Line of credit (or revolving business credit) facilities can offer a flexible way for your business to borrow money.

You are given a credit limit, can choose to drawdown what you want to borrow when your business needs it, and only pay interest on what you withdraw.

You could use a commercial line of credit to pay for:

  • Wages

  • Rent

  • Tax

  • Other bills and expenses

If you need to borrow a fixed amount you could consider a standard business loan instead, rather than a revolving credit agreement.

How to get a business line of credit

To set up a flexible line of credit for your business you need to know:

  • How long you need the credit facility for

  • What credit limit you need

Some lenders offer unsecured business line of credit facilities, but others require you to use business assets as a guarantee, so check this before you apply.

How long do they last?

Usually up to 12 months, but sometimes longer.

You can usually pay off what you owe earlier to to save money on interest.

How do credit limits work?

The credit limit is the maximum amount you can borrow using the credit facility, but the limit your business will get depends on factors like your:

  • Annual turnover

  • Business assets

  • Credit record

Revolving credit FAQs

Q

How long does a business credit facility take to set up?

A

Some lenders can open a commercial line of credit in less than 2 hours if your application is approved.

Q

How can I monitor my credit facility balance?

A

Most lenders will allow you to track how much you have borrowed online, so you can check a live balance at any time.

Q

How will interest be charged on my balance?

A

Interest is normally charged daily on the funds you have drawn down from your credit facility. This interest charge is then applied weekly or monthly.

Q

What will my credit limit be?

A

This is based on your business turnover, assets and finances. Credit facilities can offer limits from 1,000 up to over 500,000.