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Presented by QuickBooks Capital
This article is presented in partnership with QuickBooks Capital, helping small businesses access flexible financing when it’s needed most.
Running a business means staying ready for anything—whether it’s a sudden expense, a slow sales month, or a new growth opportunity you didn’t see coming. That’s where a business line of credit comes in.
A line of credit (LOC) is a flexible funding solution that gives you access to a set amount of capital, which you can draw from as needed. Unlike a traditional loan, you don’t receive a lump sum up front. Instead, you borrow only what you need, when you need it—and repay only what you use.
This makes a line of credit ideal for:
- Bridging cash flow gaps
- Covering unexpected costs
- Investing in short-term growth initiatives
Whether you’re stocking up on seasonal inventory, managing a delay in customer payments, or launching a new marketing campaign, a line of credit gives you the flexibility to act without disrupting your cash flow.
Through QuickBooks Capital, eligible Intuit QuickBooks Online users can apply for a line of credit directly within their account—making it easier to manage both your books and your borrowing in one place.1
Why a Business Line of Credit Works for Small Businesses
Choosing the right type of funding is critical, especially when you need flexibility. Here’s why a business line of credit is one of the most useful financial tools for small business owners.
1. Use it when you need it, repay it when you don’t.
Unlike a term loan, a line of credit gives you access to funds on demand. You can typically draw exactly what you need, when you need it, and repay early without penalties. It’s working capital, on your terms.
2. Only pay for what you use.
You’re only charged interest on the portion you borrow—not your total approved limit. That makes a line of credit more cost-effective than taking out a lump sum loan when you’re unsure how much funding you’ll actually need.
3. Bridge short-term cash flow gaps.
Use a line of credit to smooth over delayed customer payments, cover unexpected repairs, or handle months with three payrolls. It’s ideal for the “in-between” expenses that don’t warrant a full loan, but can’t go on a credit card.
4. Fuel business growth without delay.
Whether you’re launching a new marketing campaign, hiring seasonal help, or taking on a big new client, a line of credit gives you the power to act fast without draining your reserves.
5. Separate your business and personal finances.
Keeping business expenses separate is key for accurate bookkeeping and financial planning. A dedicated business line of credit helps you draw clear lines, while building credit in your business’s name.
6. Build business credit over time.
Making on-time payments and using your credit line responsibly can help improve your business credit profile—potentially unlocking better terms and higher limits in the future.
Did you know? QuickBooks Capital offers access to lines of credit using your QuickBooks account information. This solution is faster and easier to apply for than traditional financing options, factoring in your business performance—with no impact on your personal credit score when you apply.
Your line of credit isn’t just for emergencies, it’s a tool
Here are six strategic ways small business owners can use their credit lines to move faster, think bigger, and grow on their own terms.
Collaborate or co-market with another business
Forming a temporary alliance, like co-hosting an event or running a joint campaign, is a smart way to reach new customers and share costs.
Use your line of credit to cover upfront expenses like design work, contract fees, or shared marketing, without dipping into your cash reserves.
Bring in expert help when it counts
Want to shake up your sales strategy, refine your pricing, or improve operations before peak season? A consultant or coach can bring fresh thinking, but often require upfront fees.
Your line of credit lets you invest in expertise when the time is right, and repay gradually.
Go after government contracts
Landing a government contract can be a game-changer, but the bidding process often requires new tools, team members, and compliance investments—long before you get paid.
A line of credit bridges that cash flow gap and positions your business to compete confidently.
Launch or scale a marketing campaign
Digital advertising, content creation, and campaign testing can be expensive—but often essential. A line of credit allows you to fund your campaign in stages, matching spend to ROI.
With a line of credit, you can launch now, then replenish as results roll in.
Expand through franchising
Franchising is a smart way to grow with lower overhead—but getting started takes time and capital. Legal, training, and marketing costs can add up quickly.
Your line of credit helps you build the foundation, without locking into a fixed loan you may not need all at once.
Fulfill a major contract without draining cash flow
Winning a big job or client is exciting, but delivering can be expensive. A line of credit gives you working capital to hire help, purchase supplies, or ramp up production—then pay it back as revenue comes in.
What to look for in a business line of credit
A business line of credit can be one of your most powerful financial tools—but only if it works the way your business does. Here are four things to look for when evaluating your options.
Business-based underwriting
Many lenders rely on your personal credit score. Look for a provider that evaluates your business’s actual performance, like revenue trends, transaction history and cash flow.
Speed and simplicity
The application process shouldn’t take days. A modern line of credit should offer a quick, online application, fast approval decisions, and access to funds in a day or two—if not faster.
Flexibility without surprises
Look for a lender that offers clear terms, no hidden fees, and the freedom to draw only what you need. Bonus points if you can repay early without penalty!
Integration with your financial tools
Your line of credit should work with—not against—your financial systems. When your funding lives in the same ecosystem as your bookkeeping, forecasting, and reporting, everything gets easier.
