Quick answer: A revolving credit facility is a pre-approved funding limit that a business can draw down, repay, and draw down again, without reapplying each time — similar in principle to a credit card but sized and priced for business use. It differs from a term loan, which pays out once as a lump sum. Availability and terms depend on the lenders on New Heights Finance’s panel at the time of application — speak to our team to confirm current options for your business.
Related: Business line of credit · Working capital loans
Key facts
| How it works | A set limit you draw against, repay, and redraw — not a one-time lump sum |
| Interest | Typically charged only on the amount drawn, not the full limit |
| Term | Ongoing, reviewed periodically by the lender |
| Security | Depends on the lender and the size of the facility |
| Who arranges it | New Heights Finance, as a broker, can advise on where this fits among current lender-panel options |
What is a revolving credit facility?
A revolving credit facility is a pre-approved funding limit a business can access repeatedly. Rather than receiving a single lump sum and repaying it on a fixed schedule (as with a term loan), the business draws funds as needed, repays them, and can draw again — up to the agreed limit — without a fresh application each time. Interest is usually charged only on the portion drawn down, not the full limit.
This structure is well established in South African personal banking — every major bank offers one — but the same mechanic, sized and priced differently, is also used for business funding.
How does a revolving credit facility work?
- A lender assesses your business and sets an approved limit based on turnover, trading history, and (where relevant) security.
- You draw down funds as needed, up to that limit.
- You repay on the lender’s terms — interest accrues on what’s drawn, not the unused portion of the limit.
- As you repay, that amount becomes available to draw again — the facility “revolves” rather than being used up once.
- The lender reviews the facility periodically and may adjust the limit based on your business’s performance.
Revolving credit facility vs business overdraft vs term loan
| Revolving credit facility | Business overdraft | Term loan | |
|---|---|---|---|
| Structure | Set limit, draw and repay repeatedly | Attached to your bank account, negative balance up to a limit | Lump sum, fixed repayment schedule |
| Interest charged on | The amount drawn | The amount overdrawn | The full amount from day one |
| Best for | Recurring or unpredictable funding needs | A standing buffer on your operating account | A specific, one-off need |
| Reapplication | Not needed within the limit | Not needed within the limit | Required for each new loan |
Revolving credit facility vs business line of credit
These terms describe closely related structures, and you’ll see both used in South Africa’s business lending market. A business line of credit is generally the same underlying mechanic — a limit you draw against repeatedly — but the term is more commonly used by newer, fintech-style lenders, while “revolving credit facility” is the term used by the major banks. If you’ve seen either term while researching funding, they’re worth comparing side by side rather than treated as entirely separate products.
Who qualifies for a revolving credit facility?
Lender criteria vary, but typically include:
- An established trading history and demonstrable turnover
- 6 months bank statements showing consistent cash flow
- In some cases, security, depending on the size of the facility
Speak to New Heights Finance to confirm the specific eligibility criteria for the lenders currently on our panel.
FAQs
Is a revolving credit facility the same as a business overdraft?
They’re similar in that both let you draw and repay repeatedly rather than taking a single lump sum, but a revolving credit facility is typically a standalone facility with its own limit, while an overdraft is attached to your existing bank account.
Is a revolving credit facility the same as a business line of credit?
They describe closely related, often overlapping structures. “Revolving credit facility” is more commonly used by traditional banks; “business line of credit” is more common among newer lenders. See our business line of credit page for the comparison.
Do I pay interest on the full limit or only what I use?
Typically only on the amount you’ve drawn down, not the unused portion of your limit — but this depends on the specific lender’s terms.
Is a revolving credit facility secured or unsecured?
It depends on the lender and the size of the facility. Smaller facilities may be unsecured; larger ones may require security.
Does New Heights Finance arrange revolving credit facilities?
New Heights Finance, as a broker, can advise on where a revolving credit facility fits alongside other business funding options and matches applications to lenders on its panel.
Want to know if a revolving credit facility suits your business? Apply for business finance online now.