Fieldhaven Business Funding in Valparaiso, Indiana leads with the business line of credit: a revolving limit for Porter County, Indiana firms whose bills come due before customers pay. This page covers business lines of credit, commercial lines, requirements, how draws and payments work, the draw period, and a worked month for a landscaping crew; 83 landscaping employers were in the county in 2023.
At a glance
- Landscaping employers, Porter County, IN
83 (County Business Patterns 2023)
- Construction employers
408, 64.5% with fewer than five employees (County Business Patterns 2023)
- Retail employers
464 (County Business Patterns 2023)
Business Lines of Credit for Porter County, IN Crews and Shops
A landscaping crew buys fuel and pays wages every week but bills commercial accounts monthly; a builder pays for lumber before the draw; a shop buys stock before customers buy it. Those bills return, and a revolving limit matches them. In Porter County, IN, County Business Patterns counted 83 landscaping employers, 408 construction employers and 464 retail employers in 2023 (County Business Patterns 2023). Each of those trades has a gap between paying out and getting paid.
With a line, the business draws only the part of the limit a bill needs, pays interest only on that part, and frees the limit again as it pays down. Unlike a term loan, there is no lump sum earning interest while it sits in the bank.
How Does a Business Line of Credit Work From Draw to Payoff?
- A partner sets a limit after reviewing the business's deposits, credit and time in business.
- The owner draws part of the limit, by transfer or check, when a bill comes due.
- Interest accrues daily on the balance drawn, not on the unused part of the limit.
- Each statement shows a minimum payment; paying more frees more of the limit.
- As customers pay, the owner pays the balance down and the limit opens back up.
Illustration only, invented figures: a crew with an invented $90,000 limit at an invented 11.5% draws $26,000 on day 10 and $14,000 on day 22, then pays $26,000 back on day 28. Interest for that 30-day month adds up as shown below (our arithmetic).
| Period | Days | Balance | Interest |
|---|---|---|---|
| Days 1 to 9 | 9 | $0 | $0.00 |
| Days 10 to 21 | 12 | $26,000 | $98.30 |
| Days 22 to 27 | 6 | $40,000 | $75.62 |
| Days 28 to 30 | 3 | $14,000 | $13.23 |
| Total | 30 | $187.15 |
Commercial Line of Credit vs Business Line of Credit
The two names can describe the same product. Some banks use "commercial line of credit" for larger limits secured by receivables, stock or equipment, with annual reviews of financial statements, and "business line of credit" for smaller limits read mainly from deposits and credit. What matters is in the agreement: the limit, how the rate is set, the fees, the security, how long draws are allowed, and what happens when the line comes up for renewal.
Business Line of Credit Requirements a Partner Can Name
- Time in business, with the start date of revenue.
- Business bank statements showing steady deposits over recent months.
- Owner credit history and, for larger limits, business credit.
- The latest business tax return, and financial statements for larger limits.
- A receivables aging or stock list when the line is secured by either.
- A schedule of debts the business already services, with monthly amounts.
Requirements are the partner's to set and vary by limit size. The article on qualifying for a business line of credit walks through each item in more depth.
What Is a Draw Period on a Line of Credit for a Landscaper or a Builder?
The draw period is the stretch during which the business can draw on the limit, for example a year at a time with a renewal review, though the agreement sets it. Some lines then move into a repayment period with no new draws, during which the balance is paid off on a schedule. Others simply renew. During the draw period, some agreements allow interest-only payments: an invented $18,000 balance at an invented 11.5% would cost about $172.50 a month in interest alone (our arithmetic), with nothing going to principal.
Interest-only payments keep the monthly cost low but leave the balance where it was. The line of credit payment calculator shows what a drawn balance costs when it is paid off over a set number of months instead.
Revolving Credit for a Landscaping Crew Between Billing Cycles
Landscaping crews in Porter County, IN are small: 67.5% of the county's 83 landscaping employers had fewer than five employees in 2023 (County Business Patterns 2023). For a crew that size, one late commercial account can tie up a large share of the month's revenue. A line covers the wages and fuel until that account pays, and the crew's mowers and trailers can stay on separate equipment financing.
A line is not the right tool for everything. A mower with a working life of several years belongs on an equipment loan, a one-off gap can sit on a working capital loan, and buying another crew belongs on a term loan. The landscaping page, the construction page and the retail page show how each trade uses a line.
For the qualifying side, read how a Porter County, IN business qualifies for a revolving line; for builders, how a contractor pairs a line with machine loans; for security, what a line can be secured by; and for the cost of the alternative, how a merchant cash advance is collected from card sales.
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