A business line of credit lets a company draw funds up to a set limit, repay them and draw again, paying interest only on the drawn balance. Cloverglen Finance, a small-business funding broker in Muncie, Indiana, explains draw periods, revolving and non-revolving lines and interest, and introduces requests to lending partners, which make credit decisions and set rates and terms.
| Built for | Repeating or unpredictable costs |
|---|---|
| Interest | Runs only on dollars you have taken out |
| Watch for | Draw period length, renewal terms, unused-line or maintenance charges |
| Often secured by | Receivables, inventory or a blanket lien, plus a personal guarantee |
| Local context | 6,508 no-payroll businesses in Delaware County (NES 2024) |
| Who decides | A lending partner; Cloverglen Finance arranges, never funds |
| Address | 301 S Walnut St, Muncie, IN 47305 · (765) 224-5062 |
Drawing on a line, in practice
A draw is simply taking money from the line: a transfer to your business account, or a payment made directly from it. Once the line is open, you do not reapply for each draw. You can take part of the limit or all of it, as often as the agreement allows.
Repayment starts on what you have drawn. With a revolving line, every dollar repaid becomes available again, so the line works like a reusable reserve for costs that come and go.
Revolving and non-revolving lines
| Revolving line | Non-revolving line | |
|---|---|---|
| Can repaid amounts be drawn again? | Yes, up to the limit, while the line is open | No; each repayment permanently reduces what is available |
| Typical use | Recurring gaps: payroll timing, supplier bills | A planned series of costs, such as a staged fit-out |
| Feels most like | A reserve you refill | A loan released in stages |
A non-revolving line suits a project whose costs arrive in stages but will not recur. Once you have drawn and repaid it, it is spent. Ask which kind an offer is; the names are not always obvious from the paperwork.
What a draw period is
Many lines have a draw period, a window during which you can take money out. When it ends, you may enter a repayment period in which no new draws are allowed and the outstanding balance is paid down on a schedule. Other lines run for a year and come up for renewal, at which point the partner reviews the business again and may change the limit, the price or the terms, or decline to renew.
Know the draw period, the renewal date and what the partner will review at renewal before you rely on the line for something important.
How interest accrues on a business line
Interest accrues on the outstanding drawn balance, usually calculated daily and billed monthly. If you draw a portion of the limit for ten days and repay it, you pay interest on that portion for those ten days, not on the whole limit for the month. Many lines are variable-rate, tied to an index plus a margin. Some also carry draw fees, maintenance fees or a charge on the unused part of the limit; ask for every charge in writing, because those costs exist even in a month when you draw nothing.
Who uses credit lines in Delaware County, Indiana
Lines tend to suit businesses whose costs do not arrive on a neat schedule. Delaware County had 6,508 businesses with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024), from tradespeople to consultants, and 2,314 employer establishments in 2023 (County Business Patterns 2023). Owners in both groups often face the same pattern: a supplier wants payment now and a customer pays later.
A practice whose insurer payments arrive unevenly can use a line to keep payroll steady; our post on medical practice cash flow works through that case. A retailer can use one to cover restocking between sales. The industries page sets lines against each local sector, and local data and contacts fill in the county picture.
Should the project sit on the line or in a term loan?
If you know the cost, it is large and it will pay for itself over years, a term loan usually costs less and keeps the line free for the unexpected. If the costs are smaller, repeated and hard to predict, a line avoids paying interest on money sitting idle. A single one-time gap with a clear end date may be simplest as working capital.
Whichever you choose, the partner sets the limit and terms. The four steps show what happens after your first call, and the six-way comparison shows the alternatives.
By Cloverglen Finance · Updated