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Which facilities allow staged drawdown
A standard term loan is usually drawn in full at completion. But a revolving credit facility lets you draw, repay and redraw up to a limit as you need, and some project or development facilities release funds in tranches against milestones. If your need is phased, the product matters — see loan versus overdraft.
Why staged drawing saves money
On facilities that charge interest on drawn balances, taking funds only as you need them keeps your interest cost down — you are not paying for money sitting idle. A revolving line is built for exactly this. On a term loan drawn in full, interest runs on the whole amount from day one, so drawdown timing matters less there. The drawdown-and-interest guide explains the mechanics.
Choosing the right structure
Match the facility to how you will spend the money: one lump for a single asset suits a term loan; a series of costs over time suits a flexible or tranched facility. Model the cost of each on the repayment calculator, and confirm affordability with the affordability calculator before you commit.
Frequently asked questions
Do I pay interest on undrawn funds?
On a revolving facility, usually not — interest applies to drawn balances, though a facility fee may apply on the limit. On a term loan drawn in full, interest runs on the whole amount from drawdown.
Which is cheaper, a term loan or a flexible facility?
It depends on how you use it. If you need the full sum continuously, a term loan is often cheaper; if you dip in and out, a flexible facility that charges interest only on what you draw can cost less overall.
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