How the running-credit facility differs from a one-time loan
If you have borrowed from us before, you will know our live product as a one-time loan: a fixed sum, drawn down once, repaid on a set schedule. We are also introducing a second kind of product — a running-credit facility — that works differently. This article explains the difference between the two so you understand what each is for. Before we start, one important note: the running-credit facility is being introduced and is not necessarily available to everyone yet, so for what is actually on offer to you right now, see our business loans page.
The one-time loan
Our established product is a short-term Business Bridging Loan under a Business Loan Agreement. The shape of it is simple: you agree a fixed amount, you receive that whole amount in a single drawdown to the company's bank account, and you repay it over an agreed term — between 14 and 84 days — in weekly or fortnightly instalments. When you have repaid it, the agreement is complete. If you want to borrow again, that is a fresh decision and a new agreement.
This structure suits a specific, one-off need: a known gap to bridge, a single bill to cover, a particular opportunity with a clear cost. You know exactly what you are borrowing, exactly what it will cost, and exactly when it ends — all set out on your Key Information Sheet (KIS) before you sign.
The running-credit facility
A running-credit facility — governed by a Revolving Credit Facility Agreement rather than a Business Loan Agreement — works more like a flexible limit than a single lump. The defining feature is that you can draw, repay and redraw:
- You are approved up to an agreed credit limit.
- You draw what you need, when you need it, rather than taking the whole amount at once.
- As you repay, that headroom becomes available to draw again, up to the limit.
That makes it suited to recurring or unpredictable short-term needs — where the amount and timing vary — rather than a single fixed requirement. Instead of taking out a new loan each time, you draw against the facility as the need arises.
The key differences at a glance
Put simply:
- Drawdown: one-time loan = a single drawdown of a fixed sum; facility = multiple draws up to a limit.
- Repayment: loan = a fixed schedule to a defined end date; facility = you repay and can redraw the available headroom.
- The contract: a Business Loan Agreement for the one-time loan; a Revolving Credit Facility Agreement for the facility.
- Best for: loan = a known one-off need; facility = recurring or variable short-term needs.
Because these are genuinely different contracts with different mechanics, it is worth understanding which one you are entering. Our guide to loan agreement vs facility agreement compares the two documents directly and is the right place to go before signing either.
Which is right for you
Neither product is better in the abstract — they answer different questions. If your company has a single, defined need with a clear end, a one-time loan gives you certainty: fixed amount, fixed cost, fixed end date. If your company has a pattern of short, recurring needs and wants flexibility rather than repeated applications, a running-credit facility may fit better, once it is available to you.
Whichever you consider, the same discipline applies: read the KIS, understand the total cost, and only borrow what the company can afford to repay. And because the running-credit facility is still being rolled out, always check /business-loans/ for the products, amounts, terms and costs currently offered to your company before you make a decision.