Do I pay interest on the whole credit line?

No. You pay interest only on the amount you've drawn and not yet repaid. An unused limit costs nothing in interest, though some lenders charge a separate maintenance or draw fee.

How is a line of credit different from a business credit card?

Both revolve, but a line of credit usually offers higher limits, lower rates, and the ability to draw cash directly, while cards are better for everyday purchases and rewards.

How fast can I get a business line of credit?

Online lenders can often approve and open a line within days. Timelines depend on the lender and your documentation.

Will checking my options affect my credit?

No. Checking options through WithFunded is a soft inquiry with no impact on your credit score. A hard inquiry generally happens only at formal application with a lender you choose.

WithFunded › Business Line of Credit

Business Line of Credit: flexible funding you draw as you need it

A business line of credit gives you a set credit limit you can draw from anytime — and you pay interest only on the amount you actually use, not the full limit.

A WithFunded guide · Rates as of June 2026 · Updated quarterly

Quick facts

Best for: Uneven cash flow, recurring gaps, draw-as-you-go needs
How you pay: Interest only on what you draw; revolves as you repay
Typical limits: A few thousand up to several hundred thousand
Rate basis: Representative 8%–30% APR on drawn balances
Funding speed: Often days
Credit fit: Stronger profiles get higher limits and better pricing

How a line of credit works

Unlike a term loan, where you take the full amount up front and repay it on a fixed schedule, a line of credit is revolving: you're approved for a limit, draw what you need, repay it, and draw again. The defining feature is that you pay interest only on the outstanding draw — an unused limit costs you nothing in interest.

That makes it the natural fit for the gaps the WithFunded quiz most often routes here: covering payroll between receivables, buying inventory ahead of a busy season, or bridging a slow month.

What a draw costs

Because you only pay on what you draw, cost depends on the balance and how long you carry it. At the middle of the representative band (about 19% APR), here's the monthly interest on a carried draw before any principal paydown:

Carried draw	Approx. monthly interest (≈19% APR)
$10,000	$158
$25,000	$396
$50,000	$792
$100,000	$1,583

Interest-only illustration on a carried balance; actual structures, draw fees, and repayment terms vary by lender. WithFunded calculation.

Line of credit vs. term loan

Choose a line of credit if…

Your need is recurring or unpredictable
You want to borrow only when you need to
You'd rather not pay interest on idle funds

Choose a term loan if…

You have a one-time, known expense
You want a fixed payment and payoff date
You're financing a large, single purchase

Qualifying

Lenders weigh time in business, monthly revenue, and credit. Stronger profiles get higher limits and lower pricing. Checking your options through WithFunded uses a soft credit inquiry, which does not affect your credit score; a hard inquiry typically happens only when you make a formal application with a chosen lender.

Frequently asked questions

Do I pay interest on the whole credit line?: No. You pay interest only on the amount you've drawn and not yet repaid. An unused limit costs nothing in interest, though some lenders charge a separate maintenance or draw fee.
How is a line of credit different from a business credit card?: Both revolve, but a line of credit usually offers higher limits, lower rates, and the ability to draw cash directly, while cards are better for everyday purchases and rewards.
How fast can I get a business line of credit?: Online lenders can often approve and open a line within days. Timelines depend on the lender and your documentation.
Will checking my options affect my credit?: No. Checking options through WithFunded is a soft inquiry with no impact on your credit score. A hard inquiry generally happens only at formal application with a lender you choose.

See what your business qualifies for

Answer a few questions and get matched to your best-fit option. Zero upfront fees. Checking won't impact your credit.

Get matched → or open the payment calculator

Cost figures are WithFunded calculations using a representative 8%–30% APR band applied to carried balances; they are illustrations, not quotes.

Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.