A business line of credit sets a borrowing limit the business draws on as costs come up, paying interest on the drawn balance only. Mesaside Advances, a small-business funding broker in Cheyenne, Wyoming, explains draw periods, revolving and non-revolving lines and secured versus unsecured lines for Laramie County owners. Lending partners make credit decisions and set rates and terms.
| Pays for | Recurring or unpredictable costs of varying size |
|---|---|
| How interest works | Charged on the amount drawn, not the whole limit |
| Types | Revolving or non-revolving; secured or unsecured |
| Laramie County construction | 355 employer establishments in 2023 (Census CBP 2023) |
| Who decides | The lending partner, not Mesaside Advances |
| Office | 1900 Thomes Ave, Cheyenne, WY 82001 · (307) 368-2257 |
How a business line of credit works
The partner approves a maximum, the credit limit. You draw from it, by transfer or check, when a cost arrives. Interest runs only on the drawn balance. As you pay the balance down, that amount becomes available again on a revolving line. Many lines also carry fees, such as an annual fee or a fee on each draw, so read the fee schedule as closely as the rate.
Drawing on a line, and the draw period
To draw on a line of credit simply means to borrow part of the limit. Many lines have a draw period, a window during which you can borrow, often followed by a repayment period when no new draws are allowed and the remaining balance is paid down on a schedule. Others renew each year after a review. Ask which structure an offer uses and what happens at the end of the draw period or at renewal.
Revolving or non-revolving?
A revolving line works like a business credit card without the card: repay and the room comes back. A non-revolving line lets you draw up to the limit during a set window, but repayments do not restore the limit. Non-revolving lines suit a project with costs spread over time, such as a fit-out paid in stages; revolving lines suit costs that recur.
How interest on a business line of credit is charged
Interest is usually calculated daily or monthly on the outstanding balance. Many lines are variable-rate, tied to a published benchmark plus a margin set by the partner, so the cost can change while the line is open. Some lines require monthly interest-only payments during the draw period; others require a percentage of the balance. A line with nothing drawn may still carry maintenance or annual fees.
Secured or unsecured lines
A secured line is backed by assets such as receivables, inventory or equipment, and the partner usually files a UCC financing statement to record its interest. An unsecured line has no specific collateral, which usually means a closer look at revenue, cash flow and credit, and often a personal guarantee from the owners.
Line of credit or term loan?
Choose by the shape of the need. One known cost with a clear price, such as a remodel, fits a term loan. Costs that recur at different sizes fit a line. Some businesses carry both: a term loan for the build-out and a line for the months when receivables run long. For a single, one-off gap, a working capital loan may be simpler. Stock purchased ahead of sales has its own option in inventory financing.
Who tends to use a line
Contractors are a common example: crews and materials are paid before progress payments arrive, and the size of the gap changes with every job. Laramie County had 355 construction employer establishments in 2023 (U.S. Census Bureau, County Business Patterns 2023), and the county's contractor financing page looks at how lines and equipment financing fit that work. Practices waiting on insurance payments and shops restocking at different times describe the same pattern; the industry pages cover each.
Using a line responsibly
- Draw for costs that will turn back into revenue, not to cover a loss that keeps repeating
- Know the payment due on the full limit, not just today's balance
- Track the renewal date and what the partner reviews at renewal
- Keep the line separate from any merchant cash advance; stacking obligations strains cash flow
Where Mesaside Advances fits
We help you decide whether a line suits your cash pattern, estimate a sensible limit from your own numbers, and send the request to partners that offer lines. The four steps explain what follows, and figures for the county are on our city page.
By Mesaside Advances · Updated
