Business line of credit: draw what you need, when you need it.
A revolving credit line you can draw against, repay and use again. Decisions in 24–48 hours, draws funded as fast as the same business day, and you pay only on the balance you actually use.
At a glance
- What it is
- A revolving loan from a third-party lender. Draw, repay, draw again.
- Limits
- $10,000 to $250,000+, set by revenue and credit*
- Cost
- Interest or a fee on the drawn balance only. Possible draw or maintenance fees.*
- Repayment
- Weekly or monthly, each draw over 6–24 months*
- Credit
- Typically 600+. Lower scores considered with strong revenue.
- Speed
- Decision in 24–48 hours; draws same or next business day once open*
Approved once. Capital on call.
A business line of credit works like a credit card without the card. A lender approves your business for a limit. You draw any amount up to that limit, by transfer to your business bank account, whenever you need it. You pay interest or a fee only on what you draw, for as long as it is outstanding, and as you repay, the credit becomes available again.
That makes it the right instrument for needs that repeat or cannot be scheduled: a slow month, a payroll that lands before a receivable, a supplier discount for paying early, a repair, an order larger than usual. Unlike a term loan or a merchant cash advance, you are not paying for capital you have not used yet. Weighing the three? Read our MCA vs term loan vs line of credit guide.
- Draw only what you need, when you need it, instead of one lump sum
- Pay interest or fees on the drawn balance, not the full limit
- Credit replenishes as you repay, so one approval covers many needs
- Draws deposited as fast as the same business day once the line is open
Line of credit vs. merchant cash advance
| Line of credit | Merchant cash advance | |
|---|---|---|
| Legal form | Revolving loan | Purchase of future receivables |
| Cost basis | Interest or fee on drawn balance | Fixed total on the full advance |
| Reusable | Yes, as you repay | No; each advance is a new contract |
| Repayment | Weekly or monthly, per draw | Daily or weekly, share of sales |
| Credit weight | Moderate: 600+ typical | Low: revenue first |
| Decision | 24–48 hours | 24–48 hours |
| Best for | Recurring or unpredictable needs | One-time need, thin credit, speed |
Five steps, and the last two repeat.
Apply online
Ten minutes. Basic business details plus your last 3–4 months of bank statements. No hard credit pull to see your options.*
Review
Lenders look at revenue, cash flow, average balances, time in business and credit to set a limit and pricing. Most decisions land in 24–48 hours.
Accept your limit
Your advisor shows each offer in plain dollars: limit, rate or fee, repayment term per draw, and any draw or maintenance fees.
Draw when needed
Request any amount up to your available credit online or through your advisor. Funds land in your business account the same or next business day.
Repay and reuse
Each draw is repaid on its own schedule. As balances come down, the credit becomes available again without a new application.
You pay for the draw, not the limit.
Line of credit pricing comes in two styles. Banks and some online lenders quote an interest rate on the outstanding balance. Many online lenders instead quote a simple fee for each draw, repaid in equal weekly or monthly installments over a set term. Either way, the undrawn portion of your limit costs nothing with most lenders.
Watch for three extras. A draw fee is a percentage charged each time you take funds. A maintenance fee is a flat monthly charge to keep the line open. An early repayment clause determines whether paying a draw off early saves you the remaining fee or not. Your advisor marks each of these in every offer.
Pricing improves with time in business, credit score, average balances and a clean history on prior financing. A line of credit is usually cheaper than a merchant cash advance for the same business, which is why we steer businesses that qualify toward it.
- Approved limit
- $100,000
- First draw
- $30,000
- Total repaid on that draw
- $34,500
Cost of the draw: $4,500 over a 12-month term, about 52 weekly payments of roughly $663.
The other $70,000: available but undrawn, so it costs nothing with most lenders.
Six months in: about $15,000 of the draw has been repaid, so available credit is back to roughly $85,000 without reapplying.
What to compare: the same $30,000 as a merchant cash advance would carry a fixed total cost set by the funder, and would not replenish once repaid.
Lenders want revenue, stability and a credit history they can read.
Each lender in our network sets its own criteria, and your advisor matches your file to the ones most likely to approve it at the best limit. These are the guidelines most of them share.
- 6–12+ months in business. Most lenders want a year; a few accept six months with strong deposits.
- $10,000+ in monthly revenue. Many lenders set the floor at $15,000–$20,000. Limits are usually a fraction of monthly revenue.
- A business bank account with consistent deposits and few negative days.
- A US or Canadian business in an eligible industry.
- Personal credit of 600 or higher for most lenders. Some consider the mid-500s with strong revenue, at smaller limits and higher pricing.
- Existing financing is reviewed. One open advance is usually fine. Several open advances usually point to Reverse Consolidation first.
What you’ll need
Have these ready and most files are decided within two business days.
