A business line of credit, explained plainly.
A line of credit is a pool of funds you can draw from as needs come up and repay as cash comes in. It suits costs that recur or arrive unevenly: inventory, payroll between invoices, a slow month.
Full Port Financial is not a lender. Financing is provided by third-party funding partners.
What lines of credit is
A lender approves a maximum credit limit. You draw what you need, when you need it, and you generally pay interest only on the amount you have drawn. As you repay, the available balance is restored, so the line can be used again during its term.
Lines of credit are offered by banks and online lenders. Some are secured by assets such as receivables or inventory; others are unsecured and rely on your revenue and credit history. Full Port Financial is not a lender; we help you understand whether a line fits your situation and connect you with funding partners.
Often used for
- Evening out seasonal or uneven cash flow
- Covering payroll while customers pay invoices
- Restocking inventory as it sells
- Having a cushion for repairs and surprises
- Taking advantage of supplier discounts
- Short-term needs you can repay quickly
The terms that matter
Draw part or all of your limit, often by transfer to your business account.
Each draw is repaid on a schedule set by the lender, commonly weekly or monthly.
Interest on what you draw, plus possible draw, maintenance or annual fees. Ask for all of them in writing.
Many lines are reviewed periodically, and the limit can be raised, lowered or closed.
What funding partners usually look at
Every funding partner sets its own requirements. These are the factors that come up most often.
- Consistent monthly revenue and healthy account balances
- Time in business
- Personal and business credit history
- How your existing debt payments compare with your cash flow
- For secured lines, the value of the receivables or inventory behind it
- A clean recent banking history without frequent overdrafts
What to have ready
You don't need these to make the first call. Having them ready later speeds things up.
- Three to four recent months of business bank statements
- A government-issued photo ID for each owner
- A voided business check or bank letter
- Basic business details: legal name, entity type, EIN and start date
- An accounts receivable aging report, for lines secured by receivables
Understanding what it really costs
Because you pay interest only on what you draw, a line of credit can cost less than a term loan for short, repeated needs. Fees can change the picture: some lines charge a fee on every draw, a monthly maintenance fee or an annual fee even when the line is unused.
Ask for the rate, every fee and the repayment schedule for a typical draw, then compare the total cost with the other options your advisor shows you.
From first call to funded in three steps.
Tell us about your business
Your industry, your revenue and what the money is for. A few minutes on the phone with a funding advisor.
Compare your options
See options from funding partners that fit your profile, side by side, with your advisor walking you through them.
Get funded
Choose the offer that works for you, sign with the funding partner, and receive your funds.
Questions, answered.
When is a line of credit better than a term loan?
When the need recurs or the timing and amount are uncertain, such as inventory, payroll gaps or seasonal slowdowns. For a single large purchase with a clear payback period, a term loan is often a better fit.
Do I pay interest on the whole credit limit?
Generally no. You pay interest on the amount you have drawn. Some lines also charge draw, maintenance or annual fees, so ask for the full fee list.
Is a business line of credit secured or unsecured?
Either. Secured lines are backed by assets such as receivables or inventory. Unsecured lines rely on your revenue and credit and usually require a personal guarantee.
Will checking my options affect my credit?
Talking with Full Port Financial does not affect your credit, because we do not pull credit reports. A funding partner may review your credit later as part of its own review, with your permission.
Can my credit limit change?
Yes. Many lenders review lines periodically and may raise, lower or close the line based on your business's performance and the terms of your agreement.
Does Full Port Financial charge a fee?
No. Full Port Financial does not charge applicants a fee to apply or to talk with an advisor. When a funding partner funds a business we introduced, the partner may pay us a commission.
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Your money is one call away.
Tell us about your business and what the money is for. An advisor will walk you through the options that may fit, with no pressure and no obligation.