Business Line of Credit Guides for UK SMEs

A business line of credit is a flexible funding facility that gives your business access to a pre-approved credit limit. You draw what you need, repay it, and the funds become available to draw again.

You only pay interest on the amount drawn, not the full limit. In the UK, the same product is typically called a revolving credit facility.

A lender approves a credit limit for your business. You draw funds when you need them, for working capital, stock, VAT, or payroll — and repay when your cash flow allows.

The facility revolves: once repaid, the funds become available to draw again. Interest applies only to the amount drawn, not the full approved limit.

Nothing, they are the same product with different names. “Business line of credit” is the term commonly used in the United States. In the UK, the same facility is called a revolving credit facility.

Both give access to a pre-approved limit that you draw down, repay, and draw again, paying interest only on what you use.

Requirements vary by lender. Most specialist lenders require the business to be a UK-registered limited company with at least six months of trading history and consistent monthly revenue.

Lenders also assess cash flow patterns — the regularity and predictability of inflows — and in most cases review the personal credit history of the directors.

With a specialist lender using Open Banking, decisions can be reached within 24 hours for straightforward applications. High street banks typically take weeks or months.

Once a facility is in place, drawing down funds is fast — no reapplication needed each time you draw.