What Can You Use a Revolving Credit Facility For?
A revolving credit facility is often misunderstood as a specialist finance product. A revolving credit facility is a flexible line of funding that allows used by many UK SMEs to manage cash flow timing. It allows you to withdraw capital as needed, repay it as your cash flow allows, and immediately redraw those funds again without needing a new application.
At Juice our revolving credit facility is part of what we call Smart Growth Capital: funding that supports sustainable, controlled growth rather than growth at all costs
Most businesses do not need funding for one single moment. They need flexibility across everyday costs, inventory, marketing, and seasonal pressure. Money goes out before it comes back in, even when the business is profitable.
This is where a revolving credit facility fits. It allows a business to access funds when costs arise, repay as revenue comes through, and reuse the same credit again. Instead of borrowing once and hoping it lasts, funding becomes part of how cash flow is managed day to day – giving you more control over timing and planning.
In this article, we look at the most common and practical ways SMEs use a revolving credit facility, with real examples that reflect how businesses actually operate.
Common uses for a Revolving Credit Facility
1. Covering Everyday Working Capital Gaps
For many SMEs, working capital pressure shows up in routine expenses rather than big investments.
Payroll runs monthly. Suppliers expect payment upfront. Rent, software, and overheads go out on fixed dates. Revenue, however, does not always follow the same rhythm. Even healthy businesses can feel stretched at certain points in the month.
This is where a revolving credit facility is commonly used, to smooth everyday gaps without locking the business into rigid repayment schedules.
In practice: John runs a local bakery
John runs a neighbourhood bakery. His busiest days are Friday and Saturday. Early in the week, cash can feel tight, even though sales are strong overall.
Staff need to be paid, ingredients need to be ordered, and suppliers expect payment before the weekend rush. The bulk of revenue only comes in once the weekend is over.
With a revolving credit facility, John draws funds during the quieter days to cover costs. After the weekend takings come in, he repays what he has used. The credit then becomes available again for the following week.
This pattern repeats regularly. The facility is not used for emergencies, but as a way to manage predictable timing differences between costs and income.
This approach works well for businesses with recurring expenses and uneven cash flow, where flexibility and reuse matter more than a one off loan.
2. Funding Inventory Ahead of Demand
Ordering inventory is one of the clearest examples of working capital pressure.
Suppliers often require payment upfront, or on short terms. Revenue only arrives once stock is delivered, sold, and paid for. This creates a gap that can limit how much a business is able to order, even when demand is predictable.
A revolving credit facility is often used to bridge this gap, allowing businesses to fund inventory in advance and repay once sales convert.
In practice: Sarah runs an online homeware store
Sarah runs an online homeware business. She knows certain periods of the year drive most of her sales, particularly in the lead up to seasonal campaigns.
To prepare, she needs to order stock months in advance. Suppliers require payment upfront, long before customers place their orders.
Using a revolving credit facility, Sarah draws funds to pay for inventory ahead of peak season. As sales come through, she repays what she has used. Once repaid, the credit becomes available again for the next campaign.
This allows her to order the right amount of stock without tying up all of her cash at once. The facility supports repeat cycles of ordering, selling, and restocking.
This type of funding works well for businesses with cyclical demand and predictable inventory needs, where access to capital at the right time is more important than a one off lump sum.
3. Marketing Spend That Pays Back Over Time
Marketing is another area where costs are paid upfront, but returns build gradually.
Campaigns are launched, budgets are committed, and results follow over weeks or months. For many SMEs, this creates pressure when marketing spend has to be reduced or delayed, not because the channel is unprofitable, but because cash timing feels uncomfortable.
A revolving credit facility is often used to fund marketing activity in a more planned way, allowing businesses to invest, measure results, and repay as revenue grows.
In practice: Aisha runs a subscription software business
Aisha runs a small subscription software company. She invests in paid advertising to acquire new customers. The cost of acquiring those customers is paid upfront, while revenue comes in over time as subscriptions renew.
Rather than using a fixed loan or stretching an overdraft, Aisha uses a revolving credit facility to fund her campaigns. She draws funds to run ads, then repays gradually as subscription revenue increases. When she is ready to scale again, the same facility can be used to fund the next phase.
This approach allows her to match funding to customer payback periods, rather than forcing marketing decisions to fit a rigid repayment schedule.
This works well for businesses where growth investment generates returns over time, and where funding needs repeat as campaigns are refined and scaled.
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4. Bridging Delayed Customer Payments
Many SMEs deliver work or ship products long before they are paid.
Invoices are issued on 30 or 60 day terms. Customers take time to settle. In the meantime, payroll, contractors, rent, and suppliers still need to be paid on schedule.
This creates a recurring timing gap. The business may be busy and profitable, but cash flow feels tight at predictable points in the month.
A revolving credit facility is often used to bridge this gap, smoothing cash flow while payments are outstanding.
In practice: Tom runs a digital agency
Tom runs a digital agency working with mid-sized clients. Most of his contracts are invoiced monthly, with payment terms of up to 60 days.
His team and freelancers are paid monthly, regardless of when invoices are settled. Some months, several large invoices are outstanding at the same time, which puts pressure on cash flow.
Tom uses a revolving credit facility to cover costs while waiting for clients to pay. As invoices are settled, he repays what he has used. When the next set of invoices goes out, the credit is available again.
This allows the agency to operate smoothly without chasing payments or delaying decisions, even when customer payment cycles are slower.
