The three kinds of flexibility
| Kind | What it means | Which products have it |
|---|---|---|
| Flexible draw | Take money when you need it, not all at once | Line of credit |
| Flexible payment | Payment moves with your revenue | Revenue-based financing |
| Flexible use | No restriction on what you spend it on | Most working capital products |
Flexible draw
A line of credit is the only structure that genuinely lets you take money in pieces. You draw what a specific need requires, pay on the drawn balance, and the room returns as you repay. For a business that buys opportunistically two or three times a year, it costs far less over twelve months than three separate one-off facilities.
Flexible payment
Revenue-based financing ties the remittance to your sales, so strong weeks pay more and slow weeks pay less. That is real flexibility for a seasonal business — but check the reconciliation clause, because that is the mechanism that actually makes the payment adjust. Some agreements require you to request it in writing within a set window.
What is not flexibility
Common questions
Which product is genuinely the most flexible?
A line of credit, for draw flexibility. Revenue-based financing, for payment flexibility. They solve different problems.
Can payments drop if my revenue drops?
Only if the agreement has a reconciliation clause. Find it before signing and know how to invoke it.
Is a line of credit harder to get?
It takes longer to set up than a one-off facility, which is why setting one up before you need it is worth doing.
Can I use funding for anything?
Working capital is generally unrestricted in use. Equipment and purchase order financing are tied to what they fund.
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