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, and checking with Fundur won’t affect your credit.
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 (see inventory financing), 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.
How long a line lasts, and what happens at the end
A line of credit is renewable, not permanent, and that distinction catches people out. Most lines run for a defined draw period — the window in which you can borrow, repay and borrow again — and then reach a decision point rather than simply continuing.
At that point one of two things happens. The line is renewed, usually after the lender re-examines current financials, or it converts into a repayment period in which you can no longer draw and the outstanding balance is paid down on a fixed schedule. Lengths differ from lender to lender, so the term to ask about is not just the rate but how long you can draw and what follows.
- Renewal is a re-underwrite, not a formality — lenders commonly review a line at least annually, against the business as it looks then. A limit can be reduced, or a renewal declined, even where every payment has been made on time, because the review reads current revenue and current obligations rather than payment history alone.
- Revolving and non-revolving are different products — on a revolving line, repaying restores your available credit to draw again. On a non-revolving line it does not: once you have drawn and repaid, that capacity is gone and a further advance means a new application.
- Undrawn does not always mean cost-free — you pay interest only on what you have actually drawn, but an open line can still carry a maintenance fee, and some lenders apply a fee per draw. Ask what an unused line costs before you treat spare capacity as free.
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. Once you have them, the business line of credit calculator will work out what a draw actually costs, including what a per-draw fee adds to the rate.
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.
Who actually offers a business line of credit
“Lenders”, “companies” and “providers” all describe four quite different kinds of institution. They do not want the same borrower, and they do not build the line the same way. Which of them will work with you also depends on where the business is registered: several states set their own disclosure rules for commercial financing, and state-run programmes sit alongside private lenders. Business loans by state covers what applies where you operate, including California and New York.
| Provider | How the line is usually built | Typically strongest on | Where it is hardest |
|---|---|---|---|
| Large banks | Revolving period of a defined length, then a conversion to a repayment period; variable rate quoted as a spread over a published index | Lowest pricing; largest limits; the line sits beside your operating account | Strictest revenue and time-in-business floors; slowest decisions; often an annual fee below a certain line size |
| Community banks & credit unions | Similar structure to a large bank, underwritten locally and often relationship-led | Flexibility on files a national credit box would decline; direct access to the decision-maker | Membership or geographic eligibility; limited or no online servicing |
| Non-bank & fintech lenders | Shorter revolving windows, frequently re-drawn; each draw may amortise on its own short schedule rather than revolving indefinitely | Speed; far lower revenue and time-in-business floors; genuinely unsecured lines | Higher cost; smaller limits; a “line” that behaves more like a series of short loans |
| Marketplaces & brokers | Does not lend. Submits one application to several of the above and returns the offers | Seeing which categories will actually approve you before applying to each separately | The eventual lender, not the marketplace, sets the terms |
Large banks
- How the line is built
- Revolving period of a defined length, then a conversion to a repayment period; variable rate quoted as a spread over a published index.
- Strongest on
- Lowest pricing, largest limits, and a line that sits beside your operating account.
- Hardest
- Strictest revenue and time-in-business floors, slowest decisions, and often an annual fee below a certain line size.
Community banks & credit unions
- How the line is built
- Similar structure to a large bank, underwritten locally and often relationship-led.
- Strongest on
- Flexibility on files a national credit box would decline, and direct access to the decision-maker.
- Hardest
- Membership or geographic eligibility, and limited or no online servicing.
Non-bank & fintech lenders
- How the line is built
- Shorter revolving windows, frequently re-drawn; each draw may amortise on its own short schedule rather than revolving indefinitely.
- Strongest on
- Speed, far lower revenue and time-in-business floors, and genuinely unsecured lines.
- Hardest
- Higher cost, smaller limits, and a “line” that behaves more like a series of short loans.
Marketplaces & brokers
- How the line is built
- Does not lend. Submits one application to several of the above and returns the offers.
- Strongest on
- Seeing which categories will actually approve you before applying to each separately.
- Hardest
- The eventual lender, not the marketplace, sets the terms.
The category decides the shape of the offer far more than the individual institution does. That is why comparing two quotes from the same category is usually a question of price, while comparing across categories is a question of structure — how long you can draw, whether each draw revolves or amortises, and what happens at renewal.
