A business line of credit can be a great way to finance your startup business, offering flexibility and a renewable funding source. But newer businesses may have a more difficult time meeting the criteria needed to qualify. Consider these lenders that offer business lines of credit to help you start or grow your new business.
Looking for a startup business line of credit (LOC) on your own can be daunting. So, if you'd rather not do the comparison shopping yourself, a marketplace like Lendio can do the work for you. It's a network of more than 75 lenders, including many that offer business lines of credit ranging from $1,000 to $500,000. Rates start as low as 8%.
Apply online and prequalify with a soft credit check to review multiple options for a business line of credit. If approved, you could receive funding within one to two business days. But Lendio seems to require more documentation than other lenders, and rates might be high for some startup businesses.
Loan amount
$1,000 to $250,000
APR
Varies by lender
Min. Credit Score
560
Looking for a startup business line of credit (LOC) on your own can be daunting. So, if you'd rather not do the comparison shopping yourself, a marketplace like Lendio can do the work for you. It's a network of more than 75 lenders, including many that offer business lines of credit ranging from $1,000 to $500,000. Rates start as low as 8%.
Apply online and prequalify with a soft credit check to review multiple options for a business line of credit. If approved, you could receive funding within one to two business days. But Lendio seems to require more documentation than other lenders, and rates might be high for some startup businesses.
Pros
Lines of credit of up to $500,000
LOC rates start as low as 8%
Multiple lenders to choose from
Cons
Rates could go as high as 60%
Some lenders require two years in business
May require more documentation than other lending sources
Loan amount
$1,000 to $250,000
APR
Varies by lender
Min. Credit Score
560
Loan term
6 to 18 months
Requirements
6 months in business, $50,000 in annual revenue, 600 credit score
American Express business lines of credit can be a solid option for startup businesses because it only requires $3,000 a month in revenue. This amount is much lower than most lenders' minimum revenue requirements. It also offers a fast application process and flexible loan terms of 6 to 24 months.
But you'll need at least one year in business and a credit score of 660 to qualify. American Express also charges monthly fees that vary depending on your loan term.
Loan amount
$2,000 to $250,000
Min. Credit Score
660
American Express business lines of credit can be a solid option for startup businesses because it only requires $3,000 a month in revenue. This amount is much lower than most lenders' minimum revenue requirements. It also offers a fast application process and flexible loan terms of 6 to 24 months.
But you'll need at least one year in business and a credit score of 660 to qualify. American Express also charges monthly fees that vary depending on your loan term.
Pros
Low monthly revenue requirements
Lines of credit up to $250,000
Flexible loan terms
Cons
Requires credit score of 660+
Business must be at least one year old
Charges monthly fees
Loan amount
$2,000 to $250,000
Min. Credit Score
660
Loan term
6, 12, 18 or 24 months
Requirements
1 year in business, valid business checking account
The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
All businesses are unique and are subject to review and approval.
American Express® Business Line of Credit offers two loan types, installment loans and single repayment loans for eligible borrowers. All loan term types, loan term lengths, and pricing are subject to eligibility requirements, application, and final approval. This article contains general information about the American Express® Business Line of Credit installment loan type only.
After a quick online application, Bluevine can give you a decision in as little as five minutes after applying, so you know where you stand right away. Its startup business lines of credit go up to and, unlike some of its competitors, it doesn't charge maintenance fees. It also allows for unlimited transactions, although you may be subject to some limitations based on your checking account restrictions.
To qualify for a Bluevine business line of credit, you'll need at least one year in business, $10,000 in monthly revenue and a minimum 625 credit score. And Bluevine accepts only corporations or LLCs, so sole proprietorships may not qualify.
Loan amount
Up to $250,000
Min. Credit Score
625
After a quick online application, Bluevine can give you a decision in as little as five minutes after applying, so you know where you stand right away. Its startup business lines of credit go up to and, unlike some of its competitors, it doesn't charge maintenance fees. It also allows for unlimited transactions, although you may be subject to some limitations based on your checking account restrictions.
To qualify for a Bluevine business line of credit, you'll need at least one year in business, $10,000 in monthly revenue and a minimum 625 credit score. And Bluevine accepts only corporations or LLCs, so sole proprietorships may not qualify.
Pros
Fast approval process
No maintenance fees
Unlimited transactions (subject to approval)
Cons
Must be in business for at least one year
Only LLCs and corporations accepted
Minimum 625 credit score
Loan amount
Up to $250,000
Min. Credit Score
625
Loan term
Up to 12 months
Requirements
1 year in business, corporation or LLC, 625 FICO score, $480,000 in annual revenue, no bankruptcies
Most lenders that offer startup business lines of credit require at least a 600 credit score, but Clarify Capital accepts scores as low as 550. And, you'll only need to be in business for at least six months, which is less than many lenders.
It doesn't charge prepayment penalties, and rates start as low as 5%, but you'll need a good credit score to qualify for a rate that low. Clarify Capital doesn't disclose any additional fees or its loan terms.
