Quick summary — the short answer

Short answer: Often yes — a revolving credit facility (RCF) or staged‑draw loan can be used to pay fit‑out contractors in instalments, as long as the chosen lender will allow staged drawdowns and the facility is sized and secured appropriately. Alternatives exist and may suit some projects better.

UK Business Loans is a free introducer that can match your business to lenders and brokers experienced in fit‑out finance (loans from around £10,000 upwards). Submitting an enquiry is non‑binding and does not affect your credit score. Get Quote Now — Free Eligibility Check

What is revolving credit?

A revolving credit facility (RCF) is a line of credit that a business can draw from, repay and draw again during the facility term. It works like a commercial credit card or overdraft but is usually formalised with a lender for a set limit and period.

Key features:

• Credit limit: agreed maximum you can borrow.
• Multiple draws and repayments: borrow as needed up to the limit.
• Interest: charged on the outstanding balance (not the full limit).
• Fees: arrangement, commitment (on unused portion) and possible facility renewal fees.

A lender may call this an RCF, business overdraft, flexible working capital facility or staged‑draw term facility — the name varies, but the behaviour is similar.

What are staged fit‑out payments?

Fit‑out projects (retail, hospitality, offices) are usually delivered in phases: design, mobilisation, first fix, second fix, decoration, commissioning and snagging. Contractors commonly invoice at agreed milestones to cover labour, materials and subcontractors.

Staged payments protect both contractor and client and help cashflow for larger projects, but they require matching your finance timing to the contractor’s payment schedule.

Can you use revolving credit for staged fit‑out payments?

Yes — many businesses fund staged fit‑out payments with a revolving credit facility or a staged‑draw loan. Success depends on several factors:

Conditions lenders will consider

• Facility design: the lender must allow staged drawdowns (some issue a single advance only).
• Size: the limit must cover peak drawdown(s), VAT and any retention the contractor holds.
• Security & covenants: lenders often ask for a charge over commercial property, a debenture, or other security; smaller companies may face personal guarantees.
• Drawdown process: some lenders require contractor certificates, QS sign‑offs or invoices before releasing each tranche — this can add admin time.
• Credit profile: trading history, turnover and existing borrowing affect availability and price.
• Timescales: quick, smaller facilities may be agreed in days; larger secured facilities can take several weeks.

When structured correctly an RCF is efficient — you only pay interest on what you draw, and you retain headroom for working capital or unforeseen costs. If a lender won’t offer an RCF, they may offer a staged term loan where each tranche is pre‑agreed in advance.

Typical providers who structure staged drawdowns include high‑street banks, challenger banks, and specialist commercial lenders working with brokers.

Benefits and drawbacks of using revolving credit for fit‑outs

Benefits

• Flexibility: draw only what you need and when you need it.
• Interest efficiency: pay interest on outstanding balance only.
• Contingency: headroom for unexpected costs, variations and retention.
• Cashflow management: keeps daily working capital separate from project spend.

Drawbacks

• Security & guarantees: often required, especially for larger sums.
• Fees and commitment charges: for unused portions or arrangement fees.
• Administrative steps: staged releases linked to certificates can slow payments.
• Impact on other lending: a large RCF may reduce headroom for future borrowing.

Practical tip: size the facility for peak requirements (including VAT and retention) rather than just the average spend.

Alternative finance options for staged fit‑out payments

• Staged-term loans: lender advances tranches on milestones — less flexible than an RCF but straightforward.
• Asset finance: funds specific equipment or kitchen installs rather than general fit‑out costs.
• Invoice finance: unlock cash from sales if you have receivables to use as security.
• Supplier credit or retentions: negotiate payment terms directly with contractors.
• Commercial card / purchasing card: short-term solution for smaller suppliers.
• Short-term bridging loans: for time‑sensitive draws where quick settlement is needed.

Choosing the right route depends on project size, security available and whether you need ongoing flexibility or a one-off advance.

