“From conversations with business owners and brokers, we found that £50k was often the ‘magic number’ for working capital for many businesses.”
– Reparo’s commercial director, Steve Richardson
Specialist commercial finance provider, Reparo Finance, has launched a new revolving credit facility to support SMEs with cashflow to fund growth. It aims to plug a gap in the market for flexible access to £25,000-£75,000 over the course of a financial year.
Compared to repayments on a fixed term loan, the revolving credit facility is often a cheaper alternative for businesses, if used as intended – drawing down funds as needed and paying funds back incrementally, before the 12-month term ends.
Reparo’s revolving credit facility is a pre-agreed facility that offers businesses the flexibility to draw down funds as needed with up to 12-month terms.
It has a minimum first drawdown of £25,000, with further drawdowns as needed (up to two per month). The interest-only payments are calculated daily and paid monthly for the interest accrued over that month.
The revolving credit facility is ideal for SMEs with an ongoing cash requirement to fund growth, whether that’s new hires, new premises, new equipment or simply working capital to pay suppliers or fulfil a big contract.
In parallel, Reparo has shifted its larger, secured interest-only loans into revolving credit facilities, allowing SMEs to access funding from £100,000-£1m, whilst being able to draw and re-pay over a period of up to 24 months. These facilities still require security but can be more cost effective for SMEs than a loan.
Reparo’s commercial director, Steve Richardson, commented: “We know it’s not easy running a business in today’s climate. SMEs with a sub-£1m turnover are often overlooked in the market. There’s a real need there for something different.
“From conversations with business owners and brokers, we found that £50k was often the ‘magic number’ for working capital for many businesses. When using standard unsecured loans to meet this need, businesses risk becoming over-leveraged, taking out £100,000s in loans over the course of a year simply because they needed £50k of working capital on several occasions. Our new facility offers them something more suited to this scenario.
“The new revolving credit facility offers SMEs the funds to fulfil large contracts, expand their team or open a new site – whatever they need to grow.
“Having the funds on tap to draw down as needed allows businesses to react quickly and grab growth opportunities with both hands.”