Best Business Lines of Credit of April 2024

• Lendio – Best for a Lender Comparison Site
• OnDeck – Best for Less Than Optimal Credit
• American Express® – Best for Small and Large Lines of Credit
• BlueVine – Best for Flexible Lines of Credit
• Fundbox – Best for Short-Term Lines of Credit
• Wells Fargo – Best for a Traditional Lender

BEST FOR A LENDER COMPARISON SITE

Lendio

Editor’s Take

As a marketplace and not a lender, Lendio can connect business owners to more than 75 lenders with one application. By submitting an application with Lendio, you’ll receive offers from its lending partners and it will help you find the best offer for your specific needs.

Pros & Cons

• One application connects you to more than 75 lenders
• Wide variety of loan products, including term loans, lines of credit and SBA loans

• Some lenders charge prepayment penalties
• Terms and funding times vary depending on specific lender

Details

Overview

Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.

Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners while helping you find the best offer for your needs.

Eligibility

• Minimum Credit Score: 560
• Time in Business: Six Months
• Minimum Annual Revenue: $50,000

Funding time

Applying through Lendio takes 15 minutes. After you review your offers and are approved by your lender, you can receive your funds in as little as 24 hours.

BEST FOR LESS THAN OPTIMAL CREDIT

OnDeck

Editor’s Take

We picked OnDeck for its low minimum credit score requirement and its variety of business lending products. With a minimum credit score requirement of 625, OnDeck makes itself available to wide-range of borrowers.

OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.

Pros & Cons

• Term loans from $5,000 to $250,000
• Lines of credit from $6,000 to $100,000
• Same-day funding
• Low minimum credit score requirement

• $100,000 minimum annual revenue requirement
• Must have been operating for at least one year
• Does not lend to businesses in North Dakota

Details

Eligibility

• Minimum credit score: 625
• Time in business: One year
• Minimum revenue: $100,000 per year

Turnaround time

You can apply and receive a decision from OnDeck on the same day.

BEST FOR SMALL AND LARGE LINES OF CREDIT

American Express® Business Line of Credit

Minimum Credit Score

660 FICO at the time of application

660 FICO at the time of application

Editor’s Take

American Express Business Blueprint™ is best known for its American Express® Business Line of Credit (formerly Kabbage from American Express and Kabbage Funding™), which gives business owners the chance to secure funding between $2,000 to $250,000.

Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.

In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights. All businesses are unique and are subject to approval and review.

 

Pros & Cons

• No prepayment penalty
• Four different repayment options
• Offers small to large lines of credit

• Monthly fees on unpaid balances
• Requires personal guarantee
• Lines of credit over $150,000 are only available to borrowers who meet additional criteria

Details

Eligibility

• Minimum credit score: 660 FICO at the time of application
• Time in business: One year
• Minimum revenue: At least $3,000 per month

All businesses are unique and are subject to approval and review.

Turnaround time

Funds can take up to three business days to appear in your account, depending on your bank.

BEST FOR FLEXIBLE LINES OF CREDIT

Bluevine

APR range

Simple interest starts at 5.9% or 7.8%

Simple interest starts at 5.9% or 7.8%

Editor’s Take

BlueVine offers business owners flexible lines of credit that offer credit increases after payment begins. Startup owners looking to access a line of credit can receive funds between $6,000 and $250,000. Through BlueVine’s Flex 6 payment structure, startups make weekly payments over 26 weeks. After 45 days of payment on Flex 6, you may be eligible for a credit line increase. BlueVine also offers its Flex 12 structure, but it requires at least three years in business, so it’s not suited for most startups.

Pros & Cons

• Receive a decision within five minutes and instant funding with a Bluevine business checking account, or receive funds within 24 hours
• Lines of credit up to $250,000
• Low credit score requirement

• No mobile app for its line of credit
• Monthly revenue requirement
• Not available to businesses in Nevada, North Dakota, South Dakota, Puerto Rico and other U.S. territories

Details

Eligibility

Eligibility varies on the specific program a business owner chooses.

Weekly plan

• Minimum credit score: 625
• Time in business: Two years
• Minimum revenue: $40,000 monthly or $480,000 annually
• Business type: Corporation or LLC
• Bankruptcies: No past bankruptcies

Monthly plan

• Minimum credit score: 650
• Time in business: Three years
• Minimum revenue: $80,000 per month or $960,000 annually
• Business type: Corporation or LLC

Turnaround time

After you submit your application, you can receive a decision in as quickly as five minutes and instant funding with a Bluevine business checking account. Borrowers who don’t have a Bluevine business checking account can receive funds within 24 hours.

