Line of Credit
Business Line of Credit
Revolving capital you can draw on demand.
A business line of credit gives you ongoing access to funds up to a set limit — draw what you need, pay interest only on what you use, and the credit replenishes as you repay. Simply Approved Business Loans offers revolving lines from $10,000 to $1,000,000 with same-week approval.
Best for
- Managing cash flow gaps
- Covering payroll between receivables
- Stocking up on inventory
- Handling unexpected expenses
Key features
- Pay interest only on what you draw
- Funds replenish as you repay
- No prepayment penalty
- Draw as often as needed
- Build business credit history
How Line of Credit works
A line of credit (LOC) is a revolving facility — like a business credit card but with cash drawdowns. You're approved for a maximum limit, draw funds when needed, and pay interest only on the outstanding balance.
As you repay, the credit becomes available to draw again. Most LOCs require monthly minimum payments (interest plus a small principal portion) and can be drawn via online dashboard, ACH transfer, or check.
LOCs are ideal for recurring cash-flow gaps — payroll between client invoices, seasonal inventory, unexpected repairs — where you want capital available but don't want to pay for it sitting unused.
Qualifications
| Time in business | 12+ months |
| Min monthly revenue | $15,000 |
| Min FICO | 625 |
| Documents | Application + 3 months bank statements |
Pros
- Pay interest only on drawn balance
- Replenishes as you repay
- Lower effective cost than MCA or term loan
- No prepayment penalty
- Builds business credit
Cons
- •May charge inactivity, draw, or maintenance fees
- •Credit limit may be reduced if business performance drops
- •Personal guarantee typically required
- •Slower to fund first draw than MCA
Common mistakes to avoid
- Maxing out the LOC and treating it like a term loan
LOCs are best at 50–70% utilization. A maxed line signals stress to underwriters and can trigger reductions or callbacks.
- Skipping the LOC because you don't need it today
Set up an LOC before you need it. Approval is faster and pricing better when the business is healthy, not when cash is tight.
- Ignoring fee structure
Watch for draw fees (1–3% per draw), inactivity fees, and annual renewals. They can quietly add 200–400 bps to effective cost.
Real-world scenarios
A 25-person digital agency uses a $150k revolving LOC to bridge bi-weekly payroll between client AR cycles. Average utilization 40%, average draw repaid in 30–45 days.
A residential remodeler uses an $80k LOC to fund materials and labor between progress draws on each job, drawing 2–4 times per project.
When another product is a better fit
- Merchant Cash Advance →
If you need funding as fast as 24 hours (subject to approval) and have weaker credit.
- Business Term Loan →
If you have a one-time large expense, not recurring needs.
- Invoice Factoring →
If your cash gap is specifically B2B receivables.
How to apply
- 01
Submit application with EIN/SSN
- 02
Provide 3 months of bank statements
- 03
Receive credit limit decision
- 04
Draw funds anytime via dashboard
Estimate your Line of Credit payment
Adjust the numbers to see an estimated payment and total cost. Estimates only — final terms depend on underwriting.
Business line of credit calculator
What a revolving facility actually costs once interest, draw fees and maintenance fees are added together.
Methodology and limitations
Interest = drawn balance × (APR ÷ 12) × months outstanding, which assumes the balance is carried rather than amortised down; a facility you pay down steadily will cost less than shown. Draw fees = drawn amount × fee % × number of draws. The effective annual cost annualises total cost against the amount actually used, so short holds of a fee-heavy facility look expensive — that is accurate, not a rounding artefact. This model excludes non-utilisation fees charged on the undrawn portion and any per-transaction ACH cost. Figures are estimates for comparison only, not an offer; final pricing is set by the funding provider after underwriting.
Line of Credit vs. other funding options
Side-by-side comparison of Line of Credit against the most common alternatives. Use this to decide which structure fits your business stage, cash flow, and use of funds.
| Product | Amount | Term | Speed | Best for |
|---|---|---|---|---|
| Line of Credit This page | $10,000 – $1,000,000 | Revolving | Approved in 1–3 days | Managing cash flow gaps |
| Working Capital → | $5,000 – $1,000,000 | 3 – 24 months | Funding as fast as 24 hours (subject to approval) | Bridging seasonal slow periods |
| MCA → | $5,000 – $2,000,000 | 3 – 18 months | Funding as fast as 24 hours (subject to approval) | Restaurants & retail with daily card sales |
| Term Loan → | $25,000 – $5,000,000 | 1 – 5 years | Funded in 2–7 days | Expansion, renovations, or buildouts |
FAQs about Line of Credit
A business line of credit is a revolving facility — you're approved for a maximum limit, draw funds as needed, and pay interest only on the outstanding balance. As you repay, the credit becomes available to draw again.
