What is a 'Revolving Loan Facility'

A revolving loan facility is a financial institution that lets the borrower obtain a business or personal loan where the borrower has the flexibility to drawdown, repay and redraw loans advanced to it. This type of loan is considered a flexible financing tool due to its repayment and reborrowing flexibility. It is not considered a term loan because, during this allotted period of time, the facility allows the borrower to repay or take the loan out again.

It’s an unfortunate fact of life that, generally speaking, you have to pay for stuff you need. And paying for that stuff – stock, raw materials, equipment, space, people to work for you – is part of owning a small business. Of course, you need to be able to generate enough money to meet those expenses. And to ensure you are in a position to do so, you need to understand your working capital.

Working capital is a way of measuring the short-term financial health of a business. Defined as the difference between current assets and current liabilities, your working capital position tells you whether you have sufficient cash on hand to pay off your short-term financial obligations.

On Day Zero, Cape Town’s taps will be turned off and Mother City residents will begin queuing for their H20 at 200 collection sites across the city. It’s a nightmare scenario, something you see happening in a dystopic disaster movie set in the year 2148.

The truth is, businesses everywhere are engaged in a constant battle to keep their own Day Zero at bay. For when the taps run dry and liquidity dissolves, it truly does sound the death knoll for a business. No matter what your long-term prospects are, how innovative your product or service, or how revolutionary your business model, not having ready access to cash – not being able to open the tap when you need to – will see all your best-laid plans come to naught.

“Bizcash offer a fantastic service, it’s fast, convenient and far more advanced than any other finance facility I know of. They have helped our business enormously.”

Jonathan Erskine has been trading commodities for more than 25 years. In Hong Kong, China, and the UK, he has traded everything from clothing to computers, cellphones to scrap metal, grain to cement. Now back in his native Durban, Erskine has emerged over the past decade as one of South Africa’s leading coal traders.

Sometimes an unsual paradox arises in business. You may need to raise cash precisely because your business is productive.

For example, you’ve just delivered a major order of your product, when another big order comes in. You accept it, of course, but you require capital to fulfill the new order. The problem is, payment from your first client has to come through before you can do anything. You need the cash now. You’ve invoiced your client. But for the next 30, 60 or even 90 days, you’ll have nothing to show for it. What do you do?

One of the most startling recent developments in the world of international finance has been the rise of Alternative Finance.

Worldwide, banks are being left in the dust as a new breed of agile lenders with flexible, bespoke solutions, digital, fully automated platforms, and far lower barriers to entry bring finance to businesses formerly excluded from traditional lending channels.

Cash flow is the lifeblood of your business. Primarily, it comes from customers or clients buying your products or services, but can also come from loans, investor capital, or interest accrued on savings and investments.

In recent years, a host of alternative financing options have emerged offering loans that are faster, more flexible and more affordable than traditional lenders such as banks. 

One of the most important advantages of alternative financing is that the lending criteria required by these alternative options are far less restrictive than those that traditional banks require.

It’s not easy being a small business right now. Nearly a decade since the 2008 financial earthquake, GDP growth has petered out and the South African economy has moved into another recession.

In an environment fraught with economic and socio-political uncertainty, banks are again tightening up their lending practices – with the result that small businesses across South Africa are struggling to secure the funding they need to grow.

Cash is like water. Just like your body needs water every day to survive, your business needs cash to stay afloat. Most business owners are good at selling their services or pushing product, but are less effective at controlling their cashflow. 

Your business might be profitable on paper, but if the cash isn’t flowing in a steady stream then you may not be able to realise those profits. Without cash your profits don’t mean much.