The short answer
At a glance
| What it is | A revolving limit you draw from, repay and reuse |
|---|---|
| Typical limits | Varies with revenue and credit; MFE reviews $5,000 to $5,000,000 |
| Revenue guideline | Commonly from about $17,500 a month |
| Time in business | Usually 1+ year |
| Credit | Commonly about 650+ |
| Cost structure | Charges on the drawn balance; ask about draw fees and maintenance fees |
| Collateral | Unsecured lines exist; owners are often personally responsible, so read the terms |
| Documents | 3 to 4 months of bank statements, ID, voided check; more for larger limits |
| Best for | Uneven cash flow, recurring purchases, emergencies |
| Avoid if | You need one large sum for a fixed project |
Before you apply: checklist
- Confirm you have at least a year of business history
- Check your personal credit score against the 650 guideline
- Average your monthly revenue over the last 3 to 4 months
- Ask how charges are calculated on drawn balances
- Ask about draw fees, maintenance fees and minimum payments
- Read the personal liability and collateral terms
- Decide a rule for when you will and will not draw
- Gather statements, ID and a voided check
Check what your business qualifies for
Merchant Fund Express reviews business line of credit requests from $5,000 to $5,000,000. Scores from 500 are considered, and same-day decisions are common on complete files.
Check funding options with Merchant Fund ExpressHow draws and repayments work
Think of a line of credit as a reusable pool. If your limit is $50,000 and you draw $20,000, you have $30,000 still available. As you repay, the available amount refills.
- Draws. Move money to your bank account when you need it, often online.
- Payments. Usually weekly or monthly on the drawn balance.
- Renewal. Some lines are reviewed periodically, and the limit can change with your revenue.
Our business line of credit guide covers more detail.
Unsecured lines and who qualifies
An unsecured line does not require specific collateral like property or equipment. Most still include personal liability terms, which means you are personally responsible if the business cannot pay. Read that section before you sign.
Lines usually ask more of the business than an advance does. MFE's guidelines commonly start around $17,500 a month, 1+ year in business and about 650+ credit. If your score is the question, read credit score for a business line of credit. If you are newer or have lower credit, an MCA may be the closer fit; compare in line of credit vs MCA.
Illustrative example: paying down a draw
| Month | Starting balance | Assumed charge (2% of balance) | Principal paid | Ending balance | Available of $50,000 |
|---|---|---|---|---|---|
| 1 | $20,000 | $400 | $5,000 | $15,000 | $35,000 |
| 2 | $15,000 | $300 | $5,000 | $10,000 | $40,000 |
| 3 | $10,000 | $200 | $5,000 | $5,000 | $45,000 |
| 4 | $5,000 | $100 | $5,000 | $0 | $50,000 |
Assumptions: a $50,000 limit, one $20,000 draw, an assumed monthly charge of 2% on the starting balance, no other fees. Total charges: $400 + $300 + $200 + $100 = $1,000. Because charges apply only to what is drawn, paying down quickly keeps the cost low.
These figures are illustrations, not offers. Real pricing and terms depend on your file.
Funding brings customers. Is your website ready for them?
Funding usually pays for growth: more stock, staff, equipment or marketing. Make sure the customers that growth brings find a website that explains what you do and makes it easy to call, book or buy. Cheap Cheap Websites builds professional sites from $399, with Website Care at $30/month.
Common mistakes
- Treating the full limit as spending money.
- Making only minimum payments, so the balance never drops.
- Ignoring draw fees that add up with many small draws.
- Using the line for a long-term purchase better suited to equipment financing.
- Skipping the personal liability section of the contract.
- Letting revenue slide, which can lower the limit at review.
How Merchant Fund Express handles this
Merchant Fund Express reviews line of credit requests alongside its other products, so if a line is not the right fit today, another option may be. See the MFE business line of credit page and apply with Merchant Fund Express. English and Spanish service is available.
Related
Cheap Cheap Websites builds websites. It does not lend or make funding decisions. Funding is offered by our funding partner, Merchant Fund Express, and every request is subject to its review and approval. Figures on this page are illustrations, not offers. Updated October 16, 2026.