Business line of credit that revolves with you
Flexible, revolving access to working capital — draw what you need, pay interest only on what you use, and reuse your line as you repay. A decision in minutes, with no hard credit pull to see your options.
Draw · Repay · ReuseThe same line, again and again.
What is a business line of credit?
See how a business line of credit works — from drawing funds to repaying your balance and reusing the same available credit again.
Draw what you need
Pull any amount up to your limit — funds can reach your account as soon as the same day.
Pay it down
Repay on flexible terms, with interest only on the funds you actually used.
Use it again
Your available credit replenishes as you repay — no reapplying, ever.
A business line of credit is a flexible form of revolving financing that gives your company access to a set amount of working capital — your credit limit — that you can borrow against whenever you need it. Unlike a traditional term loan that hands you a single lump sum, a line of credit lets you draw only the amount you need, repay it, and draw again, using the same account month after month without reapplying.
The defining feature is that it’s revolving. As you repay the principal you’ve borrowed, that amount becomes available to use again — much like a credit card, but with higher limits, lower rates, and cash you can deposit directly into your business bank account. Just as importantly, you pay interest only on the funds you actually draw, not on your full credit limit. If your line sits unused, no interest accrues — though other fees can still apply, depending on the lender and your agreement.
That combination of flexibility and cost control is what makes a business line of credit one of the most practical small business financing tools available. It’s designed for the moments when your expenses and your income don’t line up perfectly — covering a cash-flow gap, buying inventory ahead of a busy season, making payroll while you wait on invoices, or moving quickly when an opportunity appears.
How does a business line of credit work?
Getting and using a business line of credit follows a simple cycle: you’re approved for a credit limit, you draw funds as needed during the draw period, you repay what you’ve borrowed, and your available credit is restored so you can use it again.
Your credit limit and draw period
When you’re approved, the lender sets a credit limit — the maximum you can borrow at any one time. During the draw period, you can take out funds up to that limit as often as you like, transferring cash straight to your business checking account, usually within one business day. You don’t have to use the whole line, and you don’t have to use it right away.
Interest only on what you draw
Interest begins accruing only once you actually draw funds, and only on the amount you’ve drawn. Repay that balance and interest stops. This is the single biggest difference between a revolving line of credit and a term loan: with a term loan you pay interest on the full amount from day one, while with a line of credit an untouched limit accrues no interest.
Repayment and replenishing your line
Each draw is repaid over a set schedule — commonly with terms of 12, 18, 24, or 36 months — through regular payments of principal and interest. As you pay down the principal, that portion of your limit becomes available to borrow again. That’s the revolving mechanism, and it’s what lets a single line support your business again and again.
What can you use a business line of credit for?
Draw only what you need, when you need it — for almost any cost your business runs into.
Because the funds revolve, a business line of credit can cover almost any short-term or recurring expense — protecting your working capital and smoothing cash flow whenever timing is tight. Owners most often use it to:
- Manage cash flow — bridge the gap between money going out and revenue coming in.
- Purchase inventory — stock up before a busy season or lock in a bulk discount, then repay as it sells.
- Cover payroll — keep every pay run on time even when customer payments run late.
- Buy equipment — spread the cost of tools, machinery, or tech upgrades instead of paying upfront.
- Bridge slow-paying invoices — access cash now while clients take 30–90 days to settle.
- Handle emergency repairs — fix an unexpected breakdown without draining your reserves.
- Smooth seasonal cash flow — carry a seasonal business through quiet months, then pay down when sales rebound.
- Fund marketing campaigns — invest in a growth push and repay from the revenue it drives.
- Cover rent and overhead — stay ahead of recurring short-term business expenses like rent, utilities, and software subscriptions.
…and almost any other legitimate business expense.
Secured vs. unsecured business lines of credit
Business lines of credit come in two forms, and the difference comes down to collateral.
Unsecured business line of credit
An unsecured business line of credit doesn’t require you to pledge specific collateral such as real estate or equipment. Because there’s no asset backing the line, lenders lean more heavily on your revenue, cash flow, time in business, and personal credit to make a decision. Unsecured lines are faster to open and are the most common choice for small businesses that want flexible working capital without tying up assets. Most lenders may still ask for a general lien on business assets or a personal guarantee.
Secured business line of credit
A secured business line of credit is backed by business assets — accounts receivable, inventory, equipment, or cash. Because the lender’s risk is lower, a secured line can often unlock a higher credit limit or a lower interest rate, and it can be easier to qualify for if your credit is still building. The trade-off is that the process takes longer, since the lender needs to value and verify the collateral, and your assets are on the line if you can’t repay.
Which is right for you?
If speed and simplicity matter most and you have steady revenue, an unsecured line is usually the better starting point. If you need a larger limit or the lowest possible rate — and you have assets to pledge — a secured line may be worth the extra step. With Fundur, many businesses get started with no collateral at all, and we’ll help you compare both so you can choose the structure that fits your goals. For how this question works across every financing type, see unsecured business financing generally.
Pay interest only on what you use
Both examples start with the same $300,000 approval — the difference is the balance interest is charged on.
You draw only what you need.
Funded in full at closing.
Understanding how interest is calculated is one part of the cost of a line of credit. The other is pricing — why rates differ from one business to the next, and what to weigh when you compare lenders. Both are worth understanding before you apply.
What affects your rate
There’s no single rate for a business line of credit. Lenders price each line to the business behind it — the more predictable your ability to repay, the stronger the rate you’re offered. Several factors weigh most heavily:
- Revenue and cash flow consistency — a revolving balance is repaid from ongoing cash flow, so steady, recurring deposits indicate lower risk and support a stronger rate.
- Operating history — a longer track record demonstrates you can manage through slower periods, giving lenders the confidence to extend better pricing and higher limits.