This approach suits businesses where delayed payments are a normal part of how revenue is collected, rather than an occasional issue.
5. Managing Seasonal Peaks and Troughs
Seasonal businesses often face the same challenge every year. Costs rise before the busy period begins, while revenue only follows once demand picks up.
Staffing levels increase. Stock orders grow. Marketing ramps up. All of this happens weeks or months before the peak season delivers income.
A revolving credit facility is often used to manage this imbalance, allowing businesses to prepare in advance and repay as the season unfolds.
In practice: Mark manages a seasonal restaurant
Mark manages a restaurant in a coastal town. Summer is his busiest period, but preparation starts much earlier.
In spring, he increases staffing, orders more stock, and invests in marketing. These costs arrive well before the summer crowds do.
Mark uses a revolving credit facility to cover these upfront expenses. As summer revenue builds, he repays what he has used. Once the season ends, the facility is available again to help prepare for the next busy period, including the run up to Christmas.
This gives him the confidence to plan properly, without relying on short term fixes or delaying preparation.
This approach works well for businesses with predictable seasonal patterns, where funding needs repeat each year rather than happening once.
6. Covering Predictable One-Off Expenses
Some costs are not monthly, but they are not a surprise either.
VAT bills, annual insurance, licence renewals, or bulk supplier payments are all expenses businesses can see coming well in advance. Even so, they can create pressure when they fall at the wrong point in the cash cycle.
A revolving credit facility is often used to handle these moments calmly, without draining day to day cash reserves.
In practice: Emma runs a wholesale business
Emma runs a wholesale business supplying independent retailers. She can secure better pricing by buying stock in bulk, but selling that stock takes time.
Several times a year, she also needs to cover larger one-off costs such as VAT payments and annual insurance. These payments are expected, but they do not always line up neatly with incoming cash.
Emma uses a revolving credit facility to cover these predictable expenses. She draws funds when the payment is due, then repays gradually as stock sells through. Once repaid, the credit is available again for the next bulk order or scheduled cost.
This allows her to take advantage of supplier discounts and plan ahead, without putting strain on everyday operations.
This approach suits businesses with known but uneven expenses, where timing matters more than the total amount.
What These Use Cases Have in Common
The businesses in these examples are very different, but the cash flow pattern is the same.
Costs come first. Revenue follows later. And the need for funding repeats.
Whether it is payroll before a busy weekend, inventory ordered ahead of demand, marketing paid upfront, or invoices waiting to be settled, the pressure comes from timing rather than performance.
In each case, the business is not looking for a one off injection of cash. It needs a way to manage predictable gaps, month after month, season after season.
This is where a revolving credit facility fits. It allows businesses to draw funds when costs arise, repay as income comes in, and reuse the same credit again. Funding becomes part of planning, not something reached for only when cash feels tight.
When working capital is managed this way, decisions tend to feel calmer. Growth feels more confident and deliberate. And cash flow becomes easier to control as the business scales
How a Revolving Credit Facility Compares to Other Funding Options
Not all funding tools are designed to solve the same problem. Many issues arise when a product built for one purpose is used for another.
The table below outlines how a revolving credit facility compares to other common forms of SME funding, based on how they are typically used in practice.
At-a-glance comparison
How to interpret this
A business overdraft is designed as a safety net. It can be helpful for small timing gaps, but it is less predictable when used continuously.
Term loans work best for defined, one-off investments. They provide certainty, but little flexibility if funding needs change.
Invoice finance can be useful where revenue is tied up in invoices, but it only applies when customers pay on credit terms.
A revolving credit facility is designed for repeat use. It supports working capital across different scenarios, offering transparent, flexible funding that allows businesses to draw funds when needed, repay as revenue comes in, and reuse the same credit again.
The key difference is not access to funds, but how well each option matches the way cash flows through the business.
What a Revolving Credit Facility Is Not Designed For
A revolving credit facility is a flexible tool, but it is not the right fit for every situation.
It is not designed for long term asset purchases, such as buying property, vehicles, or large pieces of equipment that will be used over many years. These types of investments are usually better suited to asset finance or longer term loans with fixed repayment schedules.
It is also not intended for acquisitions or major, one off transactions. Revolving credit works best when funding needs repeat and cash flow cycles are predictable.
Most importantly, a revolving credit facility is not a solution for ongoing losses. If a business is consistently spending more than it earns, adding flexible credit can increase pressure rather than reduce it. That’s why we offer Smart Growth Capital. It’s designed to support businesses through Insights, not to mask deeper financial issues.
Used in the right context, a revolving credit facility supports healthy businesses that need help managing timing. Used outside of that context, it can become the wrong tool for the job.
Understanding these boundaries helps ensure that working capital is used to support growth and stability, rather than masking deeper issues.
Flexible Funding for How Businesses Really Operate
Most SMEs do not struggle because they lack demand or ambition. They struggle because cash does not always move in a straight line.
Costs often arrive before revenue. Funding needs repeat. Cash flow changes with growth, seasonality, and customer behaviour. When these patterns become part of everyday operations, the structure behind working capital matters.
A revolving credit facility is designed for this reality. It allows businesses to manage timing with more control, drawing funds when costs arise, repaying as income comes in, and reusing the same credit across multiple cycles. For a more comprehensive overview of working capital for UK businesses, check out our guide.
The right funding setup does not remove all pressure, but it can make decisions clearer and planning more predictable.