Capital that’s there when you need it, costs nothing when you don’t.
A line of credit is a revolving facility — an approved limit you can draw against on demand, repay, and draw against again. You only pay interest on what you’ve actually drawn.
What is a business line of credit?
A business line of credit is a revolving credit facility: a lender approves a maximum limit — commonly $10,000 to $500,000 — and the business draws against it on demand, repays, and draws again. Interest accrues only on the balance actually drawn, so an open line that isn’t being used costs little or nothing to hold. As principal is repaid the available limit replenishes, which is the essential difference from a term loan: a term loan is one lump sum on a fixed amortization schedule, while a line is a reusable ceiling you manage over months and years. Secure Capital Solutions is a broker, not a lender — the line is originated, underwritten, and funded by an independent Lender Partner.
How it works
The lender approves a credit limit between $10,000 and $500,000 based on your file. Once it’s open, you can transfer funds out of the line into your business checking account whenever you need them. Interest accrues only on the drawn balance — if you’re not using it, you’re not paying for it. You make minimum monthly payments against the balance; as you pay it down, the available limit replenishes.
When a line of credit fits
- Seasonal businesses. Restaurants, landscapers, retailers with quarterly swings — draw to bridge slow months, repay when business picks up.
- Carrying receivables. If you regularly wait 30, 60, 90 days for B2B customers to pay, a line covers payroll and supplier costs in the gap.
- Smoothing payroll. Bi-weekly payroll on a monthly invoicing cycle creates predictable strain. A line absorbs it.
- Opportunistic spending. A bulk-buy discount on inventory, an unexpected rental opportunity, an emergency repair — the line is already open and ready.
What it’s not great for
If you have one specific outlay in mind and you know exactly how long you need to repay it, a term loan usually costs less. Lines tend to carry higher rates than term loans because the lender is reserving capital you may or may not draw. If you have heavy seasonal AR, invoice factoring may be cheaper than carrying a line balance.
What the lender will look at
Lines tend to underwrite faster than term loans because the funds aren’t fully deployed at issuance. Most lenders are looking at deposit volume (last 3 months), time in business (typically 12+ months), and owner credit. Some products are stated-income; others want full bookkeeping. We know which lenders are flexible on what.
Estimate monthly interest on a drawn balance
For illustration only — not an offer of credit. Lines of credit typically also carry a minimum principal payment. Actual rate, draw fees, and minimum payment are determined by the lender after underwriting. Formal disclosures, including any state-required disclosures, will accompany any written offer.
What a line actually costs
The number that matters is not the limit — it’s the average balance you carry and how long you carry it. A large limit you rarely touch is cheap. A small limit you keep maxed out is not.
Worked example
Illustrative only — not an offer of credit. Lines typically also carry a minimum principal payment, and some carry a draw or maintenance fee. Actual rate, fees, and minimum payment are set by the Lender Partner after underwriting. Formal disclosures, including any state-required disclosures, will accompany any written offer.
What you’ll need to apply
Lines underwrite off recent deposit behavior more than off historical financials, so the document list is short.
- Three months of business bank statements. All operating accounts, as bank-generated PDFs.
- Time in business. Most lenders want 12 months or more; a few will look at six with strong deposits.
- Basic entity details. Legal name, EIN, entity type, and state of formation.
- Photo ID for each owner holding 20% or more.
- A rough sense of how you’ll use it. Payroll smoothing, inventory buys, and AR carrying all underwrite differently.
- Existing debt and any other open lines. Lenders will find them on the statements anyway; listing them up front avoids a re-underwrite.