[guided]This is the heart of Dirichlet's proof: showing that $L(\chi, 1) \neq 0$ for every non-principal character $\chi \pmod N$. We sketch the main idea — a full proof is given in the [Non-Vanishing of Dirichlet $L$-Functions at $s = 1$](/theorems/???).
First, we need to know that $L(\chi, 1)$ even makes sense. For non-principal $\chi$, the partial sums $S_M := \sum_{n \leq M} \chi(n)$ are bounded. Why? Because $\chi$ is periodic modulo $N$ and $\sum_{n \bmod N} \chi(n) = 0$ for non-principal $\chi$ (orthogonality), so full periods cancel to zero. The leftover partial period contributes at most $\sum_{n \leq N} |\chi(n)| \leq \varphi(N)$ terms, each of modulus at most $1$, so $|S_M| \leq \varphi(N)$ for all $M$.
By the [Dirichlet Test for Series](/theorems/???) (Abel summation plus boundedness of $S_M$ and monotonicity of $n^{-s} \to 0$), the series $\sum_n \chi(n) n^{-s}$ converges for every real $s > 0$. Taking the limit $s \to 1^+$, $L(\chi, 1)$ is well-defined as a convergent (conditionally) series.
Now for the non-vanishing. The standard argument: consider the product over all $\varphi(N)$ characters,
\begin{align*}
Z_N(s) := \prod_{\chi} L(\chi, s).
\end{align*}
A character identity plus positivity arguments show that $Z_N$ has non-negative coefficients as a Dirichlet series: $Z_N(s) = \sum_n a_n n^{-s}$ with $a_n \geq 0$ and $a_1 = 1$. In particular, $Z_N(s) \geq 1$ for all real $s > 1$, so $Z_N(s)$ does not approach $0$.
The non-vanishing argument: $L(\chi_0, s)$ has a simple pole at $s = 1$ with residue $\varphi(N)/N > 0$ (Step 3). Suppose, for contradiction, that for some non-principal $\chi$ we had $L(\chi, 1) = 0$. Then $L(\chi, s)$ would have a zero at $s = 1$ of order at least $1$. Since the conjugate character $\overline{\chi}$ satisfies $L(\overline{\chi}, s) = \overline{L(\chi, \bar{s})}$, it too would have a zero at $s = 1$ if $\chi$ is complex non-real. Counting: if $\chi$ is real (i.e. $\chi^2 = \chi_0$, $\chi \neq \chi_0$), then $L(\chi, s)$ has at most a single zero at $s = 1$; if $\chi$ is complex, $\chi \neq \overline\chi$ and both $L(\chi, 1), L(\overline\chi, 1) = 0$ gives two zeros. In both cases, the zeros of non-principal $L$-functions at $s = 1$ outnumber the single pole of $L(\chi_0, s)$, so $Z_N(s)$ tends to $0$ as $s \to 1^+$ — contradicting $Z_N(s) \geq 1$.
There is one subtle case left: a real non-principal character $\chi$ with $L(\chi, 1) = 0$. In this case only one factor vanishes, which exactly cancels the pole of $L(\chi_0)$, making $Z_N$ analytic and bounded at $s = 1$. Excluding this case requires a separate argument (the classical approach is via quadratic forms or via the explicit formula $L(\chi_{-N}, 1) = \pi h(-N)/\sqrt{N}$ for real odd $\chi$, which is strictly positive). We take this as an input: the [Non-Vanishing of Dirichlet $L$-Functions at $s = 1$](/theorems/???) establishes $L(\chi, 1) \neq 0$ for all non-principal characters.
Given this, $\log L(\chi, s) = \log L(\chi, 1) + o(1)$ as $s \to 1^+$ is a finite constant plus an error — in particular $\log L(\chi, s) = O(1)$.[/guided]