Lead-gen pre-check
See if you qualify for Line of Credit
$10,000 – $1,000,000 · Approved in 1–3 days. Pre-qualification is free and doesn't affect your credit.
Free pre-check
Eligibility checker
Pre-qualification uses the details you provide and does not run a credit check. A credit inquiry only happens after you start a full application, and the inquiry type is disclosed before you sign.
Underwriting disclaimer: The eligibility checker is a self-reported pre-qualification tool. It does not constitute an offer of credit or a guarantee of approval. Every funded file goes through full underwriting — including bank statement analysis, business verification, and a credit inquiry whose type (soft or hard) is disclosed before you sign. Final terms, rates, and amounts depend on underwriting and the specific lender or program.
Business funding in as little as 24 hours
Ready to see what you qualify for?
Free to apply. No upfront fees. Available to qualified applicants with a complete file; timing varies by funding provider.
Related products
Working Capital Loans
Cover payroll, inventory, and day-to-day expenses
- Amount
- $5,000 – $1,000,000
- Speed
- Funding as fast as 24 hours (subject to approval)
Merchant Cash Advance
Fast capital based on future receivables
- Amount
- $5,000 – $2,000,000
- Speed
- Funding as fast as 24 hours (subject to approval)
Business Term Loan
Fixed-rate financing for major investments
- Amount
- $25,000 – $5,000,000
- Speed
- Funded in 2–7 days
Line of Credit by state
State-specific underwriting notes and scenarios for Line of Credit borrowers.
- Line of Credit in New York4-month statements
- Line of Credit in California4-month statements
- Line of Credit in Texas3-month statements
- Line of Credit in Florida3-month statements
- Line of Credit in Illinois3-month statements
- Line of Credit in Georgia3-month statements
- Line of Credit in Pennsylvania3-month statements
- Line of Credit in Ohio3-month statements
- Line of Credit in Arizona3-month statements
- Line of Credit in Massachusetts3-month statements
- Line of Credit in Washington3-month statements
- Line of Credit in Michigan3-month statements
- Line of Credit in North Carolina3-month statements
- Line of Credit in Virginia3-month statements
- Line of Credit in New Jersey3-month statements
- Line of Credit in Colorado3-month statements
- Line of Credit in Nevada3-month statements
- Line of Credit in Tennessee3-month statements
- Line of Credit in Oregon3-month statements
- Line of Credit in Indiana3-month statements
- Line of Credit in Minnesota3-month statements
- Line of Credit in Missouri3-month statements
- Line of Credit in Louisiana3-month statements
Industries that use Line of Credit
See how Line of Credit fits the cash-flow needs of each industry participating funding providers fund.
- Restaurants & Food ServiceLine of Credit & more →
- Construction & ContractorsLine of Credit & more →
- Retail Store FinancingLine of Credit & more →
- Medical & Dental PracticesLine of Credit & more →
- E-commerce & Online SellersLine of Credit & more →
- ManufacturingLine of Credit & more →
- Professional ServicesLine of Credit & more →
Related Line of Credit Guides
LOC Credit Reporting Depends on Provider Policy
A business line of credit may affect business or personal credit. Separate application inquiries, routine reporting, and missed-payment reporting before signing.
7 min read
Retail Business Line of Credit: Uses, Costs and Fit
Match retail inventory spending to repayment capacity, compare line-of-credit costs, and prepare a clearer funding request.
9 min read
Business Line of Credit Reporting: Where It May Appear
A business line of credit may report differently to business and personal credit files. Confirm what gets reported as you borrow, repay, and borrow again.
7 min read
Get funded in as little as 24 hours
$5,000 to $25,000,000. Free pre-qualification. No upfront fees. Same-day decisions for clean files.