Line of credit vs Revolving credit: What is the Difference?

Line of credit vs Revolving credit: What is the Difference?

Line of credit vs Revolving credit: What is the Difference?

Understanding Lines of Credit and Revolving Lines of Credit: Choosing the Right Financing for Your Business


When it comes to financing a business, understanding the available options is crucial. Among these, a line of credit and a revolving line of credit are two popular choices. This article will define both, highlight their differences, discuss their pros and cons, and explain how Yardline can assist with these funding solutions.

Defining Line of Credit and Revolving Line of Credit

A line of credit is a flexible loan from a financial institution that allows you to borrow up to a certain limit. Similar to a credit card, you can access funds as needed and only pay interest on the money you use. This type of credit is often used for covering short-term capital needs or unexpected expenses.


A revolving line of credit, on the other hand, is a specific type of line of credit where the credit limit resets as you pay off your debt. It provides ongoing access to funds, meaning once you repay what you’ve borrowed, you can borrow again up to the credit limit without needing to reapply for a new loan. This continuous access to funds makes it ideal for businesses with fluctuating cash flow needs.

Differences and Usage

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The primary difference between a line of credit and a revolving line of credit is the borrowing structure. With a standard line of credit, you may need to reapply once you reach your credit limit. In contrast, a revolving business line of credit replenishes as you repay the borrowed amount, offering more flexibility.

When to Use a Line of Credit:

  • Short-term needs: Ideal for temporary financial gaps, such as seasonal inventory purchases or covering payroll during off-peak times.
  • One-time expenses: Suitable for specific expenses like purchasing equipment or funding a marketing campaign.

When to Use a Revolving Line of Credit:

  • Ongoing cash flow management: Perfect for businesses with unpredictable income streams, ensuring they have consistent access to funds.
  • Recurring expenses: Beneficial for managing regular expenses like rent or utilities that require continuous funding.

Pros and Cons
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Line of Credit



  • Flexible borrowing: Access funds as needed without taking out a lump sum loan.
  • Lower interest rates: Often comes with lower interest rates compared to credit cards.
  • Interest on usage: Pay interest only on the amount borrowed.


  • Credit limits: May need to reapply once the credit limit is reached.
  • Collateral requirements: Often requires collateral, which can be a barrier for some businesses.
  • Variable interest rates: Rates can fluctuate, making it harder to predict borrowing costs.


Revolving Line of Credit



  • Continuous access: Credit limit resets as you repay, offering ongoing access to funds.
  • Convenient for cash flow: Ideal for managing ongoing operational expenses.
  • No reapplication: No need to reapply after reaching the credit limit.


  • Higher interest rates: Generally higher interest rates compared to standard lines of credit.
  • Maintenance fees: May include annual or monthly maintenance fees.
  • Temptation to overspend: The ease of access can lead to overborrowing and higher debt.

Yardline: Your Partner in Business Financing

Yardline provides a variety of funding solutions tailored to help your business grow, including both lines of credit and revolving lines of credit. Whether you need to manage seasonal inventory, cover unexpected expenses, or ensure consistent cash flow, Yardline offers flexible financing options to meet your needs.

Why Choose Yardline?


Competitive Rates and Terms: Yardline provides the best rates and terms for businesses looking to grow, ensuring you get the most value from your financing.

Fast Approval Process: Apply for funding today and get approved in as fast as 24 hours, allowing you to seize business opportunities without delay.

Expert Support: Yardline’s team of experts is available to guide you through the financing process and help you choose the best option for your business needs.

Diverse Funding Options: In addition to lines of credit and revolving lines of credit, Yardline offers a range of other funding solutions to support your business growth.



Choosing between a line of credit and a revolving line of credit depends on your business’s unique financial needs. While both offer flexibility, understanding the differences can help you make an informed decision. Yardline stands ready to provide you with tailored financing solutions to ensure your business thrives.

Apply for funding today and get approved in as fast as 24 hours by visiting Yardline.