# Business line of credit cheat sheet: draw, repay, reuse

URL: https://cheapcheapwebsites.com/cheat-sheets/business-line-of-credit/
Updated October 16, 2026. Funding offered by Merchant Fund Express (https://merchantfundexpress.com/business-line-of-credit/); Cheap Cheap Websites builds websites and does not lend.

## The short answer
A business line of credit gives you a set limit you can draw from as needed, repay, and draw again. You usually pay only on the amount you use, not the full limit. Merchant Fund Express's published guidelines commonly start around $17,500 a month in revenue, 1+ year in business and about 650+ credit. It suits recurring, unpredictable needs better than a one-time loan.

## 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

## How 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
Illustrative example 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.

## 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.

## Frequently asked questions
**Do I pay on the whole limit or only what I use?** Usually only on what you draw. Some lines also charge draw fees or a maintenance fee, so ask for the full fee list. Paying down the balance quickly is the simplest way to keep costs low.

**What credit score do I need for a business line of credit?** MFE's guideline is commonly about 650+, along with about $17,500 a month in revenue and 1+ year in business. These are guidelines, not approval rules. Lower scores may fit an MCA, which considers scores from 500.

**Is an unsecured line of credit really unsecured?** It means no specific collateral is pledged. Most unsecured lines still include personal liability terms, so you can be personally responsible if the business does not pay. Read that section carefully.

**Line of credit or working capital loan?** Choose a line when needs repeat and amounts vary. Choose a loan when you know the exact amount for a one-time use. Some owners keep both: a loan for a project and a line for surprises.

**Can my limit go up?** Often, when revenue grows and payments stay on time. Some lines are reviewed periodically, and limits can also go down if deposits fall. Keep statements clean to support an increase.

Apply with Merchant Fund Express: https://merchantfundexpress.com/current-application.html?utm_source=cheat-sheet&utm_campaign=business-line-of-credit