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Bair; Federal Reserve Chairman Ben S.
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Zero working capital tries to minimize the working capital deployed in the cash conversion cycle to the extent possible, and if possible, continuing the process without any working capital at all. As with credit cards, with a business line of credit you do not pay interest on unused portions of the credit limit your given. Only once you draw from your line of credit will you be charged interest. Unlike with credit cards, when you draw against your credit line that draw must be paid back within the term. Small business credit lines come with terms ranging from 6 months to 5 years. Your payments will reflect an amount equal to pay off your outstanding balance plus interest within the term.