What is a clean-down period?

A clean-down requires the facility to be repaid to zero (or a low level) for a short period each month, quarter, or half-year. It proves the facility is funding working capital swings rather than masking long-term debt.

Revolving credit facility vs asset-backed line: which one?

If your business is profitable and cash-generative, an RCF gives maximum flexibility with no borrowing-base reporting. If profitability is still building but you have receivables or inventory, a formula-based asset-backed line is usually more accessible.

Cashflow financing

Revolving Credit Facility

A revolving credit facility (RCF) is a committed line of credit that a profitable business can draw and repay at will. Unlike formula-based lines, availability is not tied to receivables or other assets, making it the most flexible working capital instrument available.

RCFs suit medium to large businesses with sustainable models, long-term customers, and good margins, where the core business is profitable and cash-flowing. They cover seasonal cash swings, working capital, and smaller corporate moves, and are often paired with term loans that carry the longer-term capital.

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Indicative ticket

$5M-$100M

Term: 1-5 years
Repayment: Flexible capital repayments, with a monthly, quarterly, or bi-annual clean-down period
Covenants: 1-2 covenants: balance sheet and/or cashflow tests
Security: Senior secured over all assets
Pricing: Arrangement fee, interest, non-utilisation fee, early repayment fee

Indicative only and subject to diligence. Actual terms depend on your business and the market.

Business profile

Who revolving credit facility is for

$15M+ run-rate revenues
Medium to large businesses in a steady or growing market
Sustainable model: long-term customers, good margins
Core business profitable and cash-flowing (or able to be); private or listed

Debt purpose

What the capital is for

Working capital
Seasonal cash swings
Minor acquisitions
Recapitalisations and liquidity

Benefits

Why borrowers choose it

True revolver: highly flexible, drawn at will
Availability not tied to any formula
Usable for a wide range of purposes
Often paired with term loans for long-term capital

When not to use it

An honest word of caution

!When longer-term capital is required
!For smaller businesses with unpredictable financials

How it compares

Versus an asset-backed line, an RCF's availability is not tied to a borrowing-base formula, but it requires a profitable, cash-generative business to support it. Versus a term loan, it flexes with need rather than providing fixed long-term capital.

Terms, criteria, and sizing shown are indicative, not exhaustive, and subject to further diligence on the company and its assets.