Which funding products does this apply to?

Business Line of Credit. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Are the figures here quotes?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What a particular lender charges is on that lender's page, where it publishes it at all.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

Revolving vs non-revolving business line of credit

Revolving versus non-revolving business lines of credit

Both let you draw less than the full amount and pay interest only on what you use. Only one of them gives the money back when you repay it.

By Find Me Funders research desk Updated 14 September 2026 1025 words 5 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

The difference sits in one sentence: on a revolving line, repaying a draw restores your availability; on a non-revolving line, it does not.

Suppose a $100,000 facility. You draw $40,000 and repay it two months later.

Revolving: availability goes back to $100,000. You can draw the same $40,000 again next quarter.
Non-revolving: availability stays at $60,000. The $40,000 you repaid is gone as far as future borrowing is concerned.

Everything else about the two products — interest only on what is outstanding, a commitment amount rather than a lump-sum advance, a documented facility with covenants — can look identical in the summary you are shown. Ask which one it is, in those words, before you sign.

Where each one belongs

A revolving facility is built for a recurring gap. Receivables that pay in 55 days against payables due in 30. Inventory bought in March and sold in June. Payroll in the week before a large customer settles. The gap opens and closes repeatedly, and the facility is designed to open and close with it. See revolving credit.

A non-revolving line is built for a staged spend against a known total. A build-out drawn in four tranches as the contractor hits milestones. A fleet purchased over six months. A software implementation billed in phases. You want the flexibility of drawing as you go and paying interest only on drawn funds, but you do not need the money back once it is spent, because the spending was a one-time project.

Using the wrong one is expensive in a specific way. A non-revolving line used for a recurring working capital gap works beautifully the first cycle and then leaves you with no facility for the second.

Structures that sit between the two

Draw period then term-out.Common on both bank and non-bank facilities. For a stated period you may draw and repay freely; at the end of that period the outstanding balance converts to an amortising term loan and no further draws are allowed. This is a revolving line with an expiry date on the revolving part. Find out the length of the draw period and what the amortisation looks like when it ends, because the payment can jump substantially on the conversion date.

Annual renewal.Many revolving lines are committed for twelve months and re-underwritten at renewal. The facility revolves within the year; whether it exists next year is a credit decision made against next year's financials. A line described as revolving is not thereby permanent.

Demand facilities.Some lines are repayable on demand regardless of whether you have defaulted. That term is worth finding in the document rather than in a phone call.

Multiple advance term loan.Functionally a non-revolving line under a different name. Draws are permitted up to a cap over a construction or acquisition period, then it amortises.

What changes in the paperwork

Non-revolving facilities are usually simpler. Because the exposure only goes down, the lender's monitoring burden is lighter, and reporting requirements are often lighter with it.

Revolving facilities usually carry more machinery: a borrowing base or availability calculation, periodic reporting, and sometimes a clean-up requirement forcing the balance to zero for a stretch each year. That machinery exists because the lender is exposed to a balance that can go back up at any time. See the guide on what makes a lender reduce or freeze a line.

Pricing structure differs too. An unused-line fee is common on revolving commitments and rare on non-revolving ones, for the obvious reason that a revolving lender is holding capital available against a balance that keeps returning.

What the two cost on identical usage

Illustrative only — a $100,000 facility at 12% on drawn balances, with a 0.375% fee on the unused portion. You draw $40,000 twice a year and repay each draw after three months.

Revolving.Interest is $40,000 at 12% for three months, twice: $2,000 a year. Average outstanding across the year is $20,000, so average unused is $80,000 and the unused-line fee is $300. Total $2,300 a year — and on 1 January of year two the full $100,000 is available again.

Non-revolving.The same two draws consume $80,000 of the commitment in year one, at a broadly similar cost. In year two there is $20,000 of availability left, which is half of one draw, and the facility has stopped doing the job it was taken out to do.

The annual cost lines are close to identical. The difference is not priced anywhere: one facility still exists in year two and the other has been spent. That is the reason "which is cheaper" is the wrong opening question about these two products, and why the sentence at the top of this page is the one to get answered before you sign.

Questions that settle it

If I repay a draw, does my availability go back up? (The whole question, in one sentence.)
Is there a draw period, and how long is it?
What happens at the end of the draw period — renewal, term-out, or expiry?
Is the commitment binding for the term, or is it a demand facility or subject to cancellation at the lender's discretion?
Is there an unused-line fee, a per-draw fee, or an annual fee, and on what base is each calculated?
Is there an annual clean-up requirement?

Which to ask for

Match it to the shape of the need, not to the size of it. If you can draw a picture of your cash gap opening and closing more than once a year, you want revolving. If the picture is one hole that you fill over several months and then it is filled, non-revolving is cheaper and simpler and does not tempt you to treat a facility as permanent capital.

The failure mode to avoid: a revolving line that never returns to zero has stopped being a line of credit and has become an interest-only term loan with no maturity discipline. That is the situation lenders impose clean-up periods to prevent, and it usually signals that the underlying problem is not timing at all.