{"ok":true,"canonical_url":"https://dealroom.so/glossary/commercial-line-of-credit","api_url":"https://dealroom.so/api/public/glossary/commercial-line-of-credit","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-16","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"commercial-line-of-credit","term":"Commercial Line of Credit","group":"The loan itself","definition":"This is a flexible loan facility for businesses, allowing them to draw funds as needed up to a certain limit and repay them. It's used for working capital or short-term operational needs.","what_it_means":"While an SBA 7(a) loan is primarily for acquisition and long-term assets, a separate commercial line of credit can be vital for ongoing working capital needs post-acquisition, especially for seasonal businesses. Note that an SBA 7(a) loan generally cannot be used to pay off a separate commercial line of credit unless it's for specific eligible purposes like business debt refinancing under strict conditions.","url":"https://dealroom.so/glossary/commercial-line-of-credit","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"slug":"line-of-credit","term":"Line of credit","url":"https://dealroom.so/glossary/line-of-credit"},{"slug":"business-debt-refinancing","term":"Business debt refinancing","url":"https://dealroom.so/glossary/business-debt-refinancing"},{"slug":"seasonal-business","term":"Seasonal business","url":"https://dealroom.so/glossary/seasonal-business"}],"related_questions":[{"question":"Can I use a secured personal line of credit as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-a-secured-personal-line-of-credit-as-part-of-my-equity-injection"},{"question":"Can I use funds from a personal line of credit as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-personal-line-of-credit-as-part-of-my-equity-injection"},{"question":"Can funds from an unsecured personal line of credit be considered part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-an-unsecured-personal-line-of-credit-be-considered-part-of-my-equity-inject"},{"question":"Can funds from a home equity line of credit be used for my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-be-used-for-my-equity-injection"},{"question":"How does using funds from a home equity line of credit affect my down payment?","url":"https://dealroom.so/sba-7a/questions/how-does-using-funds-from-a-home-equity-line-of-credit-affect-my-down-payment"},{"question":"Can funds from a home equity line of credit be used for the down payment?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-be-used-for-the-down-payment"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Commercial Line of Credit","url":"https://dealroom.so/glossary/commercial-line-of-credit","source_type":"DealRoom Data"}}