Revolving lines secured and unsecured, how they are sized, what they cost to keep open and when a line beats a term loan.
A business line of credit is a revolving limit the business draws on when it needs cash and repays as cash comes in, paying interest only on what is drawn. Banks commonly secure lines with receivables and inventory and renew them annually against updated financials. Non-bank lenders offer unsecured lines sized to revenue and deposits, often with shorter draw periods and each draw repaid over a set term.
A line is the right tool for gaps that repeat: seasonal inventory, payroll ahead of collections, or a contractor's mobilization costs. It is the wrong tool for a one-time purchase that takes years to pay back. These guides explain how lines are sized, what renewal and covenants mean, what a line costs to keep open, and how to choose between a line and a term loan.
Guides
Farm and Ranch Loans: Operating Lines, Equipment and Land Financing — Farm loans are usually three structures at once: an annual operating line for inputs, equipment loans or leases, and long-term land and facility financing. Who writes each one, what they weigh and what to bring.
Marketing Agency Business Loans: Funding Payroll, Media Spend and Growth — Marketing agency business loans are widely available: lines of credit, unsecured term loans, receivables financing and SBA 7(a) for acquisitions. Lenders underwrite retainers, concentration and margin, not collateral.
Catering Business Loans: Kitchens, Vehicles and Deposit-Driven Cash Flow — Catering business loans come from equipment and vehicle lenders, working-capital lines that bridge the deposit and the balance, factors that buy corporate invoices, and SBA lenders for a commissary or an acquisition.
Home Health Care Business Loans: Payroll, Licensing and Growth Capital — Home health care business loans come from working-capital lenders, healthcare receivables lenders, SBA 7(a) lenders and banks, and most of the capital carries payroll between the visit and the payer's payment.
Pharmacy Business Loans: Financing an Independent Pharmacy — Pharmacy business loans come from SBA 7(a) lenders, banks, working-capital and receivables lenders and equipment lenders. Lenders underwrite script volume, margin and the reimbursement cycle, not hard collateral.
Seasonal Business Loans: Financing Through the Off-Season — A seasonal business can borrow: lines of credit drawn before the season, equipment loans that skip the winter, inventory financing timed to the build-up and SBA loans with seasonal schedules. The file has to show the whole year.
E-commerce Business Loans: Inventory, Ad Spend and Growth Capital — E-commerce brands are funded on their numbers, not their assets: inventory and purchase order financing, revenue-based capital, lines of credit, platform programs and SBA loans. What each funds and what lenders check.
Construction Equipment Financing: Excavators, Cranes, Trucks and Fleets — Construction equipment financing covers nearly every machine a contractor runs, new or used, through loans, leases and dealer programs, and it is usually the easiest contractor credit to place because the machine is the collateral.
Why Banks Decline Contractors, and What Lenders Need to See — Banks decline contractors because the file cannot answer whether the jobs are profitable, when the draws arrive and what is held in retainage. A work-in-progress schedule, a backlog report and a retainage-separated aging can.
Construction Business Loans: Financing Contractors Between Draws — Construction business loans fund the gap between the contractor's costs and the owner's draw: lines of credit, mobilization funding, equipment financing, factoring and SBA-backed loans. Who writes each one, and what the file needs.
Buy Here Pay Here Dealer Funding: Portfolio Lines and Growth Capital — A buy here pay here dealer is funded in two places at once: the inventory on the lot and the portfolio of contracts on the cars it sold. Portfolio lines, bulk sales of paper, reserves and the compliance signals lenders check first.
Floor Plan Financing Explained: How Dealers Finance Inventory — Floor plan financing is a revolving line that advances against each vehicle a dealer buys, holds the title, charges interest and per-unit fees, and is repaid within days of the retail sale. How curtailments, audits and costs work.
Used Car Dealer Business Loans: Floor Plans, Working Capital and Real Estate — Used car dealers finance inventory with floor plan lines, the lot with commercial real estate loans and operations with working capital, but many online lenders decline dealers outright. Who still writes them, and what the file needs.
Working Capital for Trucking Companies: Fuel, Repairs, Insurance and Growth — Working capital for a trucking company is a timing problem: fuel, drivers, repairs and insurance are paid weeks before the broker pays. Fuel cards, factoring, repair financing, premium financing and lines each close a different gap.
Startup Business Credit, the Personal Guaranty and the First Line of Credit — A startup business line of credit is approved on the owner's personal credit and signed with a personal guaranty. Building the entity, the bank account and the trade lines in order is what grows the line and later removes the guaranty.
Tour Operator Financing: Vehicles, Vessels, Deposits and Seasonality — Tour operators are financed first on their titled assets: motorcoaches, vans and vessels. Seasonal lines, revenue-based capital and SBA loans fill the off-season, and lenders read deposits, insurance and forward bookings.
Travel Agency Business Loans: Financing in a Deposit-Driven Industry — Travel agencies are funded mostly on the owner's credit and the agency's deposits: unsecured lines, revenue-based financing, commission receivables and equipment financing. Banks hesitate over deposits and refunds.
