Access cash when you need it to cover short-term expenses.
A line of credit gives your business access to a specific amount of funds that it can withdraw from as needed. Typically it takes between a few hours and a few days for a withdrawal to appear in your business bank account.
Most lenders require small businesses to be open for at least one year to qualify for a loan. Find out what options are available for your business by selecting information about your time in business, credit score and funding needs.
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You can use a business line of credit for any situation where you have a small, short-term expense or need emergency funding. Here are some common reasons businesses use a line of credit:
Hire new employees
Purchase inventory
Fund an ongoing construction project
Bridge cashflow gaps while waiting for clients to fill invoices
Fund payroll during an off season
Cover reopening costs
Pay for an unexpected expense
Business line of credit requirements
Most lenders require small businesses to be open for at least one year and have an annual revenue of at least $100,000 — at a minimum. Most also require business owners to have good credit, or a personal credit score of at least 670. And many look at cash flow, collateral and your history of paying off business debts.
And there are options for businesses that don’t meet the standard credit or time in business requirements. But it can be difficult to qualify for a business line of credit if your business is less than one year old. Startups that need help with short-term expenses might want to consider a microloan instead. And while you can get a business line of credit with fair credit, your options are limited if you have a credit score below 580.
Document requirements
While it varies depending on the lender, most ask to see bank statements, business and personal tax returns and financial statements. Financial statements often includes profit and loss statements, balance sheets and anything else that can verify your business’s cash flow, assets and current debts.
Many lenders rely on your personal credit score when you apply. But some might ask to see a business credit report — especially if you’re applying for a larger line of credit from a bank.
Best business lines of credit
Our team reviewed over 220 business lenders before selecting these top picks for business lines of credit. We considered factors like interest rates, fees, credit limits and the time it takes to receive a withdrawal. We also made sure to include options available to businesses in different stages of growth and credit types.
Fundbox is one of the few online lenders that requires absolutely no paperwork during the application. Instead, FundBox asks small business owners for access to their accounting software. You can receive withdrawals as soon as the next business day and there's no penalty if you pay off your credit line before it's due. But it's not completely clear about how its pricing structure works — it doesn't specify if the rate it advertises is monthly or annual. And the maximum credit limit is also lower than you can find with other providers.
Loan amount
$1,000 – $150,000
APR
Not stated
Min. Credit Score
600
Fundbox is one of the few online lenders that requires absolutely no paperwork during the application. Instead, FundBox asks small business owners for access to their accounting software. You can receive withdrawals as soon as the next business day and there's no penalty if you pay off your credit line before it's due. But it's not completely clear about how its pricing structure works — it doesn't specify if the rate it advertises is monthly or annual. And the maximum credit limit is also lower than you can find with other providers.
Pros
No paperwork required
Funds available the next day
Fair credit OK
Cons
Weekly repayments
Higher cost for longer terms
Loan amount
$1,000 – $150,000
APR
Not stated
Min. Credit Score
600
Loan term
12 or 24 weeks
Requirements
$30,000+ in annual revenue, 3+ months in business, 600+ FICO credit score, business checking account
With over 75 partner lenders, Lendio is one of the largest online business loan marketplaces. By filling out its online form, you can prequalify with multiple providers and compare personalized offers. This can be particularly helpful if you have a low credit score or are in the startup phase of your business. Its partners offer business lines of credit with credit limits as high as $500,000 and rates from 8% to 24% APR. It typically takes a week or two to fund a business line of credit outright. But the time it takes to receive a withdrawal is likely faster.
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
With over 75 partner lenders, Lendio is one of the largest online business loan marketplaces. By filling out its online form, you can prequalify with multiple providers and compare personalized offers. This can be particularly helpful if you have a low credit score or are in the startup phase of your business. Its partners offer business lines of credit with credit limits as high as $500,000 and rates from 8% to 24% APR. It typically takes a week or two to fund a business line of credit outright. But the time it takes to receive a withdrawal is likely faster.
Pros
Credit limits as high as $500,000
Over 300 partner lenders
Compare multiple offers
Cons
Lower starting APRs available elsewhere
Potentially long turnaround on initial approval
Loan amount
$1,000 – $5,000,000
APR
Varies by lender
Min. Credit Score
580
Loan term
3 months to 25 years
Requirements
Operate business in US for 6 months or more, have a business bank account, minimum 580 personal credit score, at least $8,000 in monthly revenue.
You can apply for a business line of credit from BlueVine from your computer — or even your phone. It takes around five minutes to get approved and you can receive each withdrawal within a matter of hours — for a fee. Its low starting rates of 7.8% are comparable to a bank. And there are no monthly maintenance, withdrawal or origination fees. Business owners with fair credit and less than a year in business can also qualify. But some withdrawals might come with weekly repayments, which can be inflexible for businesses struggling with cash flow.
Loan amount
$5,000 – $250,000
APR
Starting at 7.8%
Min. Credit Score
625
You can apply for a business line of credit from BlueVine from your computer — or even your phone. It takes around five minutes to get approved and you can receive each withdrawal within a matter of hours — for a fee. Its low starting rates of 7.8% are comparable to a bank. And there are no monthly maintenance, withdrawal or origination fees. Business owners with fair credit and less than a year in business can also qualify. But some withdrawals might come with weekly repayments, which can be inflexible for businesses struggling with cash flow.
