How to Help Your Clients Choose a Business Line of Credit

The short answer

When a client asks which business line of credit to use for a cash flow gap, most consultants give the same advice: pick a revolving line you can draw from only when you need it, where you pay interest only on what you use, and where the full cost is clear before you sign. The “best” line is the one that fits the size and rhythm of the gap, not the one with the flashiest headline rate.

Cash flow gaps are rarely a sign of a bad business. A client pays net-60. Inventory has to be bought before the busy season. Payroll lands two days before a big deposit clears. A line of credit is built for exactly these moments. Here’s how to tell a good one from one that will cause new problems.

6 things to compare in a business line of credit

1. Credit limit vs. the actual gap. Start by measuring the gap: how much cash is short, and for how long? A good line covers your largest typical shortfall with some room to spare. Too small, and you’re scrambling again next quarter. Too large, and you may pay for capacity you never touch.
2. Total cost, not just the rate. Ask for the interest rate and every fee: origination, draw fees, maintenance or annual fees, and any charge for not using the line. Two lines with the same rate can cost very different amounts once fees are added up.
3. How draws and repayment work. Some lines let you draw any amount at any time and repay on your schedule. Others set a fixed repayment period for each draw, with weekly or monthly payments. Match the payment rhythm to when your revenue actually arrives. Weekly payments can squeeze a business that gets paid monthly.
4. Speed to funding. A cash flow gap doesn’t wait for a six-week underwriting process. Know how long approval takes and how fast a draw hits your account once the line is open. This is where many traditional bank lines fall short for small businesses.
5. Qualification requirements. Lenders look at time in business, monthly revenue, and credit history. Some lines require collateral or a personal guarantee. Knowing the requirements up front saves time and avoids unnecessary credit inquiries.
6. Renewal and flexibility. Is the line revolving, so repaid funds become available again? Does it renew automatically, or do you reapply each year? Can the limit grow with your business? A line you can rely on year after year is worth more than a slightly cheaper one you have to fight to keep.

Red flags consultants watch for

A line of credit should take pressure off, not add it. Slow down if you see any of these:

• The lender won’t give you the total cost in writing
• Fees are vague, stacked, or only explained after approval
• Daily repayments on a line meant to cover a monthly gap
• Pressure to borrow the full limit right away
• Prepayment penalties that punish you for paying early

Client Deal Prep Checklist

• Size of your client’s gap and how long it typically lasts
• Last 3–6 months of business bank statements
• Monthly revenue and time in business
• Written quote showing rate, fees, and repayment terms
• Repayment schedule that matches your client’s cash inflows
• Clear answer on how fast draws are funded

Help your clients bridge the gap with ARF Financial

Your clients come to you because they trust you to find business financing that actually fits. When the need is short-term working capital, ARF Financial gives you revolving line of credit options you can match to each client’s cash flow:

• Bankroll: a revolving business line of credit your client can draw from, repay, and use again as needs come and go.
• Interest-Only Bankroll: a revolving line with interest-only payments, a strong fit for clients waiting on slow-paying invoices or seasonal revenue.
• Elevate Bankroll: a line of credit option for clients ready to step up their working capital.

Use the six factors above as your conversation guide, and bring the deal to ARF. We’ll help you put your client in the right line, so they get a solution that works and you get a client who comes back. Explore Bankroll lines of credit for your clients →