Loan amount
Up to $5 million
APR
As low as 5%
Min. Credit Score
550
Most lenders that offer startup business lines of credit require at least a 600 credit score, but Clarify Capital accepts scores as low as 550. And, you'll only need to be in business for at least six months, which is less than many lenders.
It doesn't charge prepayment penalties, and rates start as low as 5%, but you'll need a good credit score to qualify for a rate that low. Clarify Capital doesn't disclose any additional fees or its loan terms.
Pros
Credit lines of up to $5 million
Accepts 550+ credit scores
Only six months in business required
Cons
Low credit scores won't qualify for the best rates
May charge additional fees
Doesn't state its loan terms on website
Loan amount
Up to $5 million
APR
As low as 5%
Min. Credit Score
550
Requirements
6 months in business, 550+ credit score
Loan amount
Up to $5 million
APR
As low as 5%
Min. Credit Score
550
Best for brand-new businesses
Guidant Financial business loans
4
★★★★★
Finder score
When you're just getting off the ground, qualifying for traditional business loans can be tough. But Guidant Financial has a somewhat unique solution with its portfolio loan. It functions much like a business line of credit, where you only pay interest on the funds you use.
Portfolio loans — also known as stock loans or security-based lending — essentially use your retirement account as collateral for a line of credit. Rates start as low as 3% to 4%, and the loan process takes about two weeks. However, you'll need at least $85,000 in eligible retirement funds to qualify, and there's a flat fee of 4% to facilitate the loan.
Loan amount
Up to 80% of your account balance
APR
As low as 3%
Min. Credit Score
None
When you're just getting off the ground, qualifying for traditional business loans can be tough. But Guidant Financial has a somewhat unique solution with its portfolio loan. It functions much like a business line of credit, where you only pay interest on the funds you use.
Portfolio loans — also known as stock loans or security-based lending — essentially use your retirement account as collateral for a line of credit. Rates start as low as 3% to 4%, and the loan process takes about two weeks. However, you'll need at least $85,000 in eligible retirement funds to qualify, and there's a flat fee of 4% to facilitate the loan.
Pros
Offers security-based lending
Rates start at 3%
Good for firms that have less than six months in business
Cons
Must have at least $85,000 in eligible investments
Requires a flat fee of 4%
Funding not as fast as other options
Loan amount
Up to 80% of your account balance
APR
As low as 3%
Min. Credit Score
None
Loan amount
Up to 80% of your account balance
APR
As low as 3%
Min. Credit Score
None
Best for more established businesses
Idea Financial lines of credit
3.9
★★★★★
Finder score
If you've been in business for at least three years, you may qualify for up to a line of credit from Idea Financial. Unlike some lenders, it doesn't charge origination fees, prepayment penalties or maintenance fees.
It offers flexible repayment terms of up to 18 months but charges withdrawal fees. To qualify, you must have at least a 650 credit score and $15,000 or more in monthly revenue. Nonprofits and sole proprietorships are not eligible.
Loan amount
Up to $275,000
Min. Credit Score
650
If you've been in business for at least three years, you may qualify for up to a line of credit from Idea Financial. Unlike some lenders, it doesn't charge origination fees, prepayment penalties or maintenance fees.
It offers flexible repayment terms of up to 18 months but charges withdrawal fees. To qualify, you must have at least a 650 credit score and $15,000 or more in monthly revenue. Nonprofits and sole proprietorships are not eligible.
Pros
Up to credit line
No origination, prepayment or maintenance fees
Flexible repayment terms
Cons
Charges draw fees
Requires 650 credit score
Need $15,000+ in monthly revenue
Loan amount
Up to $275,000
Min. Credit Score
650
Loan term
Up to 18 months
Requirements
2 years in business, $15,000 in monthly revenue, 650 credit score, no sole proprietorships or nonprofits
Loan amount
Up to $275,000
Min. Credit Score
650
Methodology: How we choose these lenders
Finder’s business loan experts analyzed dozens of lenders offering business lines of credit for startups and newer businesses. We ultimately chose lenders that offer more lenient requirements than traditional business loans and are willing to work with newer businesses and owners with, potentially, lower credit scores and less revenue.
Some of the criteria we evaluate include:
Interest rates
Additional fees
Loan amounts
Loan terms
Repayment plans
Turnaround times
Credit score requirements
Time in business requirements
Revenue requirements
Reputation of the lender
Finder also maintains strict editorial integrity and independence. Our content and suggestions are fair, accurate and trustworthy, and our advertisers or partners don’t influence our opinions. To learn more, check out our editorial guidelines here.
How to compare startup business lines of credit
Consider these factors when choosing the best business line of credit for your company:
Rates. Interest rates can vary widely depending on the lender. Be sure to check with multiple lenders to find the best line of credit rates.
Fees. Most lenders that offer startup business lines of credit charge some types of fees, including origination, maintenance and draw fees. To save money, look for lenders that have minimal fees.
