Straight answers.

Interest accrues only on the portion of your limit you've drawn, not the full amount sitting available. Most lenders calculate it daily — your rate divided by 365, applied to whatever balance is outstanding that day. Draw $20,000 against a $100,000 limit and the untouched $80,000 costs nothing. Repay a chunk and the daily charge drops immediately, the same day.

A term loan hands you a lump sum once, and you owe interest on the whole thing from day one, whether you've deployed it or not. A line stays open: you draw only what you need, when you need it, and interest only follows the drawn balance. Once a term loan is repaid it's closed — a line just refills and is ready again.

Both revolve, but a line of credit typically carries a lower rate, a higher limit, and funds as a direct transfer to your bank account rather than a card swipe. Cards are built for smaller, everyday purchases; a line is sized for working-capital moves — payroll, inventory, bridging a slow receivable. Some businesses use both for different jobs.

There's no flat formula. Underwriting weighs your revenue, how consistent your cash flow is month to month, existing debt obligations, time in business, and credit profile together. We wrote up the full breakdown in how lenders set your limit — worth reading before you apply so the number you see isn't a surprise.

Once a line is active, most draws land in your linked bank account within seconds to a few minutes. Larger draws can occasionally take until the next business morning to settle, but same-day is the norm rather than the exception. Speed is one of the clearest advantages over a term loan, which can take days to fund even after approval.

It depends on the lender. Some charge nothing on undrawn capacity — the line just sits there at zero cost. Others attach a maintenance or non-utilization fee on the portion you're not using. We don't assume either way for you; we show the full fee terms before you sign, so ask directly if it isn't already spelled out in the offer.

A soft pull lets us estimate your limit without touching your credit score at all — that's what checking your eligibility uses. A hard pull only happens at final approval, after you've reviewed and accepted an offer, and it can register on your credit report. You should never see a hard pull before you've agreed to move forward.

Repayment restores your available credit, typically the same day the payment clears. Repay $10,000 against a drawn balance and you have $10,000 of capacity back, ready to draw again — no new application, no waiting for a fresh approval. That refill is the core mechanic that makes a line different from a one-time loan.

Revolving credit — like a line — can be drawn, repaid, and drawn again indefinitely as long as the account stays open and in good standing. Non-revolving credit, like a term loan, pays out once and is finished once it's repaid; there's nothing left to draw a second time. A line's whole value is in that reuse.

Yes, plainly — lines of credit can be reduced or frozen if the lender sees a risk signal, such as a sharp revenue drop, missed payments, or a change in your credit profile. It isn't common on an account in good standing, but it isn't contractually impossible either. We'd rather tell you that upfront than have it surprise you later.

It varies by lender and by file, so we won't hand you a made-up minimum. What generally helps: a longer operating history and steadier monthly revenue tend to unlock larger limits and better terms, while a newer business with thinner numbers may still qualify, just for less. The clearest answer is to apply and see what your own numbers support.

Neither, exactly — Lumen is part of the Selective Capital network. Your application is reviewed by our desk and matched against funding options across the network rather than shopped out to a pile of outside brokers, and one person owns your file from first call to first draw. We won't call that "direct lender," because it isn't, but it is one desk, one point of contact, and one team accountable for your outcome.