A revolving credit facility gives your business flexible access to capital. Draw funds, repay, and draw again — only pay interest on what you use.
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Unlike a term loan, a line of credit is revolving — draw what you need, when you need it, and only pay interest on the amount drawn.
Lenders approve you for a maximum credit limit based on your revenue, credit, and time in business.
Draw any amount up to your limit at any time — directly to your bank account, often within 24 hours. Only pay interest on what you draw.
As you repay, your available credit replenishes. It's a permanent financial tool — not a one-time loan.
Best for recurring or unpredictable needs — not large one-time purchases (that's what term loans are for).
Stock up before peak season without tying up cash. Draw, buy inventory, repay from sales, repeat.
Bridge the gap between when you pay employees and when clients pay you. Keep operations smooth.
Equipment breaks down, a key client delays payment — a line of credit means you're never caught off guard.
A new contract comes in and you need to staff up fast. Draw from your line and repay when the project pays out.
Both are great tools — the right one depends on what you need the money for.
| Feature | Line of Credit | Term Loan |
|---|---|---|
| Best For | Recurring / unpredictable needs | Large one-time purchases |
| How You Receive Funds | Draw as needed, up to your limit | Lump sum upfront |
| Interest | Only on amount drawn | On full loan balance |
| Repayment | Flexible, revolving | Fixed monthly payments |
| Reusability | Yes — draw, repay, draw again | No — one-time use |
| Typical Amount | $10K – $250K | $10K – $5M |
Most lenders require a minimum personal credit score of 600–620. Some alternative lenders go as low as 550 for smaller limits. A higher score (680+) will get you better rates and higher limits.
Both options exist. Unsecured lines (no collateral required) are available up to around $100K. Secured lines — backed by business assets — can go higher and often come with lower interest rates.
Once your line of credit is established, most lenders allow same-day or next-day draws directly to your bank account. The initial approval process typically takes 1–3 business days.
Yes — completely free for borrowers. Releafly is compensated by lenders when a loan is funded. You never pay us anything.