- Credit profile — your business and personal credit are the clearest evidence of how you’ve managed debt, and both influence your rate and limit directly.
- Collateral — securing a line with assets gives the lender recourse if repayment stalls, which reduces their risk and can lower your rate; unsecured lines are priced to reflect the added exposure.
What to compare between lenders
Two offers with the same advertised rate can cost very differently. What separates them is structure — how each lender builds its pricing.
Some fold every cost into the rate. Others add charges on top, such as a one-time origination fee, a draw fee when you take funds, or a maintenance fee to keep the line open.
The figure that matters is the all-in cost of borrowing the way you actually plan to use the line. Before you accept an offer, ask for the complete terms in writing.
At Fundur, your full rate and fees are shown clearly up front — so you can compare with confidence, with no surprises after you sign.
Rates and fees vary by lender and by business, and any figures shown are illustrative. Your actual terms are determined during underwriting and disclosed in full before you accept.
Business line of credit vs. term loan
Both are powerful financing tools — they simply solve different problems.
| Line of Credit | Term Loan | |
|---|---|---|
| How you get funds | Draw as needed, up to a limit | One lump sum upfront |
| Interest | Only on what you draw | On the full amount, whole term |
| Reusable | Yes — revolves as you repay | No — reapply for more |
| Repayment | Flexible, based on draws | Fixed, predictable payments |
| Best for | Ongoing & unexpected needs | Large one-time investments |
A term loan delivers a single lump sum that you repay in fixed installments over a set term — ideal for a large, planned, one-time investment where you want predictable payments. A line of credit is built for flexibility: draw what you need, pay interest only on that amount, and reuse the line as you repay.
Many business owners use both. They keep a line of credit open for day-to-day cash flow and short-term needs, and reach for a term loan when they’re making a major purchase like buying a building or a large piece of equipment. If your need is ongoing, seasonal, or unpredictable, a line of credit is almost always the more cost-effective and convenient choice. If the shortfall is a single, defined one instead, a working capital loan covers it in one lump sum. If you are still weighing the two structures, the business loan vs. line of credit comparison sets them side by side on cost, speed, documents and risk.
Business line of credit requirements
Set your numbers and watch your fit update live. Here’s what lenders look for — and checking never touches your credit score.
Requirements vary by lender, but most look at the same core signals to decide whether you qualify for a business line of credit and what limit and rate to offer. The good news: online lenders like Fundur are far more accessible than traditional banks, and many businesses qualify with less-than-perfect credit.
- Monthly revenue. Most lenders want to see consistent deposits — often around $10,000+ per month in your business bank account.
- Time in business. A minimum of six months of operating history is typical; longer is better.
- Credit score. Many lines are available with a personal credit score of 600 or higher. Stronger credit unlocks better rates and larger limits, but revenue and cash flow matter too.
- Business bank account & statements. You’ll typically provide a few months of recent bank statements to verify revenue.
What documents do you need?
To apply, you’ll usually need basic business details and three to six months of recent business bank statements. Larger lines may call for additional documents such as business tax returns, a profit and loss statement, or a balance sheet. A valid government-issued ID and a voided business check are typically required at the time of funding. Thresholds vary by product — see how requirements differ by product.
Can you qualify with bad credit?
Often, yes. Owners with fair or rebuilding credit can still qualify, especially when the business has strong monthly revenue and steady cash flow. A lower score may mean a higher rate or a smaller starting limit, but making on-time payments builds your profile over time and can help you qualify for better terms down the road.
How to get a business line of credit
Applying for a business line of credit through an online marketplace like Fundur is fast and straightforward — most of the process happens in minutes, and many businesses are funded the same or next business day. Here’s what to expect.
1. Complete a short application
Provide basic information about your business — time in business, monthly revenue, and industry — and connect or upload a few months of recent bank statements. Checking your options uses a soft credit pull, so it won’t affect your credit score.
2. Review your offer with an advisor
If you’re approved, you’ll see your credit limit, rate, and repayment terms clearly laid out. A dedicated advisor walks you through the details so you understand exactly what you’re agreeing to before you commit — no fine print, no obligation.
3. Draw your funds
Once you accept, your line is open. Draw any amount up to your limit and the funds are transferred to your business bank account, often as soon as the same day. From then on, the line stays open — repay, and draw again whenever you need it.
To move quickly, have your bank statements ready and your business details accurate and up to date. Complete, organized information is the single best way to speed up approval and funding.
Pros and cons of a business line of credit
Benefits
- Pay only for what you use. Interest applies to drawn funds only; an unused line accrues no interest.
- Reusable capital. Draw, repay, and draw again without reapplying.
- Fast, flexible access. Funds available in as little as the same day, for almost any business purpose.
- Great for cash flow. Smooths the gaps between expenses and income.
- Builds business credit. Responsible use and on-time payments strengthen your profile.
Things to consider
- Variable costs. Rates and some fees can vary by lender, so compare full terms.
- Discipline required. Easy access to funds means it’s important to borrow with a repayment plan.
- Limits scale with your profile. Newer businesses or lower credit may start with smaller limits.
- Not for large one-time buys. A term loan is often better for a single major investment.
Business line of credit FAQs
How does a business line of credit work?
How much can I borrow with a business line of credit?
What credit score do I need to qualify?
What are the rates and fees on a business line of credit?
Is it a secured or unsecured line of credit?
Will applying affect my credit score?
How fast can I get funded?
What can I use a business line of credit for?
Can I qualify with bad credit?
How is a line of credit different from a term loan?
What documents do I need to apply?
Does the credit line renew as I repay it?
Get a business line of credit today
Apply in minutes for a fast decision — no hard credit check to see your options, and no obligation.