Financing program
Business Line of Credit
A line of credit is capacity, not a lump sum. You draw what you need, repay it, and the limit becomes available again. Interest applies only to the drawn balance.
What is business line of credit for a food business?
A business line of credit is a standing limit you draw against only when you need it, and interest applies only to the drawn balance. Once repaid, the limit becomes available again, which makes it the right tool for repeat short gaps rather than a single large purchase.
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Pick a state to see whether this program is offered there, and what changes if it is limited.
| Detail | |
|---|---|
| Typical amount | 10,000 to 250,000 |
| Term | Revolving, reviewed periodically |
| Time to funding | 2 to 7 business days |
| Documents | Application, bank statements |
| Cost structure | Interest on the drawn balance only |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Where it fits
- /Cash flow smoothing
- /Vendor prepayments
- /Emergency repairs
- /Catering deposits
How the program works
- /Revolving structure with draws available on demand once the line is open.
- /Useful as standby capacity even when nothing is drawn.
- /Reviewed periodically and can be increased as revenue grows.
What it looks like in practice
A ghost kitchen draws for a produce prepayment and repays inside the same month.
A 3 location group keeps a line open purely for equipment failures.
Cost of capital calculator
Line of credit cost across a year, side by side
A line only charges for the days a balance is out, so the cost depends entirely on how you use it. Run your normal draw pattern in one column and a heavier one in the other to see what usage does to the annual cost.
Start from a common setup
Load a starting point, then edit any field in either column. Presets are examples, not offers.
Scenario A
Enter 0 if the line has none.
Scenario B
Enter 0 if the line has none.
Sensitivity: move one driver at a time
| Annual rate | Annual cost of the line | Change |
|---|---|---|
| 1.0% | $197 | -$3,353 |
| 15.8% | $3,107 | -$444 |
| 30.5% | $6,016 | +$2,466 |
| 45.3% | $8,926 | +$5,375 |
| 60.0% | $11,836 | +$8,285 |
| Days a balance stays out | Annual cost of the line | Change |
|---|---|---|
| 1 days | $118 | -$3,432 |
| 45.75 days | $5,415 | +$1,864 |
| 90.5 days | $10,711 | +$7,161 |
| 135.25 days | $16,008 | +$12,457 |
| 180 days | $21,304 | +$17,753 |
Change is measured against annual cost of the line in the scenario the sliders control. Moving a slider edits that column, so the side-by-side updates with it.
Side by side
Scenario A costs $3,551 less on annual cost of the line.
The arithmetic
Interest per draw = balance x annual rate x days / 365. Annual cost = (interest per draw x draws per year) + (monthly maintenance x 12).
Sources
- 1Bank prime loan rate, the base most business term financing is priced againstFederal Reserve, H.15 Selected Interest Rates. Published daily by the Federal Reserve. Enter the current prime rate when pricing a variable rate offer.
- 2Annual percentage rate definition, 12 CFR 1026.22Consumer Financial Protection Bureau, Regulation Z. APR is the nominal annual rate that discounts a payment stream back to the amount advanced. We solve it numerically from the payment schedule and multiply the periodic rate by the number of periods per year.
- 3Amortizing payment formula: P x i / (1 - (1 + i)^-n)Standard time value of money identity. The same closed form used by the PMT function, with i as the monthly rate and n as the number of monthly payments.
Education only: this calculator runs your own inputs through published arithmetic so you can compare business line of credit scenarios before you talk to anyone. It is not a quote, a promise to lend, an approval, or an indication of offers to come. Real terms come from a funding partner in writing after underwriting.
Availability: Program availability varies by state, and not every program is offered everywhere we operate.
Compare all 6 programs
How business line of credit compares against every other program on amount, term, speed, cost structure, and what underwriting expects. Compare total dollars repaid rather than the monthly payment.
| Typical amount | Term | Time to funding | Cost structure | |
|---|---|---|---|---|
| Equipment Financing | 5,000 to 500,000 | 24 to 84 months | 1 to 5 business days | Fixed monthly payment |
| Working Capital | 10,000 to 500,000 | 3 to 18 months | 1 to 3 business days | Fixed daily, weekly, or monthly payment |
| SBA Loans | 50,000 to 5,000,000 | 10 to 25 years | 3 to 12 weeks | Amortized interest, lowest payment of any program |
| Business Line of Credit | 10,000 to 250,000 | Revolving, reviewed periodically | 2 to 7 business days | Interest on the drawn balance only |
| Merchant Cash Advance | 5,000 to 250,000 | Repaid as card volume arrives | 1 to 3 business days | Factor rate, highest total cost |
| Buildout and Expansion | 50,000 to 2,000,000 | 36 to 84 months | 1 to 4 weeks | Fixed payment, often with a draw schedule |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
| Time in business | Credit | Revenue | Collateral | |
|---|---|---|---|---|
| Equipment Financing | Month 1 with a down payment, common by month 6 | Options below 600, best terms above 700 | No minimum when the quote and asset are strong | The equipment itself |
| Working Capital | 6 months of deposits | Options below 600, pricing improves above 650 | About 15,000 per month in deposits | General business lien, no specific asset |
| SBA Loans | 2 or more years, exceptions for acquisitions | 660 and above with clean recent history | Documented profit and debt service coverage | Business assets, often real estate, plus a personal guarantee |
| Business Line of Credit | 12 months | 650 and above for most limits | Consistent monthly deposits across 12 months | General business lien |
| Merchant Cash Advance | 4 to 6 months of card processing history | Options in the low 500s | About 10,000 per month in card volume | Future card receivables |
| Buildout and Expansion | 12 months, or a funded project with an executed lease | 650 and above for most structures | Sized to the project and the operator contribution | The project, with 10 to 30 percent operator contribution |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Every request
- /Completed program application with ownership details
- /3 to 6 months of business bank statements
- /Time in business and entity details
Equipment and buildout
- /Vendor quote including delivery, installation, and freight
- /Contractor bids and the draw schedule on construction
- /Executed lease for the space
SBA and conventional term
- /3 years of business and personal tax returns
- /Interim profit and loss statement and balance sheet
- /Debt schedule and personal financial statement
- /Purchase agreement and seller financials on an acquisition
Business Line of Credit by business type
Guides and calculators for business line of credit
Business Line of Credit questions
How is a line of credit different from a term loan?
A term loan gives you a lump sum with a fixed payoff schedule. A line of credit gives you a limit you draw against as needed, and you only pay interest on what is drawn.
Does an unused line cost anything?
Some lines carry a small maintenance or draw fee. Many carry no cost when undrawn, which makes them useful as standby capacity.
How fast are draws available?
Once the line is open, draws typically hit the account within 1 business day.
Can my limit increase?
Yes. Lines are reviewed periodically, and consistent revenue growth with clean repayment usually supports an increase.
Is a line of credit good for buying equipment?
It works for small urgent purchases, but equipment financing is usually cheaper for larger tickets because the equipment secures the loan.