A business line of credit is a flexible business loan that allows you to borrow up to a certain amount or credit limit, to cover short-term working capital requirements.

 

When you get a business line of credit, you're approved to borrow up to a certain amount of money and you’re able to access some, or all of that money as you need it. After you fully pay off a portion you’ve used, the full amount of your line of credit is available for you to use again.

 

Although business lines of credit do operate very similarly to a credit card, they are not the same thing. Credit cards typically have higher interest rates and in many cases, a line of credit does not have a mandatory monthly payment system.

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Unlike a term loan, a business line of credit allows you to run your business without having to apply for a new loan every time you need extra cash. And with ongoing access to working capital, you can plan for and better manage your future cash flow.