SBA Shutdown Raises Demand for Revolving Credit Lines

Last Updated on January 21, 2019

With the government shutdown still in effect (the longest in US history), millions of businesses that need SBA funding to grow are left waiting for their doors to reopen.

Fortunately, business owners are quickly realizing that they don’t have to, with a variety of financing options still available that are highly-effective in providing the cash flow needed to thrive in spite of the shutdown.

what is revolving credit how does it work

Government & SBA Shutdown Causes
Rising Demand for Revolving Lines of Credit

With the SBA in shutdown, business owners are receiving revolving business lines of credit in order to tide them over until it reopens, as well as prepare for the future economic decline expected in 2019.

This, together with the trend of Federal rate hikes are causing demand for the flexible revolving business line of credit to skyrocket nationwide.

Strong and constant cash-flow despite any slowdown in business, immediate access to cash on hand to use on an as-needed basis, low rates, a lower cost of capital, and the ability to refill any capital withdrawn are just a few ways revolving credit is preparing businesses to fund their way through any challenge or opportunity…

No matter how long the shutdown lasts, and how slow business becomes as a result.

But what exactly is revolving credit, and how does it work? How can you use them to your advantage?

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What Revolving Credit Means

The term “revolving credit” describes a cycle in which funds drawn from a credit line can be replaced, and become available to draw from again.

Revolving credit is different from other financing options including regular credit lines and loans, in which funds cannot be replaced if withdrawn.

What’s more, borrowers are not responsible for repayment of the entire revolving credit line at once.

Instead, borrowers are able to take out only the funds needed at a time. You only have to pay interest on the amount of funds you use, instead of the entire maximum at once, as you would most business loans and regular credit lines.

Difference Between Revolving Credit & Small Business Loans

differences between revolving credit and loans

How Revolving Credit Works

First, the borrower is given a credit line with a maximum amount of capital that they can draw from.

The borrower can then withdraw any amount of capital they need from their credit line, whenever they need it.

The amount drawn from their credit line is then subtracted from the maximum.

These funds – along with any more that you withdraw afterwards – can be placed back into your credit maximum at any time, where it will become available to draw once again.

How to Use Revolving Credit

How to use revolving credit

You can repeat this process as frequently as you like, chip away at your revolving credit until it’s gone, or use your entire credit line all at once – there is no right way to use one!

In fact, one of the main benefits of revolving credit is how customizable your experience can be when using one.

Some business owners use revolving credit as a way to prepare to take on any unexpected challenges or opportunities.

Another way to use revolving credit is to use the credit line as a flexible and reliable source of operating capital when cash flow gets tight.

Whatever your reasoning or strategy might be for using one, the fact that you only pay for the funds you draw, and not the entire line makes revolving credit one of the lowest cost of capital options available on the market.

Who Uses Revolving Credit?

Business owners who don’t want to burn through their own capital, as well as those who want to financially prepare their business to immediately act on any challenge or opportunity benefit most from revolving credit.

Medical, dental and other healthcare practices use revolving credit to bridge slow healthcare payments.

These funds are typically used to cover operational and overhead costs, and generally help ease cash flow caused by sporadic payment schedules

Similarly, retail, manufacturing and wholesale distribution companies use revolving credit lines to get what they need in advance of slow customer payments.

They use this capital to replenish inventory, cover operational costs, and get what they need to take on more orders.

Restaurant businesses use revolving credit to stock up on inventory and supplies, help with managing payroll, covering operational costs, purchasing new and upgrading old equipment, and smooth cash flow issues due to seasonal fluctuations.

Contractors similarly use revolving credit to smooth out cash flow during the slow season.

However, revolving credit is most useful to construction companies that need extra materials, heavy construction equipment or workers to take on an extra job, but don’t have the cash flow to support it.

With revolving credit, contractors are always prepared to take on any job, and get the cash flow they need to eliminate delays, and manage operational costs.

Does Revolving Credit Require Collateral?

Revolving credit through financing companies like National Business Capital & Services (National) do not require any collateral to be leveraged in order to qualify.

This is one of the main draws of revolving credit to business owners with limited assets, as well as those that simply do not feel comfortable putting personal or business property at risk.

Financing that is not backed by collateral is called “unsecured financing.”

To explore more unsecured financing options besides revolving credit, click the link here: Unsecured Business Loans: Everything You Need to Know

How to Get Revolving Credit (Do You Qualify?)

All you need to get revolving credit from National is:

  •  6+ Months in Business
  • $100K in Annual Gross Sales
  • NO Minimum FICO Required
  • NO Collateral Necessary

Easy requirements and funds in as little as 24 hours make revolving credit one of the most desirable financing options among business owners with bad credit, as well as young businesses, and those with limited assets.

However, it’s also common for even the largest corporations with stellar sales and FICO also use revolving credit. It’s popular among companies of virtually any size and industry!

Revolving credit can be tricky to get if you seek it through shady channels.

There has been a trend lately that shows banks, as well as business financing lenders and companies promising revolving credit, but not delivering.

Now that the economy is in full swing, the truth is that now revolving credit is available once again after many years.

You just need to know where to look.

National is one of the only financing companies that can equip clients with true revolving credit with their level of ease, speed and convenience.

How to Apply for Revolving Credit

Applying for revolving credit is free, and only takes about a minute. All you have to do is fill out this simple online application.

When you complete and submit the application, you will be contacted in seconds by a Business Financing Advisor.

Tell them your business goals, and what you’re hoping to achieve.

Your personal Business Financing Advisor will then immediately get to work finding the perfect Revolving Credit Line for you and your business, which you will receive in as little as 24 hours through National’s streamlined and expedited process.

Once you gain access to funds, you can immediately start taking action in growing your business!

Call (877) 482-3008 to ask a live Business Financing Advisor if revolving credit is the best financing option for you, and to have any additional questions or concerns immediately addressed.

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!


About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.