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Business lines of credit

A lender sets a limit, you draw what you need when you need it, and you pay interest only on what you've drawn. As you repay, the limit frees up again.

At a glance

Typical amount
$10,000 to $250,000
Time to funds
Often 1–2 weeks
What lenders look at
Six or more months of bank statements, monthly revenue and credit.
How it's repaid
Draw what you need up to the limit and pay interest on what you've drawn. Repaying frees the limit up again.

Ranges vary by lender and are not offers.

When it fits

  • Your cash flow is uneven: seasonal inventory, slow-paying customers, a gap before a big job pays.
  • You want money available without paying for it until you use it.
  • You have six months or more of steady bank deposits.

When it doesn't

  • You need a large, one-time amount for a project. A term loan usually costs less for that.
  • You're buying equipment. Equipment financing uses the equipment as collateral and is often easier to get.
  • You'd use it to cover ongoing losses rather than timing gaps.

What lenders check

  • Bank statements. Six months or more is common. Lenders look at average balance, deposits and overdrafts.
  • Revenue. Many lenders set a minimum monthly or annual revenue.
  • Time in business. Often six months to two years, depending on the lender.
  • Credit. Personal credit for newer businesses, and business credit where it exists.
  • Collateral. Secured lines are backed by business assets such as receivables or inventory. Unsecured lines usually still require a personal guarantee.

What it costs

You pay interest on the amount you've drawn, often at a variable rate. Some lines also charge a draw fee, an annual or maintenance fee, or a fee for an unused balance. Many lines are reviewed each year and can be reduced or closed by the lender.

Ask for every fee in writing and compare lines by what you'd pay at the amount you actually expect to use.

What to have ready

  • Business bank statements. The last three to six months. Nearly every lender asks for these first.
  • Tax returns. Two years of business and personal returns, mainly for SBA and term loans. Some lenders ask for more.
  • Profit and loss statement and balance sheet. Year to date is usually enough. Your bookkeeping software can export both.
  • Formation documents and EIN. Articles of organization or incorporation, plus your IRS EIN letter.
  • ID for each owner with 20% or more. A driver's license or passport. Lenders verify everyone with a significant stake.
  • Debt schedule. A list of current business loans and advances, with balances and payments.

Documents checklist by financing type

Related guides

Sources

Last reviewed October 14, 2026.

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