Pros
Same-day funding available
No origination, draw or maintenance fees
Accepts fair credit
Cons
Weekly repayments
Fee for same-day funding
Loan amount
$5,000 – $250,000
APR
Starting at 7.8%
Min. Credit Score
625
Loan term
6 or 12 months
Requirements
12+ months in business, $40,000+ in monthly revenue, 625+ credit score
Bank of America offers an unsecured business line of credit with a low starting rate of 7.25% and credit limits beginning at $10,000 — low for a bank. It's also easier for small businesses to qualify than with most banks, only requiring two years in business and $100,000 in annual revenue. This revolving business line of credit is renewed each year, giving you the chance to qualify for lower rates.
Loan amount
$10,000 – $100,000
APR
Starting at 7.25%
Min. Credit Score
700
Bank of America offers an unsecured business line of credit with a low starting rate of 7.25% and credit limits beginning at $10,000 — low for a bank. It's also easier for small businesses to qualify than with most banks, only requiring two years in business and $100,000 in annual revenue. This revolving business line of credit is renewed each year, giving you the chance to qualify for lower rates.
Pros
Unsecured line of credit from a bank
Low starting APR of 7.25%
Easier to qualify for than most bank lines of credit
Cons
Lowest rates only available to current customers
Doesn't disclose fees online
Loan amount
$10,000 – $100,000
APR
Starting at 7.25%
Min. Credit Score
700
Loan term
12 to 60 months
Requirements
Good credit, 2+ years in business, $100,000+ revenue
While other online lenders might offer same-day funding on their business lines of credit, few are as fast as OnDeck. You can receive funds within 30 minutes of sending a request at no extra fee — as long as the transaction is between $1,000 and $10,000. And it's available to business owners with fair credit and just one year in business — though qualifying industries may be limited. But this business line of credit is expensive. The average APR is close to 48%, far higher than your typical credit card. And it comes with a $20 monthly maintenance fee.
Loan amount
$6,000 – $100,000
APR
52.6% average APR
Min. Credit Score
625
While other online lenders might offer same-day funding on their business lines of credit, few are as fast as OnDeck. You can receive funds within 30 minutes of sending a request at no extra fee — as long as the transaction is between $1,000 and $10,000. And it's available to business owners with fair credit and just one year in business — though qualifying industries may be limited. But this business line of credit is expensive. The average APR is close to 48%, far higher than your typical credit card. And it comes with a $20 monthly maintenance fee.
Pros
Funding within 30 minutes on certain amounts
Fair credit OK
Reports to business credit bureaus
Cons
High APRs starting at 29.9%
Monthly maintenance fee
Not available to all industries
Loan amount
$6,000 – $100,000
APR
52.6% average APR
Min. Credit Score
625
Loan term
Up to 24 months
Requirements
Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account
Often, your business will have a choice between a secured line of credit and an unsecured line of credit.
A secured line of credit is backed by your business’s assets — often inventory, accounts receivable or a general lien on business assets. This means if you default on your line of credit, the lender can seize the collateral to make up for the loss.
An unsecured line of credit does not require collateral. However, many still require a personal guarantee from all small business owners with a 20% stake or more in the company — which is also a requirement for most secured credit lines. This means that the owners are responsible for paying the line of credit if the business can’t.
A secured line of credit often comes with lower rates and fees than an unsecured line of credit. And backing your credit line with collateral can help you qualify for a higher credit limit. However, unsecured credit lines often have a quicker turnaround time when you first apply.
Business line of credit vs. credit card
Business lines of credit and credit cards might be similar, but they serve different purposes. Generally, a business line of credit is better for expenses that take more than a month to pay off, while a credit card is better for small expenses that you can pay off quickly.
A business line of credit also gives your business access to cash, which can cover more expenses than a credit card. That’s why it’s useful when it comes to financing payroll, rent and utilities.
Credit cards might have higher interest rates. But interest doesn’t apply if you pay off your balance in full each month. That’s not necessarily the case with a line of credit.
Business line of credit vs. loan
A small business line of credit and a term loan also serve different purposes. Generally, a line of credit is useful when you need to finance ongoing costs, while a term loan is better for large, one-off expenses.
Term loans are typically available in higher amounts and come with fixed interest rates. There are also more options for startups and borrowers with bad credit.
But you’ll need to apply again to receive additional funds. And in an emergency, term loans can take longer to receive than a line of credit. And lenders that promise a 24-hour turnaround are often more expensive than slower options.
Bottom line
A business line of credit can be a great asset to small business owners that regularly need access to funds. It’s a particularly great source of working capital for businesses struggling through an off season or an uncertain economy.
Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full bio
Anna's expertise
Anna has written 157 Finder guides across topics including:
BHG Financial is a nonbank lender that offers investment, business debt consolidation, startup and healthcare-related loans to professionals. Borrow up to $500K with minimal requirements.
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