A term loan delivers a fixed sum upfront and you repay it over an agreed schedule — once it is paid, it is gone. A revolving credit facility gives your company a standing limit you can draw against, repay, and draw again, indefinitely while the facility is open. Credicorp Flex is a revolving facility; Credicorp's Business Loan is a term product.
The practical difference in day-to-day use
With a revolving facility you only pay for what you have drawn. If your company draws £30,000 of a £50,000 limit, you are charged on £30,000. Repay it and the full £50,000 is available again immediately. This suits businesses with lumpy, recurring cash-flow needs — payroll bridges, rolling supplier payments, or seasonal peaks — where the requirement resets rather than resolves.
A term loan is cleaner for a one-off investment: you know the amount, the schedule, and the exit date. There is no temptation to redraw, and the commitment is finite.
Cost structure differs too
Term loans typically quote a flat fee or total repayable amount. Revolving facilities usually charge interest only on the drawn balance, which can be lower in total if your company repays quickly — but can accumulate if the balance is rarely cleared. Read the cost-of-credit disclosure for either product before committing.
Choosing based on your cash-flow profile
Map your expected drawing pattern over the next six months. If you anticipate a single lump-sum need, a term loan is usually simpler and cheaper. If your needs are recurring or unpredictable in timing, a revolving facility preserves flexibility without requiring you to re-apply each time.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Short-term loan vs long-term loan, Credicorp Slice vs a business credit card