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Business Credit Lines: Revolving Credit Solutions for Working Capital

Quick Overview — TD Business Central Revolving Credit

TD Business Central revolving credit lines provide Canadian businesses with on-demand access to working capital without the rigidity of fixed-term loans. Draw funds when you need them, repay when cash flow allows, and only pay interest on the outstanding balance. Available in secured and unsecured configurations from $50,000 to $10 million, these facilities serve as both a growth accelerator and a financial safety net for businesses navigating seasonal revenue cycles, delayed receivables and unexpected capital needs.

Cash flow is rarely linear. Receivables arrive 60 days late. A major client delays payment. A critical piece of equipment fails and needs immediate replacement. These are not hypothetical scenarios — they happen to Canadian businesses every week, and the companies that survive them are the ones with pre-arranged access to capital.

TD Business Central revolving credit lines exist precisely for these moments. Unlike term loans that deposit a lump sum and start charging interest immediately, a credit line sits available until you need it. Draw $20,000 today, repay $15,000 next week, draw $50,000 next month. The flexibility is the product.

How Revolving Credit Works Through TD Business Central

A revolving credit facility functions like a reservoir of pre-approved capital. You draw from it when needed and replenish it when cash flow recovers. The credit limit resets as you repay, creating a perpetual source of liquidity.

Draw and Repayment Mechanics

Initiating a draw takes less than two minutes through the TD Business Central dashboard. Select your credit line, enter the draw amount, confirm the destination account and authorize. Funds appear in your operating account within minutes during business hours. There is no minimum draw requirement and no fee per draw on most facility types.

Repayments are equally straightforward. Make lump-sum payments, set up automatic minimum payments, or configure custom repayment schedules that align with your receivables cycle. Every dollar repaid immediately increases your available credit. A $500,000 facility with $200,000 outstanding has $300,000 available — draw it tomorrow if needed.

The FCAC business credit guide recommends that businesses understand the full cost of revolving credit before committing. TD Business Central provides a real-time interest calculator within the dashboard that shows projected costs based on your current balance and anticipated draw schedule.

Interest-Only Payment Periods

During growth phases or seasonal downturns, cash preservation matters more than principal reduction. TD Business Central credit lines offer interest-only payment periods of up to 12 months, allowing businesses to minimize monthly obligations while maintaining full access to their credit facility.

Interest-only periods are not automatic — they are negotiated at facility setup or renewal based on your business circumstances. A landscaping company might request interest-only payments from November through March when revenue drops 70%. A manufacturer might use interest-only during a facility expansion that temporarily reduces cash flow. The structure adapts to your operating reality.

When the interest-only period ends, the facility reverts to standard blended payments that include both principal and interest. Your commercial banking advisor can model different repayment scenarios to help you plan the transition.

Credit Line Products at a Glance

TD Business Central offers four distinct credit line products, each targeting specific business scenarios. Review the comparison below to identify which facility type aligns with your working capital requirements.

Feature Operating Line Seasonal Facility Secured Revolver Asset-Based Line
Credit Limit $50K – $500K $100K – $2M $250K – $5M $500K – $10M
Interest Rate Prime + 1.5% – 3.5% Prime + 1.0% – 2.5% Prime + 0.75% – 2.0% Prime + 0.5% – 1.75%
Security Required Personal guarantee Inventory / receivables Real estate / equipment A/R + inventory margining
Interest-Only Option Up to 6 months Up to 12 months Up to 12 months Ongoing (revolving)
Overdraft Protection Yes No Yes Yes
Annual Review Yes Yes Yes Monthly margining
Setup Fee $0 – $500 $500 – $1,500 $1,000 – $5,000 $2,500 – $10,000
Best For Day-to-day cash gaps Cyclical businesses Capital-intensive ops High-volume distributors

Rates shown are indicative ranges as of March 2026. Actual rates depend on creditworthiness, collateral and overall banking relationship. The Bank of Canada publishes current prime rate information that influences all variable-rate facilities.

Overdraft Protection: Your Financial Safety Net

A single NSF charge on a vendor payment can damage a supplier relationship that took years to build. TD Business Central overdraft protection ensures your operating account never bounces a payment due to a temporary cash shortfall.

Automatic Balance Coverage

When your linked operating account balance drops below zero, TD Business Central automatically draws from your credit line to cover the shortfall. The draw happens instantly — no delay, no declined payment, no NSF fee. Your vendor gets paid. Your payroll clears. Your pre-authorized debits process normally.

