A revolving facility that allows a borrower to draw, repay, and draw again up to a limit.
For example, a landscaping company secures a $120,000 operating line of credit to cover payroll and equipment costs in spring before client invoices are collected. The company draws $70,000 in April, repays $40,000 in June, and maintains the remaining balance for seasonal cash flow management.
Why it matters: It provides a crucial, revolving safety net for unpredictable cash flow gaps, ensuring payroll and critical expenses are always met.
.avif)
.svg){kind=small}