Business Line of Credit Guide
A business line of credit gives businesses access to funds they can draw as needed and reuse as they repay. Monthly payments — principal plus a monthly fee — are automatically collected based on the outstanding balance at the time of each draw.
This guide covers everything you need to know to evaluate and launch a business line of credit on your platform — from eligibility and underwriting to offer structure, lifecycle, and integration paths.
Value for Small Businesses
- Reusable credit. Draw funds anytime up to the limit. Reuse without reapplying.
- No draw or prepayment fees. No extra cost to access funds or pay off a balance early.
- Predictable payments. Pay a portion of your total balance and a fixed fee percentage — automatically withdrawn each month.
Value for Platforms
- Customer retention. Deepen your platform's value by giving small businesses access to the working capital they need — without leaving your product.
- New revenue stream. Earn a share of every draw made by an active borrower.
- Fully managed. Unit handles the heavy lifting for you, including underwriting, servicing, support, and collections.
This guide covers everything you need to know to evaluate and launch an business line of credit on your platform — from eligibility and underwriting to offer structure, lifecycle, and integration paths.
Eligibility & Coverage
Unit's business line of credit is available to a broad range of small businesses. Before launching a line of credit program on your platform, you'll want to assess how much of your customer base is likely to qualify.
Business Eligibility
To apply for a line of credit, a business should meet the following baseline criteria:
- Entity type: Commercial business - corporations, LLCs, partnerships, or sole proprietors may apply
- U.S. operating address: Primary business address in the United States
- Time in business: Minimum 1 year, with stronger offers typically extended to businesses with 3+ years of operating history
- Annual revenue: Minimum $100,000, with better terms generally available to businesses above $200,000
- Applicant: The primary applicant must be an owner or control person of the business, at least 18 years old, and a U.S. citizen
- Credit score: Primary applicant must have a minimum consumer FICO score of 680
Industry and Geographic Eligibility
The line of credit is available across most industries and U.S. states, with some exceptions.
Businesses in the following industries are not eligible:
- Motor vehicle dealers
- Finance & insurance
- Non-profits
- Gambling, tobacco, firearms, or marijuana
Some industries are eligible but may receive more limited offers, including businesses in:
- Construction
- Real estate
- Transportation
- Retail
- Accommodation & Food Services
Geographic availability covers most U.S. states, though the following restrictions apply:
- Not available in Nevada for any business type
- Not available to sole proprietors in Michigan, Nebraska, New York, or West Virginia
Coverage Testing
Unit can help you evaluate how many of your customers meet the minimum qualification criteria to apply for a line of credit and estimate their maximum line of credit amount. To do so, we'll need some basic anonymized data in the format of this template.
The criteria above represent minimum eligibility requirements. Businesses that meet these thresholds will proceed to underwriting, where a more comprehensive review of personal and business credit history and overall financial condition is conducted. Additional factors assessed during underwriting may affect whether a business ultimately qualifies for a line of credit offer. See Underwriting in the Line of Credit Lifecycle section for more detail.
Line of Credit Lifecycle
Landing Page
The line of credit experience begins with a dedicated landing page that highlights key product features, summarizes the minimum eligibility requirements, answers frequently asked questions, and invites eligible customers to apply.
Application
Customers complete a white labeled application for a business line of credit, through the embedded platform experience or a Unit-hosted experience, depending on your integration path. Applicants provide basic business information and digitally link one or more bank accounts, rather than providing paperwork for underwriting.
Applicants will receive a white labeled email when their application decision or next steps are ready.
Underwriting
Applications are evaluated by an automated underwriting model that assesses three dimensions: cash flow and financial condition (using linked bank account transaction history, revenue, average balances, NSFs, and outstanding debt); business credit history; and the personal credit history of the primary applicant. Line of credit underwriting looks for stable, non-delinquent credit profiles free of active tax liens, judgments, bankruptcies, or collections.
Additionally, standard identity and business verification and fraud screening checks are completed at this stage. While most applications are processed automatically, some may be subject to manual review and additional documentary verification.
Offer
When an application is approved, a line of credit offer appears to the applicant through the embedded platform experience or the Unit-hosted experience (depending on your implementation path), and they receive a branded email with a link to review it. The offer details their approved credit line, repayment term, monthly fee, and commitment fee — see Line of Credit Offer Structure for more detail.
Offers expire after 30 days. Applicants who don't accept within that window will need to reapply.
Upon acceptance, the applicant receives a secure link to review and sign their line of credit agreement. Once all parties have signed, the line of credit is booked and activated. The customer is notified by email with a link to access their line of credit management dashboard and make their first draw through the embedded platform experience or the Unit-hosted experience (depending on your implementation path).
Draws and Repayments
Customers manage their line of credit through a real time line of credit management dashboard. From the dashboard, customers can draw funds, make additional payments, and view their available and used credit, next payment information, linked bank account, line of credit terms, and full transaction history.
Making a draw
Customers can request a draw from their dashboard. The minimum draw amount is $1,000. Once submitted, draws are reviewed and processed within 1–3 business days and deposited via ACH credit to the customer's linked bank account.
Automated Repayments
Monthly payments are automatically collected via ACH debit to the customer's linked bank account. The upcoming payment amount and due date is visible in the dashboard.