Funding an MLM or Direct Sales Company: What Lenders Need to See — An MLM or direct sales company is funded on evidence of retail sales to real customers outside the network. Inventory lines, fulfillment financing and receivables capital exist; recruiting-driven revenue does not get funded.
Call Center Business Loans: Funding Seats, Technology and Payroll — Call centers are funded mostly against their client contracts: receivables financing, payroll funding, equipment and technology leasing, and lines of credit for established operators. Here is what each lender underwrites.
Starting a Staffing Agency: Funding the First Payrolls — A new staffing agency can fund its first payrolls from its first signed contract: payroll funding underwrites the client, the owner's credit covers setup and insurance, and a bank line comes later. What to have in place first.
Staffing Agency Financing: Payroll Funding, Factoring and Lines of Credit — Staffing agency financing closes the gap between a weekly payroll and a receivable that pays in 30 to 60 days: payroll funding and factoring first, an asset-based line as the agency grows, a bank line once it matures.
Law Firm Lines of Credit: Case Costs, Payroll and Growth — A law firm line of credit is sized from trailing collected fees, eligible receivables and, for contingency firms, case inventory. What it should and should not fund, the covenants, and how bank and specialty lines differ.
Law Firm Financing: Every Option for Growing a Practice — Law firm financing spans bank and specialty lines, term loans, case-cost lines, post-settlement fee advances, portfolio loans, SBA 7(a) and real estate debt. Which fits your practice, and how placement works.
Working Capital for Bail Bond Agencies: Build-Up Funds, Collateral and Lines — Bail bond agencies run short of working capital because build-up fund contributions, forfeiture reserves and premium payment plans trap cash. The lines and term loans that bridge it, and how to present the surety relationship.
Debt Buyer Financing: Funding Charged-Off Portfolio Purchases — Debt buyers fund portfolio purchases with specialty lines sized on modeled collections, capital partners who share the recoveries, and forward-flow commitments, not bank loans. What lenders model and the data to bring.
Credit Repair Business Funding: Why Lenders Hesitate and What Works — Credit repair businesses can be funded, but the Credit Repair Organizations Act, the Telemarketing Sales Rule and chargeback exposure decide which lenders will look. The compliance evidence and billing model that change the answer.
Collection Agency Business Loans: Funding Growth in a Restricted Industry — A collection agency can get a business loan, mostly from lenders outside the banks: commission-stream facilities, working capital lines, term loans and equipment financing, each underwritten against the compliance file.
Why Banks Won't Fund Payday and Title Lenders, and Where Capital Comes From — Banks will not fund payday and title lenders on regulatory and reputational policy, and the SBA excludes lending businesses. Capital comes from lender-finance firms, private credit and private investors underwriting the portfolio.
Financing for Gold Buyers, Coin Dealers and Precious Metals Dealers — Gold buyers, coin dealers and bullion dealers are financed by asset-based lenders against inventory marked to spot, by refiner advances and by equipment lenders, with hedging and a written AML program expected before any line is sized.
Pawn Shop Business Loans: Loan Book Financing, Inventory and Growth Capital — A pawn shop can be financed, mostly outside banks: asset-based lines against the loan book and forfeited inventory, real estate and equipment loans, unsecured credit on the owner, and SBA only where merchandise sales outweigh interest.
Check Cashing Business Loans: Funding a Money Services Business — Check cashing business loans exist, but from a short list: a cash-secured line at the store's own bank, real estate and equipment lenders, and non-bank working capital funders. What each funds and the file they ask for.
Working Capital and Banking for a Crypto Business: What Lenders Need to See — A crypto business gets a bank account and working capital by showing both the same operating file: a compliance program, a fiat on-ramp, treasury held apart from operations and revenue in dollars. The products and how each works.
Unsecured Business Loans: What No Collateral Really Means and Who Qualifies — Unsecured business loans skip specific collateral but almost always require a personal guarantee, and many lenders file a blanket UCC lien anyway. Here is what underwriting looks at instead, which products fit, and how to strengthen a file.
Working Interest Financing: Funding Your Share of Drilling and Completion Costs — Working interest financing funds your share of drilling, completion and operating costs under a joint operating agreement. Here is how AFEs and cash calls work, why lenders treat a working interest differently from reserves, and which structures fit.
Working Capital for Small Businesses: Know Your Options — A practical breakdown of business lines of credit, short-term loans, invoice factoring, and revenue-based financing, matched to the cash-flow gap each one solves.
What is the difference between a line of credit and a term loan?
A term loan delivers a lump sum repaid on a fixed schedule, which suits a one-time purchase or project. A line of credit is a revolving limit drawn and repaid as needed, which suits recurring gaps between paying bills and collecting revenue. Many businesses use both for different purposes.
Can a new business get a line of credit?
Some can, but most lenders want a period of operating history and deposits before they extend a revolving limit. A young business with strong owner credit may qualify for a smaller unsecured line, and secured lines become available as receivables and financial statements build up.
Does a business line of credit need collateral?
Bank lines commonly take a lien on receivables and inventory, sometimes with a borrowing base that limits draws to a share of eligible collateral. Many non-bank lines are unsecured apart from a general business lien and a personal guaranty, sized instead to revenue, deposits and credit.