What is a Flexible Line of Credit?
A flexible line of credit allows you to access money – up to £100,000 - as and when you need it. So, it’s great for businesses that need money quickly, to re-stock or expand into new premises for example. Essentially, it’s a flexible loan, meaning that you can re-pay and re-draw money like a traditional bank overdraft (although there’s no bank account required).
Amount
£1,000 - £100,000
Credit line that can be made available to use as and when it’s needed.
Period
12 Months*
*Facilities are provided for up to 12 months, but can be renewed at the end of the period.
Cost
10% - 25% APR
Interest is typically charged daily on outstanding balances. Costs vary depending on your credit rating, volume of lending, and other factors; interest is paid on the amount of capital drawn
The information above shows the terms typically associated with a flexible term loan. Your terms will depend on your own situation
Flexible Lines of Credit at a Glance
Good credit history
A Flexible Line of Credit it best suited for businesses that can demonstrate a good credit history and strong financials; you pay interest on money drawn.
Time Trading and Revenue
To apply for a Flexible Credit Line you will typically need to have been trading for 12 months and your company turnover must be equal to or more than £40,000 per year.
Credit record
Some lenders require businesses / directors to demonstrate a good credit history and equity / net assets in the business. It’s less suitable for businesses with a limited track-record, that are loss-making or have recently restructured.
Personal Guarantees
A personal guarantee – an agreement that means a director takes on a certain level of personal responsibility for the debt through their own finances/assets - is typically required. Sometimes, invoices or property can be substituted in place of a personal guarantee.
Your Resources
SME Funding Guide - Understand your Options
Want to know more about the options available to you? Click here to see our SME Funding Guide, in association with our partners at KPMG Small Business Accounting. We've compiled all the information you need to research and choose the right funding for your business, including invoice finance.
Case Study – Ferment London Ltd
Funding Xchange helps businesses all over the UK, to access the finance they need on the best terms available. Click here to read how we helped a London brewery meet growing sales and launch a new product.
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