A credit facility is an agreement between a lender and a business that gives the business access to funding under agreed terms. The word facility simply means the arrangement itself, rather than a single transaction.
Two broad shapes
- A term facility — a set amount is provided, then repaid over an agreed period.
- A revolving facility — the business can draw funds, repay them and draw again up to an agreed limit, a bit like a flexible line.
Why the structure matters
The right shape depends on what the business needs. A term facility suits a known, one-off cost. A revolving or flexible facility suits needs that come and go, such as managing cash flow across busy and quiet periods. The structure affects how and when you repay and how interest accrues.
Credicorp lends only to UK limited companies and LLPs for business purposes. Our Credicorp Flex and Credicorp Slice products are different shapes of facility designed for different needs. The amount, rate and terms that apply are set out in your offer, and we assess affordability before lending. We do not take personal guarantees from directors; the facility is to the company.
See also: What is a revolving credit facility?, What is a credit limit?, How the running-credit facility differs from a one-time loan.