Top 9 Benefits of "Revolving" Business Lines of Credit

Last Updated on September 10, 2018

These days, anyone who owns a business wants a true revolving business line of credit more than any other funding option.
But what is a “true revolving” business line of credit, and what makes it better than “normal” small business loans and business credit lines? Read on to find out!

9 advantages of a revolving business line of credit

Top 9 Benefits of Revolving Business Line of Credit

Here are the 9 most common reasons why more business owners are choosing revolving credit lines over any other funding options:

  1. Draw, Replace, Draw it Gain: This is where the “revolving” part comes in. With a revolving credit line, you can draw only as much capital as you need from a credit line, replace it if you’d like, and then this amount becomes immediately available to draw from again!
  2. Immediate Access to Cash=Greater Flexibility: True revolving credit lines are some of the fastest funding options available. Connected through technology, business owners can rely on their revolving credit lines to be immediately accessible to use whenever they need funds. This is especially useful to have in preparation of unexpected business challenges and opportunities. Through our expedited funding process, we can equip business owners with a true revolving business line of credit in as little as 24 hours.
  3. True Interest Rate APR: Revolving credit lines follow lower true interest rate APR, compared to other funding products like MCA’s and other forms of business lines of credit that follow factor rates.
  4. No Real Estate Collateral Needed: Revolving business lines of credit are unsecured, meaning you don’t need to leverage any real estate assets as collateral.
  5. No Prepayment Penalties: No penalty will be given to those who wish to pay their credit lines down or pay them off entirely at any time.
  6. Higher Control=Lower Cost of Capital: Because you can control exactly how much they want to draw, exactly how much you need at a time, you can have piece of mind knowing you’ll never have to worry about borrowing too much.
  7. Don’t Pay for What You Don’t Use: Unlike other funding options, you don’t have to pay for the total amount of your credit line borrowed. You can feel secure knowing you have available funds to draw from, even if you’re not using it.
  8. Build Your Credit as You Use It: As you draw from and use capital from your revolving credit line, you are in turn building your FICO score!
  9. Grow Your Credit Line as Your Business Grows: Banks take a stringent and frustratingly slow approach to expanding credit lines as requested by business owners. Fortunately, our revolving credit lines are constantly being reviewed in order to qualify business owners for credit line growth as their business grows.

Revolving Business Line of Credit Definition

A revolving business line of credit is an unsecured type of credit line that allows for business owners to draw only the amount of capital they need at a time, which they can then replace back into the total of their credit line, where it becomes immediately available to draw from once again.
This “revolving” nature this type of business LOC from “normal” business lines of credit and business loans. They are also unique in that they require no collateral to be leveraged.
Although somewhat harder to obtain than other funding options due to no collateral requirements, business owners often benefit from a lower cost of capital, greater control over the funds they use, and flexibility to draw funds as needed to prepare for any business challenge or opportunity.

Where to Get a Revolving Business Line of Credit

You can either get a business line of credit through a traditional bank, or through alternative options like us.
Banks, however, typically don’t like to offer revolving business lines of credit, as they see unsecured credit lines controlled entirely by business owners as a riskier move than other funding options.
This often results in collateral leveraging, high FICO and time in business requirements, high interest rates, and slow processing speeds.
Fortunately, financing companies like us specialize in providing business owners with true revolving business lines of credit with never any collateral needed, only 6 months in business and 650 FICO requirements, and an expedited, safer funding process for 90% of all business owners who apply.

Secured vs. Unsecured Lines of Credit

When comparing credit lines from lenders, you may have come across two different types: secured and unsecured. The main difference between the two is whether or not collateral is required. Some lenders put a lien on your assets to secure the credit line, meaning you could lose those assets if you find yourself unable to pay back what you draw out.
Many lenders look at unsecured loans as liabilities and are therefore wary to extend this type of credit. Alternative lenders have less stringent qualification requirements, allowing businesses with low credit scores and short operating histories to access credit lines without worrying about the possibility of losing their assets. Since you don’t have to put up any collateral for the unsecured lines of credit from National, this structure is less risky for you as a business owner. 

Am I Limited to a Low Revolving Line of Credit?

If you have a lower credit score or operate a business in a “high-risk” industry, you may not be able to qualify for a line of credit, or the desired amount. Qualifying businesses tend to have lower limits, and pay more in interest on the money they borrow.
National Business Capital and Services works with merchants across industries. We look at factors beyond credit scores to determine credit limits, terms and rates. With a truly revolving line of credit, you can borrow exactly what you need up to your credit limit, and know the funds will always be there to help cover expenses.

How to Get a True Revolving Business Line of Credit

So if you think a revolving credit line would be the best type of funding option for your business, give us a call at (877) 482-3008 apply by filling out our 1-minute application online.
Through our exclusive connections to over 75+ specialized lenders, we’ll ensure we find the best revolving credit line in the global marketplace for your business.

National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!


About the Author, Matt Carrigan

Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.