REVOLVING CREDIT FACILITY (RCF)

A revolving credit facility, or RCF, is a flexible funding option available to limited companies that provides a pre-agreed credit limit which can be drawn down, repaid, and used again. It operates in a similar way to an overdraft, offering businesses the ability to manage cash flow on their own terms.

For limited companies, one of the main advantages of an RCF is that interest is only paid on the amount actually used, rather than the full credit limit. This makes it particularly useful for businesses that face seasonal fluctuations or unpredictable cash flow. While the flexibility is attractive, costs can vary depending on usage, and companies should ensure that the facility aligns with their financial planning.