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Line of Credit for Small Business

Dated October 14, 2026

A line of credit for small business is flexible financing that lets you draw money up to a set limit, repay it, and draw again. You only owe on what you actually use, which makes it a good fit for uneven cash flow rather than a single large purchase.

How a business line of credit works

• The lender approves a credit limit.
• You draw funds when you need them.
• You repay what you've drawn, and that amount becomes available again.
• Some lines are revolving with no end date, and others need to be renewed periodically.

Common uses

• Covering gaps while customers pay invoices
• Buying inventory ahead of a busy season
• Handling unexpected repairs or expenses
• Smoothing payroll in slower months

Secured vs. unsecured lines

• Secured. It's backed by collateral such as receivables, inventory, or equipment.
• Unsecured. No specific asset backs it, though the lender may ask for a personal guarantee.

What lenders typically look at

• Time in business
• Revenue and cash flow
• Business and personal credit
• Recent bank statements
• Existing debt

If a bank line of credit is out of reach

A bank line of credit leans on time in business, credit, and often collateral. If your business has steady deposits but a bank line is not available, Fundseta’s Path A is revenue-based working capital sized from your average monthly deposits (about $35,000 or more, with a credit band around 550+) instead of collateral. It can cover many of the same gaps, such as slow-paying customers, inventory ahead of a busy season, repairs, and payroll. Path A is not a bank line of credit, and amounts, terms, and approval are set by the provider. If you are in the U.S. and have strong personal credit (700+), the credit-based option, Path B (U.S. only), may also fit. See which path fits.

See what fits your business