BEST FOR SHORT-TERM LINES OF CREDIT

Fundbox

APR range

Interest rates start at 4.66%

Interest rates start at 4.66%

Editor’s Take

With Fundbox, business owners can qualify for short-term lines of credit with quick turnaround times. Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks.

Pros & Cons

• No prepayment penalty
• Low minimum annual revenue requirement
• Next-business-day funding

• Only short-term repayment terms are available
• Does not disclose APRs

Details

Eligibility

• Minimum credit score: 600
• Time in business: Six months
• Minimum revenue: $100,000 per year

Turnaround time

With a business line of credit from Fundbox, you can receive your funds as soon as the next business day.

BEST FOR A TRADITIONAL LENDER

Wells Fargo

APR range

Prime + 1.75% to Prime + 9.75%

Minimum Credit Score

Wells Fargo does not disclose this information

Prime + 1.75% to Prime + 9.75%

Wells Fargo does not disclose this information

Editor’s Take

Wells Fargo offers three business lines of credit—unsecured line of credit, Small Business Advantage and Prime Line of Credit. The unsecured line of credit from Wells Fargo is the best option from a traditional lender.

Through Wells Fargo’s unsecured line of credit, business owners can access credit lines from $5,000 to $100,000 with payments due monthly. Unlike other lines of credit on our list, Wells Fargo charges an annual fee of $95 or $175, waived for the first year. Lines of credit between $10,000 and $25,000 charge a $95 annual fee while lines of credit between $25,001 and $100,000 charge a $175 annual fee.

Pros & Cons

• No collateral required
• Low interest rates available
• Rewards available

• Annual fee after the first year
• Requires at least two years in business

Details

Overview: Wells Fargo’s unsecured business line of credit is generally best suited for existing customers or small business owners who want to supplement cash flow, cover daily expenses, expand or jump on unexpected business opportunities through a traditional bank compared to an online lender.

Wells Fargo also offers its Small Business Advantage line of credit (backed by the U.S. Small Business Administration), which is suited for businesses in operation for less than two years. However, credit line amounts are between $5,000 and $50,000. Further, established businesses with annual sales between $2-5 million can apply for a Prime Line of Credit, which is a secured line of credit between $100,000 and $500,000. This, however, does not cater to most small businesses.

Table data is missing.

Turnaround time: If you apply for an unsecured business or Small Business Advantage line of credit, you will receive a decision within 10 business days. Prime Line of Credit applications, however, take up to two weeks to process after you submit the required documentation.

Summary: Best Small Business Lines of Credit 2024

The Complete Guide to Business Lines of Credit

Methodology

We reviewed 16 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:

• Loan cost. 35%
• Loan details. 25%
• Customer experience. 20%
• Eligibility and accessibility. 10%
• Application process. 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

What Is a Business Line of Credit?

A business line of credit gives businesses access to cash on an as-needed basis, up to a predetermined limit. Unlike a traditional small business loan, there isn’t a lump-sum disbursement with a line of credit. As a result, this form of financing allows businesses to fund ongoing or unexpected expenses.

Typically, business lines of credit are unsecured, which means that there isn’t any collateral required to qualify for this form of financing.

How Does a Business Line of Credit Work?

When you get a business line of credit, you’ll receive a credit limit you can borrow against in the future. Instead of receiving the full amount upfront, as in the case of a business loan, borrowers get the ability to withdraw what they need over time, known as the draw period.

Unlike a traditional business loan, borrowers are only responsible for paying interest on the amount they borrow—not the total credit limit. After the draw period, which typically lasts 12 to 24 months but can sometimes go up to five years, the repayment period starts and the borrower can no longer withdraw funds. The borrower must pay off the outstanding balance and any interest by a fixed date, which can range anywhere from six months to five years.

Pros and Cons of Business Lines of Credit

Business lines of credit are just one of many financing options available to fund your business. Before moving forward with a business line of credit, consider the pros and cons to make sure this choice is right for your business.

