When does a line fit?
For recurring weekly or monthly purchases with predictable sales. You draw, repay as inventory sells and draw again.
Lines often require stronger credit and history. Some have annual reviews or fees on unused amounts.
Check renewal terms; a line can be reduced after a weak year.
When does working capital fit?
For seasonal stock-ups, bulk buys or one-time needs, with a fixed total cost.
It is often easier to qualify for and faster to fund.
Think about seasonality when choosing. A bar with steady year-round sales gets the most from a line, drawing and repaying each month. A seasonal bar that needs a big stock-up once or twice a year may pay fees on an unused line for months. In that case, a one-time working capital amount timed to the season can be simpler and cheaper overall.
Can I use both?
Yes. Some operators keep a small line for weekly purchases and use working capital for seasonal stock-ups.
Disclose all financing and keep combined payments manageable.
| Feature | Line of credit | Working capital |
|---|---|---|
| Use | Recurring purchases | One-time stock-ups |
| Cost | On amount used | Fixed total |
| Qualifying | Stricter | More flexible |
| Speed | Slower to set up | Often faster |
Worked example: a seasonal stock-up
A beach bar averaging $94,000 in monthly deposits during the season needs a $16,000 stock-up before Memorial Day and does not yet qualify for a line. Using an illustrative factor rate of 1.20, $16,500 would mean $19,800 repaid over roughly 4 months: 84 daily payments of about $236.
That works out to about $4,950 a month, or 5.3% of the $94,000 this business deposits monthly, and the total cost of the money is $3,300. Peak-season sales cover the payments, and the term ends during the season.
For comparison, repaying the same $19,800 over 2 months would lift the monthly outlay to about $9,900, or 10.5% of deposits, and whether the faster payoff is worth that bigger payment depends on how steady your slow months are.
| Average monthly deposits | $94,000 |
|---|---|
| Amount funded | $16,500 |
| Factor rate (illustrative) | 1.20 |
| Total repaid | $19,800 |
| Cost of the funding | $3,300 |
| Term | about 4 months |
| Daily payment (84 payments) | $236 |
| Payments as a share of deposits | 5.3% |
Who working capital fits
Usually a fit
- Bars with seasonal stock-ups
- Owners not yet qualified for a line
- Operators wanting a fixed cost
When it may not be the right move
- Businesses with a line for recurring purchases
- Owners with reserves
- Businesses without deposit history
What you’ll typically need
- Recent business bank statements
- Business details
Frequently asked questions
Is a line cheaper?
Often if you qualify and use it briefly.
Can I get a line with lower credit?
It can be harder; working capital may be easier.
How long does approval take for a seasonal stock-up?
Requests to fund a seasonal stock-up usually get a decision the same day when the file is complete, and funding commonly follows in a business day or two.
What credit score do I need to fund a seasonal stock-up?
For a seasonal stock-up, owners with scores from 500 can be considered because recent deposits carry the most weight, and stronger credit usually earns a lower cost and a larger offer.
Comparing options?
Apply and see your offer.
Updated October 6, 2026