How Does a Business Line of Credit Work?
A business line of credit gives you a set limit you can draw from whenever you need it. You pay only on the amount drawn, and repaid funds become available to use again.
Draws, repayment, and revolving access
After approval you can draw part or all of the limit. Each draw is repaid on a schedule, often weekly or monthly, and as you repay, your available credit replenishes.
Common uses
Covering payroll between receivables, buying inventory ahead of busy seasons, handling unexpected repairs, or bridging slow months.
Qualification
Lenders typically look for steady revenue, at least 6–12 months in business, and fair credit. Limits are generally tied to monthly revenue.
Line of credit vs. lump-sum funding
Choose a line of credit for recurring or unpredictable needs. Choose a term loan or advance for one defined purchase where you need the whole amount at once.
This article is general education, not financial or legal advice. Terms vary by product and business.