Line of Credit
A business line of credit gives you revolving access to capital, only paying interest on what you draw. The most flexible funding tool for managing cash flow, covering unexpected expenses, or seizing time-sensitive opportunities.
What You Need to Know
A business line of credit works like a credit card for your business, you're approved for a maximum amount (typically $10,000 to $250,000), and you draw funds only when you need them, paying interest only on what you've used. Once you repay, the credit becomes available again, creating a revolving safety net for your business. Interest rates range from 4.8% to 24% APR depending on the provider, your credit profile, and time in business. The best rates (under 10%) go to borrowers with 680+ credit scores, 2+ years in business, and strong revenue. However, some providers like Fundbox work with businesses as young as 3 months old with 600+ credit scores. There are generally no fees for maintaining an open line, you only pay when you draw. Most providers charge either a monthly interest rate or a draw fee (1-2% per draw). Repayment terms are typically 12-24 weeks for each draw. Lines of credit are the most versatile funding tool available: use them to cover payroll gaps, purchase inventory for a big order, handle seasonal fluctuations, or jump on time-sensitive opportunities. Unlike term loans, you don't need to justify the use of funds upfront, and unlike MCAs, the revolving structure means you always have backup capital available.