Similar to a credit card, a business line of credit makes funds available to your business with a credit limit. The limit can be anywhere between $1,000 and $250,000.
It's a revolving line of credit -- you'll be able to access some or all of the credit limit as often as you need, as long as you don't exceed the limit. For example, if your lender approved your company for a business line of credit of $40,000, you can draw $25,000 and still have $15,000 left to borrow.
Once you draw on your line of credit, you'll need to replenish it by paying back the balance in installments. You'll only pay interest on the portion you borrowed, and you can continue to borrow from the available balance while you pay off the line of credit. There are no limits to how often you draw on a business line of credit as long as you stay within the limit and make timely installment payments.
Once the line is established, you have peace of mind knowing that you have access to the funds right away. You don't have to worry about applying for a loan. Simply transfer funds from the line of credit to your business bank account or write your company a check from the line of credit account.