- Last 3–4 months of business bank statements
- Government-issued photo ID for the owner
- Voided business check or bank letter
- For larger limits: most recent business tax return or year-to-date profit and loss
- Some lenders ask for a read-only bank or accounting connection in place of statements
What happens when the score is the problem.
A line of credit is a loan, and lenders weigh personal credit more heavily than merchant cash advance funders do. Below roughly 600, most line of credit lenders decline regardless of revenue. Between 600 and 650, expect a smaller limit, a shorter repayment term per draw and a higher rate or fee.
We will tell you this on the first call rather than running your file through lenders who will not approve it. If the score rules out a line today, the practical path is usually a merchant cash advance sized conservatively and paid as agreed. Six to twelve months of clean history is what lets us bring the same business back to line of credit lenders at a better limit and price. Our bad credit funding guide covers what each credit band typically qualifies for.
What improves your odds
- Three or more months without a negative balance or returned payment
- Monthly deposits above $20,000, consistently
- No more than one open advance, paid on schedule
- A clean record on any prior financing, including the one we placed
- Asking for a limit that fits your revenue rather than the maximum
Built for the needs you can’t schedule.
Recurring, uneven or unpredictable cash needs
A line of credit earns its keep when the need comes back. One approval covers a year of draws, and you pay only for the weeks the money is out.
- Approved line
- $100,000
- Business
- Wholesale distributor
- Time in business
- 3+ years
Challenge: inventory demand moved month to month, and the owner did not want to reapply for financing every time it did.
Solution: a revolving line of credit, drawn as inventory needs changed through the year and repaid out of sales.
Result: steady inventory levels, better terms with vendors who were now paid on time, and ongoing access to capital without a new application.
Flexible is not the same as free.
An advisor who only sells one product will always recommend it. Swyft Advance places four. Here is how we think about the choice.
- Choose a line of credit when the need recurs or cannot be predicted, you can qualify on credit, and you want to pay only for what you draw.
- Choose a merchant cash advance when the need is one-time and immediate, or credit or time in business rules out a line today.
- Choose equipment financing when the money buys a specific asset that will outlast the term.
- Choose Reverse Consolidation when you already carry two or more advances and the weekly payments are the problem.
Before you sign any line of credit
- Confirm that interest or fees apply to the drawn balance only, and whether there is a maintenance or inactivity fee.
- Know the draw fee, if any, and the repayment term and schedule for each draw.
- Ask whether early repayment of a draw reduces the fee or only the time.
- Understand when the lender can reduce, freeze or close the line, and how often the limit is reviewed.
- Ask whether the agreement includes a personal guarantee or a blanket lien on business assets. Most do.
Your Swyft advisor walks through each of these on every offer. If an offer does not make sense for the business, we say so.
Straight answers before you apply.
How is a business line of credit different from a merchant cash advance?
A line of credit is a loan from a lender: you are approved for a limit, draw against it when you need to, and pay interest or a fee only on the balance you draw. As you repay, the credit becomes available again. A merchant cash advance is a one-time purchase of a portion of your future receivables with a fixed total cost. Lines are usually cheaper and reusable but weigh credit more heavily. Advances are faster to qualify for with thin credit but cost more and do not revolve.
Can I get a business line of credit with bad credit?
It is harder than with a merchant cash advance, but not always impossible. Most lenders in our network want a personal credit score of 600 or higher. Some will consider the low-to-mid 500s when monthly revenue is strong and bank balances are stable, usually with a smaller limit and a higher rate. If your score rules out a line today, a merchant cash advance paid as agreed builds the history that lenders want to see, and many businesses move to a line of credit within six to twelve months. Approval is never guaranteed.
How fast can I draw funds?
Approval on a complete application typically takes 24–48 hours. Once the line is open, draws are requested online or through your advisor and are usually deposited the same business day or the next, depending on the lender and the time of the request.
What does a business line of credit cost?
You pay interest or a fee on the balance you draw, for as long as it is outstanding. Rates vary widely with credit, revenue and time in business, and online lenders often quote a simple fee per draw rather than an APR. Some lines also carry a draw fee or a monthly maintenance fee. Your advisor converts every offer into a total dollar cost for a sample draw so you can compare it with other offers and with a merchant cash advance.
Do I pay for the part of the line I don’t use?
With most lenders, no. Interest or fees apply only to the drawn balance. A minority charge a small maintenance or inactivity fee to keep the line open, and some reduce or close a line that goes unused for a long period. Ask before you sign and we will point it out in the agreement.
What documents do I need?
Your last 3–4 months of business bank statements, a government ID and a voided business check. Lenders offering larger limits may ask for your most recent business tax return, a year-to-date profit and loss, or a connection to your accounting software or bank account for a read-only review.
See your business line of credit options today.
Ten-minute application, no hard credit pull to check, a real advisor on every file.