The overdraft draw is reversed automatically when incoming deposits bring your operating account back to a positive balance. You only pay interest on the overdraft amount for the days it was outstanding. For a business that occasionally experiences 2-3 day cash flow gaps between receivables and payables, the annual cost of overdraft protection is typically a fraction of what NSF fees and damaged supplier relationships would cost.

Configurable Overdraft Limits

Not every overdraft scenario deserves the same treatment. TD Business Central lets you set a maximum overdraft threshold that determines how much the system will automatically cover. A $50,000 threshold means any shortfall up to $50,000 is covered silently. A shortfall exceeding the threshold triggers an alert and requires manual authorization.

This tiered approach prevents runaway overdrafts while still protecting routine cash flow gaps. Your account alerts configuration can include notifications every time overdraft protection activates, giving your treasury team real-time visibility into the frequency and magnitude of cash shortfalls.

When Businesses Use Revolving Credit Lines

Credit lines are not emergency instruments — they are strategic tools. The most financially disciplined businesses maintain credit facilities specifically to exploit opportunities and manage timing mismatches.

Seasonal Inventory Financing

Retailers, agricultural suppliers and tourism operators face predictable revenue cycles. A garden centre generates 65% of annual revenue between April and July but must purchase inventory in February. A seasonal credit facility bridges the gap, providing capital for inventory acquisition months before the selling season begins.

TD Business Central seasonal facilities are specifically structured for this use case. Higher limits during peak purchasing months, reduced limits during off-season, and interest-only payments when revenue is lowest. The facility breathes with your business cycle instead of fighting against it.

Receivables Bridge Financing

Businesses that invoice on net-30 or net-60 terms often face a structural timing gap. You deliver the service today. The client pays in 60 days. Your employees, suppliers and landlord expect payment in 30. A revolving credit line fills the gap without requiring you to pressure clients for faster payment or discount invoices for early collection.

For businesses with strong receivables portfolios, an asset-based line provides even more capacity. TD Business Central can margin your accounts receivable at up to 80% of eligible balances, creating a credit limit that grows as your business grows. Combined with term loans for fixed asset purchases, this creates a comprehensive capital structure.

Related Credit & Financing Services

Revolving credit lines work best as part of a broader capital strategy. Combine with term financing, corporate cards and savings products to optimize your business's financial position.

Business Credit Cards

Manage employee spending with TD Business Central corporate cards. Automated expense reporting, tiered rewards and granular spending controls complement your credit line for day-to-day operational expenses.

Loans & Leases

For capital expenditures that require structured repayment, TD Business Central term loans and leases provide fixed-schedule financing with predictable monthly obligations.

Savings & GICs

Park surplus cash in TD Business Central savings accounts and GICs to earn interest while maintaining liquidity. Sweep account arrangements can automatically move idle funds between operating and savings accounts.

Frequently Asked Questions About Business Credit Lines

Qualification is based on your business's financial health, operating history and credit profile. Generally, TD Business Central requires a minimum of two years in business, annual revenue of at least $500,000, and a satisfactory business credit score. You will need to provide two years of financial statements, a current accounts receivable aging report, and details of existing debt obligations. Startups under two years may qualify with strong personal guarantees and collateral.

Interest rates are set as a margin above the TD Prime Rate, which is influenced by the Bank of Canada overnight rate. Your specific margin depends on your business credit profile, the credit line amount, collateral provided, and your overall banking relationship with TD. Secured credit lines typically receive lower margins than unsecured facilities. Rates are reviewed annually at renewal and may be adjusted based on changes to your financial position.

Draws can be initiated through the TD Business Central dashboard, by phone, or through automatic overdraft protection triggers. Online draws are processed immediately during business hours and deposited into your linked operating account. You can draw any amount up to your available credit limit, and there is no minimum draw requirement. Repayments can be made at any time, and repaid amounts become available for future draws immediately.

TD Business Central credit lines are typically reviewed annually. Your commercial banking advisor will request updated financial statements 60-90 days before the renewal date. If your business remains in good financial standing, the renewal process is largely administrative. Credit limits may be increased or decreased based on your current financial position, and the interest rate margin may be adjusted. You will receive written confirmation of renewed terms at least 30 days before the existing facility expires.

Yes. TD Business Central allows you to link a revolving credit line to your operating account as overdraft protection. When your account balance drops below zero, funds are automatically drawn from the credit line to cover the shortfall. This prevents NSF charges on outgoing payments, cheques and pre-authorized debits. The overdraft draw is reversed automatically when deposits bring your operating account back to a positive balance.

Secure Your Working Capital Facility Today

TD Business Central credit lines are available to businesses with an active TD commercial banking relationship. Speak with a commercial banking advisor to structure a revolving facility that matches your cash flow patterns and growth trajectory.

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