Small business lines of credit are normally used for short-term needs such as working capital and seasonal cash flow needs. A line of credit offers small businesses convenience and flexibility to use the funds when and how they need them. They even permit companies to reuse their available credit as they pay down the line.

Small business lines of credit are often confused with small business loans. The difference is loans are available for larger needs such as business expansion, renovation, and/or major equipment purchases. With business loans, you'll know when your debt will be paid down, which in turn allow you to more accurately gauge when resources will be freed up for further expansion or equipment replacement.

Small business lines of credit will vary from one bank to the next. If you run a small business, you can generally apply for a line of credit up to $100,000, though some institutions might offer more or less. This is a revolving line of credit, with no fixed maturity; once approved, you won't have to apply again as long as your account is in good standing.

Prime interest rates on small business lines of credit can fall between 1.5 percent and upwards of 10 percent. It will all depend on the bank, as well as your personal and business credit evaluation. The minimum monthly payment, on average, is $10; this will be equal to the total of interest and fees, plus any past due amount.