It is also why a limit you are quoted is not a limit you will keep. As covered above, a line is re-underwritten at renewal, and the size a lender is willing to carry moves with the business.
What a line of credit actually comes out at
Those three figures are worth holding against any offer. The headline limits advertised across this market run to $250,000 and beyond, but the median line an established small business is actually approved for is far smaller, and the flexibility that makes a line useful is paid for in both rate and rate risk. Revolving approvals were also secured 60.8% of the time against 88.9% for term debt — so lines are the more commonly unsecured product, which is precisely why they price higher.
Source: U.S. Small Business Administration, FOIA 7(a) FY2020–Present data file as of 30 June 2026 (SHA-256 6c1e9132…a8d4fe), analysed here by Fundur. Population: 7(a) approvals FY2020–FY2025 with gross approval above zero, excluding cancelled loans and exact duplicate rows — 302,484 loans, of which 82,685 are flagged revolving. SBA-guaranteed lines are bank-originated and are not the same product as a non-bank line; they are used here because they are the only large public record of approved line terms. Fundur is not an SBA lender. Figures describe past approvals and are not an offer or a prediction of your terms.
On “best” lists: Fundur does not publish rankings of line-of-credit lenders and does not name a best provider, because the right category depends on your revenue, your time in business and whether you have an asset to pledge — and the answer changes as those do. What a marketplace can do is put one application in front of several categories at once so the offers can be compared on limit, draw period, rate basis and fees side by side. What to look at in each of those is set out above. If you are deciding whether to go through an intermediary at all, what a business loan broker does — and how one is paid — is covered separately.
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.
Can a business under two years old get a line of credit?
Often, yes — if it is already trading. The two-year mark is a bank convention, not a market-wide rule, and the useful question is not how old the business is but what its bank account can already show.
Under two years is not the same as a startup
Two very different businesses get described as “new”. One has been operating for nine months, invoices customers, runs payroll and has revenue moving through a business account every week. The other has a plan, an entity and no revenue yet. Lenders treat these as different files, and so does Fundur: the financing in this marketplace is built around an operating business with revenue already moving through a business bank account. A business with no operating history has nothing for a line-of-credit underwriter to read, and Fundur does not place financing for a pre-revenue business. As this page sets out under Requirements, around six months of operating history is the typical starting point for a line, so the realistic window this section is about runs from roughly six months to two years.
What a lender can read in a younger business
A business that has traded for a year cannot show three years of tax returns, and on the routes that serve younger companies it is not asked to. What it can show is the file that actually carries the decision on a line: recent business revenue as deposits; how evenly those deposits arrive across the months available; the average daily balance the account holds; negative-balance days and returned items; existing obligations already drafting from the account; the owner’s personal credit, which carries more weight while the business has no credit history of its own; the industry; and simply how many months of this pattern exist. Six clean months read differently from eighteen, but both are readable. The bank-statement underwriting that light-file products use is, in practice, how most younger businesses are assessed.
Why the offer usually looks different
A younger business is not declined so much as sized and priced for what is known. Expect the differences the rest of this page has already described: a smaller starting limit, since limits scale with the profile; a shorter revolving window or a structure in which each draw amortises on its own schedule, which is how the non-bank lenders that serve this segment commonly build a line; more weight on the owner’s credit and on the banking than on the business’s own record; and pricing that reflects the shorter history. The categories with the highest time-in-business floors — large banks in particular — are the ones a business under two years old will find hardest, which is why the provider comparison above matters more for a young business than for an established one. None of this is fixed: a line is re-underwritten at renewal, and a limit set on nine months of history is reviewed against the business as it looks a year later.
When a line is not the right shape
A line suits a recurring or unpredictable need. If a younger business needs one fixed amount for a defined purpose — a build-out, a piece of equipment, a single order — and wants a predictable repayment schedule, a lump-sum product is usually the better fit even where a line is available: the term-loan and working-capital comparisons above set out where each belongs. Choosing the shape that matches the need is the decision that most improves a young business’s first offer.
Business line of credit requirements
Set your numbers and watch your fit update live. Here’s what lenders look for — and checking with Fundur won’t affect 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 with Fundur 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?
Can I get a business line of credit with less than two years in business?
Get a business line of credit today
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