A business line of credit is a revolving or non-revolving credit limit a business draws on as needed, paying interest only on the amount drawn. Keelpark Capital Group, a small-business funding broker in Jackson, Tennessee, helps Madison County owners decide whether a line suits their cash pattern and connects them with lending partners, which make the credit decision and set rates and terms.
| Built for | Needs that recur at different sizes and times |
|---|---|
| How you pay | Interest on the drawn balance; payments set by the partner |
| Two kinds | Revolving (reusable) and non-revolving (draw once or in stages) |
| Partners usually review | Deposits, credit, existing debt and sometimes collateral |
| Who sets the limit | The lending partner, not Keelpark Capital Group |
| Address | 109 N Church St, Jackson, TN 38301 · (731) 252-4018 |
Limit, draw, balance
Three terms describe every line of credit. The limit is the most you can have outstanding. A draw is money you take from it, by transfer or check. The balance is what you owe at any moment, and it is the balance, not the limit, that interest is charged on.
How does business line of credit interest work? Most lines charge a variable rate on the daily or monthly balance, and some add a maintenance or draw charge. Ask each partner how interest is calculated, how often it can change, and what charges apply when the line is open but unused.
Draw periods and repayment periods
What is a draw period on a line of credit? It is the window during which you can take money. Some lines stay open as long as the account is in good standing, subject to periodic review. Others have a set draw period followed by a repayment period in which no new draws are allowed and the balance is paid down on a schedule.
Read when the line comes up for renewal and what the partner reviews at that point. A line can be reduced or closed at renewal, so a business that depends on it should keep its records current all year.
Revolving or non-revolving
On a revolving line, every dollar you repay can be drawn again, much like a business credit card but usually with a higher limit and lower costs. What is a non-revolving line of credit? One where repaid amounts do not become available again; you draw once or in stages, and the facility winds down as you repay. Non-revolving lines often suit a defined project with uncertain timing, such as a fit-out paid in stages.
Secured or unsecured
A secured line is backed by assets: receivables, inventory, equipment or real estate. Larger limits are often secured. An unsecured line has no specific pledged asset but commonly requires a personal guarantee and a UCC filing against business assets. Before you sign, check what is already filed against the business using our Tennessee UCC lien search guide.
Can you use a line of credit for payroll?
Usually, yes, and it is one of the most common uses: draw to meet wages while customer payments are pending, repay when they clear. The same pattern fits restocking ahead of busy periods and covering a slow month. A line is a poor fit for a single large purchase you will repay over years; that is a term loan or equipment financing decision.
In Madison County, many businesses run with small teams. Of the county's 2,598 employer establishments in 2023, 1,138 had fewer than five employees (U.S. Census Bureau, County Business Patterns 2023). For a business that size, one late customer payment can hold up payroll, which is exactly the gap a modest line is designed to bridge.
Line of credit, working capital loan or advance?
| Option | Suits | Cost structure |
|---|---|---|
| Line of credit | Gaps that recur at different sizes | Interest on the drawn balance, plus any line charges |
| Working capital loan | One gap of known size and length | Interest on a lump sum over a set term |
| Merchant cash advance | Card-heavy businesses, after comparing the others | A fixed total set by a factor rate; not a loan |
Owners searching for a line of credit in Jackson, TN often see consumer offers first. A business line is underwritten on the business's deposits and the owners' credit, and it belongs in the business's name.
What partners review, and how we help
- Business bank statements showing regular deposits
- Time in business and entity records
- Business and personal credit
- Existing debts and advances
- For secured lines, the collateral and any borrowing-base reports
Keelpark Capital Group helps you decide whether a line fits and prepares the request for partners that offer lines.
By Keelpark Capital Group · Updated