Business Line of Credit

Unlike a term loan (a lump sum repaid on a fixed schedule), a line of credit revolves: as you repay what you've drawn, that credit becomes available again without reapplying. You pay interest only on the drawn balance, so an unused limit costs nothing — which is what makes it the right tool for cash-flow timing gaps (payroll before receivables land, inventory ahead of a busy season, bridging slow months).

Secured vs unsecured: some lines are secured by collateral (receivables, inventory, or a blanket lien), which can mean a higher limit or lower rate; unsecured lines rely more on credit and cash flow. Bank lines carry lower rates (often 8–18% APR for established businesses) but slower approval and stricter criteria; non-bank lines fund faster with lighter documentation at higher rates (commonly 14–28%+). Lines are typically re-underwritten at annual renewal, so approval isn't permanent.

Qualification generally looks at personal/business credit, time in business (often 12+ months), and consistent revenue. The SBA's CAPLines program (https://www.sba.gov/funding-programs/loans) offers government-backed lines for working-capital and seasonal needs, and the CFPB (https://www.consumerfinance.gov/) publishes guidance on comparing the total cost of business credit. The Federal Reserve's Small Business Credit Survey (https://www.fedsmallbusiness.org/) consistently finds lines of credit among the most-used financing products for managing operating cash flow.

A line of credit fits recurring/flexible needs; for a single defined investment (equipment, a buildout, an acquisition) a term loan usually costs less. ClearValue Lending evaluates your file and routes it to the funding partner(s) whose line terms best fit your file.