credicorp Flex facility at credicorp.co.uk →](https://credicorp.co.uk/business-credit-facility/)