2 min read
Definition
An on-demand facility is borrowing the lender can require to be repaid at any time, on demand, rather than over a fixed term. A traditional bank overdraft is the classic example. It offers flexibility but carries the risk that repayment can be called when least convenient.
In plain terms
Because the lender can call it in, an on-demand facility should not be relied on to fund a permanent need. It suits genuinely short, occasional dips — not a structural cash requirement, which deserves committed funding.
Why it matters
Understanding that a facility is on-demand shapes how you use it. See overdraft limit and committed facility.
Related reading
Overdraft limit
An overdraft limit is the maximum a business is allowed to be overdrawn on its current account — the agreed…
Read →
Committed facility
A committed facility is credit the lender is legally bound to provide up to an agreed limit — certainty you…
Read →
Evergreen loan
An evergreen loan is a facility with no fixed final repayment date that renews automatically each period…
Read →
Demand facility
A demand facility can be recalled by the lender at any time, in full — maximum flexibility for them, maximum…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.