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.

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.