Monthly payments are calculated at the time of each draw and consist of two components:
- Principal payment — the outstanding balance divided by the repayment term
- Monthly fee — the outstanding balance at the time of the last draw multiplied by the monthly fee percentage
The monthly payment amount remains fixed until the customer makes a new draw, at which point it is recalculated based on the new balance. The repayment term starts over after each new draw.
Example 1: First draw on a new line of credit
A customer with a $25,000 credit line and a 12-month repayment term submits their first draw of $10,000. Their monthly fee percentage is 2%.
| Component | Calculation | Amount |
|---|---|---|
| Principal payment | $10,000 / 12 months | $833.33 |
| Monthly fee | $10,000 × 2.00% | $200.00 |
| Monthly payment | $833.33 + $200.00 | $1,033.33 |
Example 2: Subsequent draw on an existing balance
Three months into their repayment term, the customer has made three payments and their outstanding balance is $7,500. They submit a second draw of $5,000, bringing their new balance to $12,500.
| Component | Calculation | Amount |
|---|---|---|
| Principal payment | $12,500 / 12 months | $1,041.67 |
| Monthly fee | $12,500 × 2.00% | $250.00 |
| Monthly payment | $1,041.67 + $250.00 | $1,291.67 |
Example 3: Using a small draw to lower the monthly payment
Six months into their repayment term, the customer has made 6 payments and their outstanding balance is $6,250. They submit a draw of $1,000, bringing their new balance to $7,250.
| Component | Calculation | Amount |
|---|---|---|
| Principal payment | $7,250 / 12 months | $604.17 |
| Monthly fee | $7,250 × 2.00% | $145.00 |
| Monthly payment | $604.17 + $145.00 | $749.17 |
Despite making a new draw, the monthly payment dropped from $1,291.67 to $749.17 — because the new balance of $7,250 is lower than the $12,500 balance at the time of the previous draw, and the 12 month repayment term has started fresh.
Additional Payments
Customers can make additional payments in the dashboard, to pay down their balance faster.
Outside the billing cycle
Payments made outside of the 7-day window before a scheduled payment date are applied as principal-only reductions. They do not replace or change the regular monthly payment, but they shorten the overall repayment term — meaning the customer pays fewer months of monthly fees.
Within the billing cycle
Payments made within 7 days of a scheduled payment date are applied toward that month's payment:
- If the payment is equal to or greater than the monthly payment, no additional debit is made on the payment date
- If the payment is less than the monthly payment, the remaining balance is debited on the scheduled payment date
Early payoff
Customers can pay off their balance at any time. The monthly fee for the current period is applied in full and is not prorated. However, customers who pay off early are only responsible for fees accrued through their actual payoff date — not for the full remaining term.
Support
Unit and its lending partner handle customer support for line of credit customers. Line of credit customers can reach support by email or phone, Monday through Friday, 9:00 AM – 6:00 PM EST. Contact information is surfaced directly in the line of credit dashboard via a support widget, so customers always have easy access to help without leaving your platform.
Collections
If a line of credit account becomes delinquent, Unit's lending partner handles the collections process. The collections team may reach out to customers directly to provide options to reprocess a payment or discuss other arrangements, including modified payment plans for customers experiencing financial hardship. Customers who anticipate falling behind on payments can reach out to the collections team by calling the phone number provided in the dashboard support widget.
Credit Risk
The platform bears no credit risk. Unit and its lending partner assume full responsibility for losses in the event of default.
Line of Credit Offer Structure
Line of credit offers are presented to applicants after an application is approved. Terms and conditions are memorialized in the line of credit agreement that the applicant must sign to accept their line of credit offer.
Each line of credit offer is composed of the following terms. Actual values are determined during underwriting and will vary by applicant.
Key Terms
| Term | Range | Description |
|---|---|---|
| Credit line amount | $10,000 – $150,000 | The total amount of credit approved for the customer to draw against |
| Repayment term | 12 – 24 months | The amount of time the customer has to repay their balance. Resets with each new draw |
| Monthly fee | 2% – 4% | A fixed percentage of the outstanding balance at the time of each draw, charged monthly |
| Commitment fee | 0% – 2% | A one-time fee calculated as a percentage of the credit line amount, debited from the customer's linked bank account at the time the agreement is signed |
| Minimum draw | $1,000 | The minimum amount a customer can draw at any one time |
Key Definitions
| Term | Definition |
|---|---|
| Balance | The total amount currently drawn and outstanding |
| Available credit | The portion of the credit line that is available for the customer to draw against — credit line amount minus balance |
| Next payment amount | The amount of the next automated monthly payment |
| Next payment date | The date on which the next automated monthly payment will be debited |
Security & Legal Requirements
Personal Guarantee
A personal guarantee is required from the primary applicant, who must be an owner of the business. In some cases, additional business owners may be required to serve as co-guarantors on the line of credit. All guarantors will be contacted to sign the line of credit agreement before the line of credit is booked and activated.
UCC Lien
A UCC-1 blanket lien is filed against the business's assets as a condition of the line of credit. This is stipulated in the line of credit agreement. The lien is released within 10 business days of the final payoff date when a line of credit is closed.