How a revolving credit facility helps SMEs this November

November can be a tricky time for UK businesses. You might have Black Friday stock to order, extra staff to pay, and year-end bills landing just as customer payments slow down. It’s a perfect storm – and one that can catch out even the most prepared businesses.

But there are ways to smooth out the bumps. One of those ways is a revolving credit facility, which lets you borrow, repay, and reuse funds as needed. Unlike inflexible business loans or limited credit cards, it adapts to your cash flow, giving you breathing room when you need it most.

Importantly, you only pay interest on the amount you use. So whether it’s a one-off stock purchase or a buffer for unexpected costs, you’re always in control.

In this article, we’ll explain why November can be a tricky time for cash flow, how a revolving credit facility could help, the pros and cons of using it, and the alternatives to consider.

Key points:

• A revolving credit facility gives you on-demand access to funds (ideal for November’s seasonal squeeze)

• You can use it to pay for stock, payroll, or supplier payments, then repay as sales pick up

• Funding Options by Tide can help when optimisation of working capital isn’t enough, offering access to business finance up to £20 million

Why November tests your cash flow

November is a month of contrasts. You’ve got the promise of Black Friday and Christmas sales just around the corner, but you’ve also got upfront costs that can’t wait (e.g. stock orders, seasonal staff wages, and supplier deposits) and customers who might still be paying off their summer spending.

For many businesses, particularly those in retail, hospitality, and agriculture, this is the time of year when cash flow can get tight. You’re spending more to prepare for the busy season, but the revenue from those sales hasn’t landed yet. And if you’re waiting on late-paying clients or dealing with higher overheads, the squeeze can feel even tighter.

Nearly half (47%) of UK SMEs face cash flow challenges at some point in the year. But in November, those challenges can hit all at once. You might need to order extra stock to meet demand, hire temporary staff, or pay suppliers upfront to secure the best deals. And without a financial buffer, you might feel stuck between a rock and a hard place.

A flexible credit line for SMEs comes in the form of a revolving credit facility. It bridges the gap between what you need to spend now and what you’ll earn later – so you can focus on making the most of the busy season rather than worrying about how to pay for it.

How a revolving credit facility fixes November’s challenges

A revolving credit facility is a flexible credit line for your business, and it’s designed for exactly this kind of scenario. You’re approved for a set amount, and you can dip into it whenever you need to. Once you repay what you’ve borrowed, the funds are available to use again, without needing to reapply.

Here’s how it helps with the biggest November cash flow headaches:

• Stock purchases: Black Friday and Christmas require bigger orders, and therefore bigger upfront costs. With a revolving credit facility, you can buy the stock you need now and repay the funds once sales start rolling in.

• Payroll and wages: If you’re taking on extra staff for the busy holiday period, a revolving credit facility ensures you can pay them on time, even if your revenue hasn’t caught up yet.

• Supplier payments: Many suppliers offer discounts for early or bulk payments. A revolving credit facility lets you take advantage of those deals, so you’re not left paying more just because cash is tight.

• Unexpected costs: From broken equipment to last-minute marketing pushes, November has a habit of throwing a few curveballs. But a revolving credit facility gives you a safety net to cover those surprises without derailing your plans.

One of the most attractive aspects of revolving credit facilities is that you’re not committed to using the full amount. You only borrow what you need, when you need it, and you can repay it as soon as your cash flow allows. That flexibility is what makes it such a powerful tool for November.

Compared to overdrafts (which can be expensive) and business credit cards (which often come with high interest rates), a revolving credit facility strikes a balance – giving you the funds you need without the long-term commitment of a loan.

The pros and cons of a revolving credit facility

Like any financial product, a revolving credit facility has its advantages and its risks.

The pros of revolving credit facilities

• Flexibility: Borrow, repay, and reuse funds as often as you need to within your limit

• Speed: Once approved, you can access funds quickly – often within 24 to 48 hours

• Cost-effective: You only pay interest on what you use, not the full amount you’re approved for

• No collateral: Most revolving credit facilities are unsecured, so you won’t need to put up business assets as security

The cons of revolving credit facilities

• Interest rates: While they’re usually lower than credit cards, they can be higher than traditional loans – check the rates before you apply

• Fees: Some lenders charge setup or drawdown fees, so make sure you understand the full cost

• Discipline required: Because it’s so flexible, it can be tempting to overuse – a sensible approach is to treat it as a short-term tool rather than a long-term solution

When used responsibly, a revolving credit facility can actually help you build your business credit score. And because repayments are tied to your cash flow, you’re less likely to run into trouble as long as you plan ahead.

If you’re not sure whether it’s the right fit, our comparison of revolving vs. non-revolving credit might help.

Alternatives to revolving credit facilities

There are lots of short-term business funding products to choose from. Here’s how a revolving credit facility compares with the alternatives:

• Business credit cards: Great for small, frequent expenses, but interest rates are usually higher, and limits can be lower. If you’re making big stock purchases, a revolving credit facility could be a better fit.

• Overdrafts: Useful for emergencies, but credit limits are typically much lower. A revolving credit facility gives you more flexibility and control.

• Trade credit: If your suppliers offer it, trade credit can be a handy way to delay payments. But it’s not always available, and it doesn’t help with other costs like payroll or marketing.

• Invoice finance: If late-paying customers are your biggest issue, invoice finance lets you unlock cash from unpaid invoices. But it’s not as flexible for other expenses.

• Term loans: These give you a lump sum upfront, but you’re locked into fixed repayments, which could be tough if your revenue fluctuates.

Compared to these options, a revolving credit facility sits in the sweet spot – flexible enough to handle November’s ups and downs, but structured enough to keep costs manageable. And because you can reuse the funds, it’s a tool you can rely on year after year.

Find business finance with Funding Options by Tide

Whether you’re looking for a standard business loan, a short-term business loan, or something a little more specialist, like auction finance for property developers, we’re one of the leading names in business finance in the UK, having helped facilitate over £1 billion in finance to more than 20,000 customers.

Checking if you’re eligible is free, only takes a few minutes, and while a full application would impact your personal or business credit score, checking eligibility won’t. Just submit your details via the link below to find out if you could be eligible to borrow up to £20 million.

Find business finance.

FAQs

How quickly can I get funds?

Once you’re approved, you could have the money in your account within 24 to 48 hours. That makes it one of the fastest ways to access short-term business funding when you need it urgently.

What if my credit score isn’t perfect?

You shouldn’t need a flawless credit history to qualify. Lenders look at your business’s cash flow and trading history too, so even if your score isn’t perfect, you could still be eligible.

Can I use it for any business expenses?

Yes – whether it’s stock, wages, or unexpected costs, the funds are yours to use as you need them.

Will it affect my credit score?

Responsible use can actually help build your business credit score. Just make sure you keep up with repayments. Conversely, not repaying on time or missing payments could harm your credit score and make it harder to access funding in the future.

Is my business too new to qualify?

Some lenders work with businesses that have been trading for at least six months. If you’re newer than that, unsecured business loans might be a better option.

Can I repay early to save on interest?

Many lenders let you repay early without penalties, so you can clear the balance as soon as your cash flow allows.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.