A line of credit is a flexible business funding solution that provides access to funds whenever you need them, without requiring you to take the full amount upfront. Instead of receiving a lump sum like traditional loans, lenders assess your business's historical earnings and cash flow potential to establish a credit limit that you can draw from as required, paying interest only on the amount you actually use.

This financing approach enables businesses to manage cash flow fluctuations efficiently, making it an attractive option for companies that experience seasonal variations or unexpected opportunities. The revolving nature means once you repay funds, they become available to draw again. The approval process centres on demonstrating your business's capacity to service the debt through its operational income streams and ongoing revenue generation.

Traditional business lending typically demands you borrow fixed amounts with immediate interest charges on the full loan value, regardless of whether you need all the funds immediately. When businesses take conventional loans, they're committed to predetermined repayment schedules with limited flexibility. This rigid structure leads traditional lenders to implement more restrictive qualification criteria, extended approval timeframes, and reduced flexibility in their lending decisions compared to modern line of credit facilities.