A business line of credit is a revolving credit facility: a lender approves a maximum limit, and you draw, repay, and redraw as needed — paying interest only on the balance you've actually drawn, not the full limit. It's built for recurring or unpredictable working-capital needs, where a term loan's one-time lump sum doesn't fit.
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 one lender partner whose line terms fit.
A term loan gives a lump sum upfront repaid on a fixed schedule; a line of credit is revolving — you draw, repay, and redraw up to a limit and pay interest only on what you've drawn. Lines fit recurring or unpredictable working-capital needs; term loans fit a single defined investment.
No — only on the amount you've actually drawn. An unused limit costs nothing in interest (though some lenders charge a small maintenance or draw fee). That's the core advantage of a line for cash-flow flexibility.
Both exist. Secured lines are backed by collateral (receivables, inventory, or a blanket lien) and may carry higher limits or lower rates; unsecured lines lean more on credit and cash flow. Many non-bank lines are unsecured but priced higher than bank lines.