Funding · Revolving credit

Revolving business credit: funding that refills as you repay

Revolving business credit is a facility where every dollar you repay becomes available to borrow again, without reapplying. For New Zealand businesses that face the same cash squeeze several times a year, it replaces a string of one-off loans with one reusable limit.

At a glanceOn call
Best for
Repeating cash cycles: stock, payroll, debtors
Trading history
Usually 6+ months
Assessed on
Turnover and bank statements
Reapply each time?
No — repaid funds become available again
Purpose
Business use only
A long row of stocked shelving inside a distribution warehouse

What makes credit “revolving”?

A normal loan runs in one direction: money out to you, then repayments until the balance reaches zero. Revolving credit runs in a loop. You have an approved limit, you draw some of it, and as you repay, the available balance climbs back up so you can draw again.

That loop suits businesses whose cash needs repeat. If you buy stock every quarter and sell it over the following ten weeks, a revolving facility can fund each buy and be cleared by each sell-through, over and over, without a new application each time.

Why would a business choose revolving credit over a one-off loan?

Three reasons come up again and again in conversations with New Zealand business owners:

  • You only pay for what you use. A lump-sum loan starts costing you from the day it lands, even if half of it sits in the bank for months.
  • No repeat paperwork. Once the limit is approved, a draw is usually a request through the lender’s portal rather than a fresh assessment.
  • It matches reality. Very few businesses have one big cash need. Most have a series of small and medium ones scattered through the year.

Which cash cycles does it fit best?

Stock cycles

A Christchurch homewares importer pays its supplier when containers ship, but doesn’t see sales until the goods clear the Port of Lyttelton, reach the warehouse and sell. Revolving credit bridges that eight-to-twelve-week hole each season.

Payroll cycles

A contract cleaning company pays staff weekly but invoices clients monthly. The gap is predictable and repeats every month. A small revolving limit covers it and is cleared when invoices are paid.

Debtor cycles

A marketing agency with clients on 20th-of-the-month-following terms can wait six or seven weeks from finishing work to seeing cash. Drawing to pay contractors, then repaying when clients pay, keeps the agency from turning down work it can’t afford to carry.

How is a revolving limit set?

Lenders look at your turnover, the pattern of deposits and withdrawals in your business bank statements, how long you’ve been trading (usually six months or more) and your credit history. Weaker credit is considered rather than automatically declined.

The limit is typically a proportion of what your business turns over, set so that the repayments are comfortable in your quieter months, not just your best ones. That’s a sensible discipline, and it’s one we’d encourage you to apply yourself.

Using revolving credit well

The businesses that get the most out of revolving facilities treat them as a tool with a job description:

  1. Define what the facility is for — stock, wages, tax timing — and don’t let it drift into funding losses.
  2. Plan the repayment before the draw. Know which invoices or which season will clear it.
  3. Watch the “floor”. If your balance never returns close to zero across a full year, the facility has quietly become long-term debt. That’s the moment to rethink structure, perhaps with a term or property-secured loan.
  4. Review the limit annually against updated turnover.

Our guide to the working capital cycle shows how to measure the gap a revolving facility needs to cover.

What if revolving credit isn’t enough?

Unsecured revolving limits are sized to your turnover, so they can fall short of a big need such as clearing a tax debt or buying out a competitor’s stock. In that case a property-secured loan from $20,000 to $1m, secured on New Zealand property you or a supporting party own, can provide a larger lump sum. It isn’t revolving, but plenty of businesses run both: a secured loan for the big item and a line of credit for day-to-day swings.

Pricing

Every facility is priced on the individual business. We don’t publish rates, because a figure that suits one business misleads another. Your lending specialist will set out the full cost of any facility clearly before you decide.

Getting started

Tell us about your cycle in the 60-second enquiry. It’s free, won’t affect your credit score, and a lending specialist will call to talk through whether revolving credit, a fixed loan or a mix of both fits your business.

FAQ

Revolving business credit: common questions

Is revolving credit the same as a line of credit?

In everyday use, yes. 'Revolving' describes the way the limit refills as you repay. Most business lines of credit are revolving, which is why the terms are often used interchangeably.

How often can I draw on a revolving facility?

As often as your available limit allows. Some businesses draw weekly to fund stock; others draw two or three times a year around seasonal gaps. The lender's terms will set out any minimum draw amounts.

What happens if I don't use the facility for a few months?

That's exactly how a standby facility is meant to work. Whether any charge applies to an unused limit depends on the lender and your agreement, which your lending specialist will explain up front.

Can my limit increase later?

It can. If your turnover grows and your account has been well managed, you can ask for a review. Lenders base any increase on updated bank statements.

Put some capital on call

Tell us what your cash flow looks like. The enquiry takes about 60 seconds, won't touch your credit score, and a lending specialist calls you back.