Lender requirements. To qualify for a business line of credit, lenders typically have minimum revenue and time in business requirements. Be sure you meet the criteria of lenders you’re interested in.
Turnaround times. Funding for business lines of credit is often quicker than for other loan types, but some lenders may take longer to give you access to credit.
Loan terms. Startup business lines of credit typically have shorter terms than other types of business loans — and may require weekly repayments — so make sure your budget can handle the repayment schedule.
What is a business line of credit, and how does it work?
A business line of credit is a revolving line of credit similar to a credit card. It gives you access to a set amount of funds, but you only pay interest on the money you use. Business lines of credit can be found at banks, credit unions or online lenders. These loans may be secured or unsecured LOCs, and some don’t require a personal guarantee.
When you get a business line of credit, you’ll be approved for a preset line of credit limit up to $500K or more. As you need funding, you can draw on those funds as often as needed, as long as you don’t exceed the limit. And, unlike other business loans, you only have to pay interest on the funds you use. And as you make payments, your funds are replenished.
Most business lines of credit lenders have flexible repayment terms. Typically, you only have to make interest payments during the draw period, although you also have the option to pay more, saving yourself on interest charges in the long run. Lines of credit generally have short loan terms of two years or less.
Pros and cons of startup business lines of credit
Consider the risks and rewards of a business line of credit before deciding if it’s the right type of financing for your business.
Pros
Only borrow what you need
Renewable access cash flow
Easier to qualify for than some business loans
Helps to build business credit
Cons
May include numerous fees
Interest rates may be higher than other loan options
Typically have short loan terms
Some require weekly repayments
Compare other startup business loans
Consider other lenders that offer loans for startup businesses.
Retail businesses or others that have a lot of credit card sales
How to qualify for startup business lines of credit
Most lenders that offer startup business lines of credit are usually focused on your credit score, how long you’ve been in business and how much revenue you take in.
Time in business. Lenders generally want to see that you’ve been in business for at least six months, although some may require two or more years in business to qualify.
Revenue. Monthly or annual minimum revenue requirements can vary significantly by lender and affect the size of your credit line. You’ll usually need at least $10,000 in monthly revenue, although some lenders — like American Express — only require $3,000 a month.
Credit score. You’ll most likely need a minimum score of 600 or higher, but some lenders may consider lower scores.
Business bank account. Most lenders require you to have an open and active business checking account. They may want to verify your banking activity, use it to deposit funds or take out automatic repayments.
Some lenders offering no doc lines of credit may require less paperwork or be able to access your financial information by connecting to your bank account.
How to apply for a startup business line of credit
The exact process to get a startup business line of credit may vary depending on the lender, but the basic steps are similar:
Decide how much you need. Define your plans for the credit line and how much you think you’ll need.
Assess your budget. Figure out how much you can afford in repayments, keeping in mind that some lenders may require weekly or bi-weekly payments.
Check your credit. Checking your credit score before applying for any type of business financing can help guide you toward lenders that accept borrowers in your credit range. You can also make sure your credit report is accurate.
Compare lenders. It’s always a smart move to compare rates, fees and loan terms from multiple lenders so you can find the best deal.
Research requirements. Check out lender requirements before you apply to make sure you qualify. For example, if you’ve only been in business for six months, you’ll need to find lenders that consider new businesses.
Gather your documents. Find out which documents you’ll need to submit so you’re prepared to apply.
Apply. Once you’re ready, choose a lender and follow the instructions to apply for your line of credit, submitting any required documents.
Alternatives to business lines of credit
If you don’t qualify for a business line of credit or just want to explore your options, consider these alternatives:
Business credit card. Credit limits for business credit cards aren’t normally as high as lines of credit, but they may be easier to qualify for.
Personal line of credit. If you don’t have the necessary requirements for a business line of credit, you may qualify for a personal line of credit instead.
Personal loan. Many business owners fund their companies with personal loans, which are generally easier to qualify for than business lines of credit.
Home equity line of credit (HELOC). If you own your home, you may want to look into a HELOC, a line of credit that borrows against your home’s equity. Or, you could get a home equity loan that also uses your home as collateral but provides the funds in a lump sum.
Personal credit cards. Rates are high for credit cards, and credit limits are typically lower than business lines of credit. But, if you qualify for a card with a 0% introductory rate, you could fund your business with interest-free financing for up to 18 months or more.
Frequently asked questions
Can startups get a line of credit?
It can be more difficult to qualify for a line of credit when you’re a newer business. But, some lenders are willing to work with those that haven’t been operating for very long and may have more lenient revenue and time-in-business requirements.
What is the minimum credit score for a business line of credit?
Credit score requirements can vary widely, although most lenders require a credit score of at least 600 to qualify. But some lenders accept lower scores.
Can I get a line of credit to start a business?
If your business hasn’t opened yet, you may need to consider alternative lending sources, such as lenders that offer portfolio loans, which use your retirement funds as collateral for a line of credit. Or, you could check with your bank about opening up a personal line of credit to fund your new business.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf. See full bio
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