Business Line of Credit
A business line of credit is a revolving credit limit you can draw from, repay, and draw from again, paying interest or fees only on what you use.
It typically fits businesses with steady revenue that want a standing cushion for cash flow gaps, seasonal swings, or recurring expenses.
Business Line of Credit quick facts
These are the typical terms for business line of credit. Your actual terms depend on underwriting.
| Typical amount | $10,000 to $250,000 limit |
|---|---|
| Typical term | 6 to 24 month draw periods, often renewable |
| Typical funding speed | Typically 2 to 7 business days |
| Typical minimum requirements | 1+ year in business, $20,000+ monthly revenue, 600+ credit |
| Cost structure | Interest or draw fee on the outstanding balance |
Business Line of Credit: good fit or not?
This option works well for some situations and is a poor match for others.
Good fit
- Recurring or unpredictable short-term expenses
- Seasonal businesses smoothing out slow months
- Owners who want funds available before they need them
- Businesses with steady revenue and fair to good credit
Not a good fit
- One-time large purchases better suited to a term loan
- Very new businesses with limited history
- Long-term financing for equipment or real estate
Documents usually needed
Having these ready typically speeds up review. A funder may request additional items.
- Completed application
- Most recent 3 to 6 months of business bank statements
- Driver license for each owner
- Most recent business tax return (for larger limits)
- Year-to-date profit and loss statement (for larger limits)
Business Line of Credit: how it works
The process typically follows 4 steps from first conversation to funding.
Apply
Share an application and recent bank statements.
Review your limit
We present available limits, draw terms, and repayment schedules.
Open the line
Sign the agreement and link your business account.
Draw as needed
Request funds when you need them and repay to free up your limit.
Business Line of Credit vs. Term Loan
The main difference comes down to structure, cost, and timing. Here is how they typically compare.
| Feature | Business Line of Credit | Term Loan |
|---|---|---|
| Structure | Revolving, reusable limit | One lump sum |
| You pay on | Only the amount drawn | The full loan amount |
| Best for | Ongoing or uncertain needs | A defined one-time investment |
| Typical term | 6 to 24 months, renewable | 1 to 5 years |
Typical characteristics. Terms vary by funder and file.
Business Line of Credit FAQs
How is a line of credit different from a credit card?
Both are revolving, but a business line of credit usually offers higher limits and deposits cash directly to your bank account. Terms and costs vary by funder.
Do I pay anything if I do not draw?
Many lines charge nothing until you draw. Some charge a maintenance or annual fee. We will flag those fees when reviewing options.
Is a business line of credit secured?
Many smaller lines are unsecured with a personal guarantee. Larger lines may be secured by receivables, inventory, or other business assets.
Can my limit increase over time?
Often, yes. Many funders review limits after several months of on-time payments and steady revenue.
How fast can I access funds after approval?
Once the line is open, draws are typically deposited within 1 to 2 business days, depending on the funder.