Business line of credit package checklist

What a line of credit is for

A line of credit is a revolving loan. You draw, repay and draw again, up to a limit. It is meant for short-term needs that turn back into cash: buying inventory before a season, carrying receivables until customers pay, covering payroll on a contract before the first invoice is paid. See working capital.

It is the wrong tool for a truck, a building or a loss. Those need a term loan or capital. A lender who sees a line that is always fully drawn concludes it is funding something permanent, and will ask to convert part of it to a term loan.

Business loans sit in the commercial and industrial line of a bank’s call report, $2.63T FDIC call reports and NCUA 5300, Jun 30, 2026 across the lenders on this site. The call report does not separate lines from term loans.

Say what the line is for

Start the package with a half page:

• what the business sells and to whom;
• why cash goes out before it comes in, with the usual timing in days;
• the amount requested and how you arrived at it;
• how the line gets repaid in the ordinary course.

Worked example (hypothetical). A wholesale distributor has sales of $6,000,000 a year. Customers pay in 45 days on average. Inventory sits 60 days before it sells. Suppliers are paid in 30 days.

The gap. 45 days plus 60 days, less 30 days of supplier credit, is 75 days.

The need. Cost of goods is $4,500,000 a year, or about $12,300 a day ($4,500,000 divided by 365). Seventy-five days of that is about $925,000. The business keeps $325,000 of its own cash in the cycle, so the need is about $600,000.

The collateral. Receivables average $740,000 ($6,000,000 times 45, divided by 365). Inventory averages $740,000 ($4,500,000 times 60, divided by 365). Say the lender advances 80 percent on eligible receivables and 50 percent on eligible inventory, and treats 90 percent of each as eligible. Receivables support $532,800 ($740,000 times 0.90 times 0.80) and inventory supports $333,000 ($740,000 times 0.90 times 0.50), for $865,800. That is above $600,000, so the collateral supports the request.

The advance rates and the eligible share are this example’s assumptions. Each lender sets its own.

The package

Business financials

• Three years of federal business tax returns
• Year-end financial statements, and the accountant’s level of work on them: compiled, reviewed or audited
• An interim balance sheet and income statement, with the same period a year earlier
• A month-by-month cash flow projection for the next twelve months, showing the line drawn and repaid
• A debt schedule: every loan, line, lease and card, with lender, limit, balance, payment and collateral
• Organization documents and a certificate of good standing

Collateral reports

• An accounts receivable aging by customer: current, 30, 60 and 90 days and over
• An accounts payable aging
• An inventory report by category: raw material, work in process, finished goods
• A list of the largest customers with their share of sales
• Any existing liens: a UCC search, or the loan documents of current lenders

The lender reads the agings for concentration and age. Receivables that are long past due, owed by affiliates, or owed by a customer you also owe money to are commonly left out of the eligible total.

Owners

• A personal financial statement for each owner the lender names
• Personal federal tax returns, usually three years
• A list of other businesses owned and loans guarantied

Looking for a lender now? Find lenders for this in your state or see Business lenders state by state.

How the line is structured

The borrowing base. For larger lines the agreement caps outstanding draws at the borrowing base. You send a borrowing base certificate, often monthly, with fresh agings. If the base falls below what is drawn, you pay down the difference. Smaller lines often have no base and are simply reviewed each year.

The lien. A line is commonly secured by a blanket lien on receivables, inventory, equipment and other business assets, recorded by filing a UCC financing statement. A second lender cannot easily take a first lien on the same assets. If your equipment lender or a merchant cash advance provider has filed against everything, the bank will want that resolved first.

Covenants. Promises in the agreement that the lender tests, usually quarterly or yearly. See covenant. Common ones: deliver financial statements by a date, keep a minimum coverage ratio, limit other borrowing, limit distributions to owners. Read them before closing and test them against your own projections. A covenant you will break in the second quarter is a problem to negotiate now.

Clean-up. Some lenders require the line to be paid to zero, or below a set level, for a period each year, to show it is financing a cycle and not a permanent need. Whether there is one, and how long, is the lender’s policy.

Term and renewal. Bank lines usually run a year and are renewed after a review of the year-end statements. A line can be reduced or not renewed. Know the maturity date and start the renewal early.

Guaranties. Expect a personal guaranty from the principal owners. See guarantor strength and recourse.

SBA lines: CAPLines and SBA Express

SBA does not guaranty an ordinary revolving line under its standard 7(a) processing. It does under named programs.

SBA CAPLines in SOP 50 10 8.1 (effective October 1, 2026)

A lender may run a Working Capital CAPLine on a borrowing base certificate. The maximum variable rates are the same tiers as other 7(a) loans, from the base rate plus 6.5 percentage points on loans of $50,000 or less down to the base rate plus 3 points on loans above $350,000.

SBA Express also allows revolving lines, under the lender’s delegated authority, up to that program’s $500,000 limit. See the 7(a) checklist for the borrower forms both share. SBA does not require you to use an agent or broker.

Finding lenders

The public record for lines is thin. A bank’s call report shows its commercial and industrial balance, which mixes lines, term loans and equipment loans. It does not show unused business lines in a way this site reports. SBA’s files do list each CAPLine and SBA Express loan with its lender, so the SBA record is the one place a searcher can see who makes guarantied lines. See how to read SBA loan data.

For an ordinary bank line, a common starting point is the bank that already holds the business’s deposits. It can see the cash moving. After that, look for banks with a business loan book that is large for their size.

Want a person to check the public record for a business line of credit? Request financing from The Lender Report’s operator. A person replies by email, usually naming lenders that have made loans like yours. It is free, it covers business and investment property loans only, and nothing is sent to a lender.

What the public record can and cannot tell you

It can: show which banks and credit unions hold business loans, and which lenders made SBA lines.

It cannot: show advance rates, covenants, pricing, clean-up rules, or which banks want a business like yours. None of those is published.

Questions to put to the lender

• Is this line on a borrowing base, and what are the advance rates and eligibility rules?
• What covenants will you test, and how often?
• Is there a clean-up requirement?
• What lien will you file, and do you need other lenders to subordinate?
• When does the line mature, and what do you need for renewal?
• Would a CAPLine or SBA Express fit this better?

General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.

SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.

Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem