#business-line-of-credit
Business lines of credit and revolving financing
Borrowing beats a 10 percent California late penalty — price your draw in dollars, book it as debt, and confirm the Kanmon terms before you click.
A revolver charges interest only on what you draw and must be renewed; a term loan disburses once and amortizes — match short money to short needs.
SBA CAPLines are 7(a) credit lines up to $5M in four types — Seasonal, Contract, Builders, Working Capital — with 10-year terms and prime-based rates.
A line of credit beats a business card for balances held past 30 days — lower rates, higher limits, no grace-period trap.
SBA's Working Capital Pilot offers 7(a) lines up to $5M — asset- or transaction-based — with borrowing-base certificates setting availability.
A credit-line draw is a liability that raises your debt-to-equity ratio; equity cash lowers it. Weigh deductible interest against permanent dilution.
A line of credit charges interest only on what you draw; a term loan charges it on the full sum from day one. Use lines for cash gaps, loans for assets.
A surf school's closed months still cost $3,000–$8,000 each. Size the trough first, then cover it with a revolving line or SBA Seasonal CAPLine, not an MCA.
In Q1 2026, 31% of small business owners named cash flow their top worry, passing inflation. With a 27-day median buffer, track runway in days.
SBA Express lends up to $500,000 with a 36-hour SBA response and a 50% guarantee — faster than standard 7(a), but lenders set a higher credit bar.
The Fed raised rates to 3.75–4% on Sept 16, 2026 and prime hit 7.00% the next day: every prime-plus business line, SBA 7(a) loan and card reprices now.
SBA rules require an unlimited personal guarantee from every owner holding 20% or more, and 59% of small businesses with debt have pledged one. Here is what SBA Form 148 actually obligates you to, the five traps founders miss — including guarantees that outlive your ownership — and the caps, burn-offs and release letters worth negotiating before you sign.
