Line of credit

Business Line of Credit

Flexible financing, there when you need it.

Funding amount: Up to $1M
Term: 6 months to 3 years
Cost: Starting at 4.5%
Funding speed: Within 1–2 days

A nursery owner among the season's beds.

Line of credit

What it is, plainly

A line of credit gives you access to a fixed amount of capital that you draw on only when you need it. Think of it as a financial safety net: it sits there costing nothing until the day it earns its keep.

When you do draw on it, you can use it for almost any business need, and you pay for what you use rather than for the whole facility.

The terms, in plain words

The words to read on a line of credit offer

Interest rate

The price of borrowing, stated as a yearly percentage of what you still owe. As the balance comes down, so does the interest.

AskIs this the APR, and are the fees counted in it?

Total payback

Every dollar you will hand over, from the first payment to the last: the amount, the cost and every fee. It is the one number that makes two different offers comparable.

AskWhat is the total, with every fee included?

Fixed or daily payments

A fixed payment is the same sum on the same date, usually monthly. Daily or weekly payments are drawn from your account on a set schedule. Some advances take a share of card sales instead, so the amount moves with the till.

AskHow often, how much, and what happens in a slow week?

Origination fee

A charge for setting the financing up, often a percentage of the amount. It is frequently taken out before the money reaches you, so what lands in the account is less than the headline.

AskIs it deducted from what I receive, and is it in the total payback?

These are general meanings. The agreement you are offered is what governs, so read its own definitions before you sign. All six terms.

What it gives you