Credit & Loan Facilities - Streamline the Process

There are many reasons to choose a process agent to assist with your credit and loan facility agreements. Working with an expert who has an in-depth understanding of your legal proceedings means they can provide customised services according to your requirements. You’ll benefit from the knowledge and experience of a responsive third party who will oversee legal proceedings and help ensure your transaction completes seamlessly.

A revolving credit facility is a flexible funding option that allows you to withdraw money to fund your business, repay it, and then borrow again according to your needs. There will be a maximum credit amount the business can access whenever they like. For example, a revolving credit facility can be a useful short-term financing solution if the business has a low cash balance to support its net working capital needs.

Flexibility is the main advantage of a revolving credit facility as it gives the business easy access to cash. Revolving credit facilities also only charge interest on the cash that’s been withdrawn rather than the whole credit limit. However, the lender may charge a commencement fee as compensation for offering open access to a loan where interest payments are only activated upon withdrawal.

In addition, a revolving credit facility will often include a cash sweep provision stipulating that excess free cash flow will be used to pay down any outstanding debt. The benefit of this is that the business will make faster repayments, but this may also be a potential disadvantage as cash reserves can’t be used for other purposes (e.g. distributing cash to shareholders or making large purchases).