Revolving credit is a flexible credit facility that allows your business to take multiple loans within an allotted period, as long as repayments of similar amounts are made within that same period. Loan amounts are capped to the approved credit limits granted to your business – similar to the mechanisms of credit cards.
Unlike term loan facilities that offer only one-time disbursement of funds with fixed repayment periods, a revolving credit facility provides your business with extra funding for operational needs while giving greater flexibility and control over repayments.
At Reliance Advisory, our consultants can help and assess the suitability of such facilities for your business, while keeping your financial health in check.
Other Forms of Credit Facilities
Invoice Financing
A loan that helps pay your suppliers for goods purchased
Overdraft Line
business can draw upon when you have exceeded your account balance
Invoice Financing
Supplier Side Invoice Financing - A loan that helps pay your suppliers for goods purchased, of which loan amount is based on transport documents and invoices for the goods.
Buyer Side Invoice Financing – A loan that pays you ahead of actual payments made by your customers for goods delivered and services rendered by you. The loan amount will be based on invoices issued by you to your customer.
Businesses that require upfront capital to purchase goods or bridge their cash conversion cycle can apply for supplier side invoice financing.
Businesses maintaining long credit terms with their customers but require upfront capital can apply for buyer side invoicing financing.
These business entities must be registered with ACRA, with at least 3 years of operations and at least SGD1,500,000 in annual revenue.
*Subject to current regulatory framework
Usually short durations payment terms of 45 days to 180 days, with exceptions depending on the financial institution. Interest is calculated on the number of days used for the repayment.
Overdraft Line
An overdraft revolving line of credit facility that your business can draw upon when you have exceeded your account balance. Interest will be charged only on the amount drawn. Depending on your financial health, such overdraft line is usually tagged with a collateral.
Any businesses that have an account with any financial institutions that provides the Overdraft facility.
Incur interest only as and when the facility is used, with low interest rates and no fixed tenor.