What lenders and brokers typically look for — quick eligibility checklist

• Company trading history and recent accounts (2–3 years where available).
• Turnover and profitability trends.
• Credit file and details of existing borrowing.
• Security available (commercial property, plant & machinery, personal guarantees).
• Fit‑out cost plan, contractor quotes, a clear payment schedule and proposed drawdown milestones.
• VAT registration status and how VAT will be treated in funding.
• Project timetable and contingency (allow 10–20% for variations).

Gather these documents before you submit an enquiry to speed the matching and decision process.

How UK Business Loans can help you get matched

We are not a lender — we introduce businesses to lenders and brokers who specialise in commercial fit‑out and staged finance. Our process is free and no‑obligation:

1. Complete a short enquiry (2 minutes).
2. We assess your needs and match you to 1–3 suitable lenders or brokers.
3. Partners contact you to discuss terms; lenders may request documentation and run credit checks if you proceed.

Ready to get matched? Get Quote Now — Free Eligibility Check

For more general fit‑out lending options see our guide to fit‑out finance.

Typical costs & timeframes

Examples only — actual offers depend on borrower profile and lender:

• Interest rates: can range from mid single digits to low double digits (dependent on security and credit risk).
• Arrangement fees: often 0.5%–2% of the facility value.
• Commitment fees: 0.25%–1% per annum on undrawn amounts in some facilities.
• Decision times: same‑day to a few days for small unsecured facilities; 1–6 weeks for larger or secured facilities.

Always ask for full written terms, including exit and early repayment fees.

Mini case study

An independent café required £80,000 to complete a phased kitchen and front‑of‑house fit‑out. We introduced them to a specialist broker who arranged a revolving facility with staged drawdowns tied to contractor certificates. The business paid interest only on drawn amounts and had contingency headroom. Agreement was reached in 10 days and drawdowns were released against milestones.

Step‑by‑step checklist to prepare before you apply

1. Collect contractor quotes, contracts and the proposed drawdown schedule.
2. Prepare company accounts (last 2–3 years) and recent management accounts.
3. Create a simple cashflow forecast showing how repayments will be covered.
4. List existing borrowings and security you can offer.
5. Decide your required facility amount (size for peak drawdown + VAT + retention).

When ready, start a free eligibility check: Start Free Eligibility Check

Frequently asked questions

Can I use revolving credit for staged fit‑out payments and be matched through UK Business Loans?

Often yes. Submit a short enquiry and we’ll match you to lenders/brokers who can structure staged drawdowns where possible.

Will applying to UK Business Loans affect my credit score?

No — submitting the enquiry via our site is a non‑credit‑search introduction. Lenders may run credit checks later if you choose to proceed.

Do you lend directly?

No. We introduce your enquiry to lenders and brokers. Our service is free and without obligation.

Can I get a revolving credit facility for a small fit‑out under £10,000?

We generally place funding requests from around £10,000 upwards. Smaller projects may be better served by commercial cards, supplier credit or short‑term loans.

How quickly will lenders contact me after I submit an enquiry?

Often within hours during business times. Complex secured facilities may take longer as lenders request documents and valuations.

What documentation is needed to support staged payment drawdowns?

Typically: contractor invoices, milestone certificates or QS sign‑offs, copies of contractor contracts, company accounts and a project cost plan.

What if my contractor wants staged deposits but I can’t offer security?

Some lenders provide unsecured facilities, but these may cost more and have stricter credit criteria. Alternatively, consider supplier terms, card facilities, or staged-term loans arranged by brokers.

Are the lenders you match me with experienced in fit‑outs?

Yes — we match you to lenders and brokers who specialise in the type of finance you need; the final decision rests with the lender or broker you choose to proceed with.

Ready to get a free eligibility check?

Complete a short enquiry and we’ll match your business to lenders and brokers who understand staged fit‑out funding. No obligation. No initial credit check.

Get Quote Now — Free Eligibility Check