Pros

• Can help avoid overborrowing
• Fill in gaps in cash flow
• Interest is only paid on borrowed funds
• Quick access to money when needed

Cons

• May require a personal guarantee
• May need to be backed with collateral
• Often has annual fees, draw fees and other costs
• Difficult to obtain for newer businesses or bad-credit applicants

Types of Business Lines of Credit

A business line of credit is a flexible form of financing that allows business owners to borrow money as needed, rather than receiving funds as a lump-sum payment such as with a small business loan. Instead of paying interest on the entire credit line, borrowers owe interest only on the funds they use.

There are two types of business lines of credit:

Secured Business Lines of Credit

A secured business line of credit requires you to pledge collateral—which is something of value, like accounts receivable or inventory—that a lender can seize if you fail to repay what you borrow.

Qualifying for a secured line of credit can be easier and may have lower interest rates than an unsecured line of credit. Nonetheless, before opting for this type of line of credit, be sure you can afford to repay any debt you take on.

Unsecured Business Lines of Credit

An unsecured business line of credit doesn’t require you to pledge collateral. However, a lender may require a personal guarantee, which means you accept personal responsibility for repaying the loan if the business is unable to make payments. This could affect your personal credit, too.

Unsecured lines of credit can have higher interest rates and may have stricter requirements than secured lines of credit, but it won’t carry the same consequences if you default.

How To Choose a Business Line of Credit

Keep these factors in mind when choosing a business line of credit:

• Eligibility requirements. While requirements can vary by lender, most minimum requirements for your business’ credit score, length of time in business and annual company revenue. Traditional lenders, like banks, often have more stringent requirements than online lenders. For example, while banks often require you to have at least two years in business, some online lenders require you to only have a minimum operating time of six months.
• Line of credit amount. Maximum credit limits also vary by lender. When choosing a lender, make sure it offers a credit limit that matches your business’ needs.
• Funding speed. The time it takes for a lender to issue your funds also varies. While some lenders can issue your funds as soon as the same business day, some lenders take longer. If you need funds fast, choose a lender that’s known for quick funding.
• Repayment terms. Once your draw period ends, a lender will likely require you to repay the amount you borrowed on a monthly basis. However, the amount of time you have to repay what you borrow—the repayment term—varies. Pick a lender that offers a repayment term that best suits your business.
• Fees. Common fees include origination fees for processing your loan application, annual fees and monthly maintenance fees. Make sure you understand what fees a lender charges to get an idea of what your total borrowing costs will be. An easy way to do this is to look at the annual percentage rates (APRs) a lender offers—it measures interest, plus fees.

Where To Get a Business Line of Credit

Business lines of credit are available from various lenders, which may be better suited for different borrowers. Locating the best terms, rates and loan features depend on the applicant. However, if you need a business line of credit, these institutions may work for you:

• Banks. If you prefer working with an institution you have a relationship with, prefer working face-to-face with a banker or qualify for a low rate, a bank is a good option. However, the application requirements may be strict and the processing time can take longer than other options.
• Credit unions. Look to a credit union for a business line of credit if you prefer working with a nonprofit institution that may offer lower rates or options for credit-challenged business owners. You’ll need to meet membership requirements to join.
• Online lenders. Online lenders can offer the lowest interest rates and are a good option if you don’t mind working with a online-only lender. You’ll have a wider range of lenders to choose from.

How To Qualify for a Business Line of Credit

In most cases, the application requirements for a business line of credit are similar to the business loan requirements. Here’s how you can boost your odds of qualifying for a business line of credit:

• Check your credit. Most lenders will check your personal and business credit. Check your credit scores and reports to ensure there are no errors. If there are, contact the credit bureaus to get the mistake corrected.
• Refine your business plan. Some lenders—often banks—will want to see a current business plan as a part of your application. Make sure your plan is up to date and reflects your current business.
• Consider collateral. If you have any collateral, such as inventory stock or equipment, you may qualify more easily for a business line of credit.
• Check your eligibility. Many lenders will have time in business and annual revenue requirements. Before you apply, make sure you meet these eligibility requirements or find a lender with more flexibility qualifications.

How To Get a Business Line of Credit

While the application process may vary slightly across lenders, you can follow these general steps to get a business line of credit:

• Decide how much funding you need. Estimate the maximum amount of credit you’ll need by reviewing your business’ finances.
• Review your credit. When you apply for a business line of credit, a lender usually checks your personal and business credit scores. This helps a lender assess the likelihood that you may default on the line of credit. The higher your credit score, the better your loan approval odds and chances of securing a low interest rate.
• Research and compare lenders. To find the best business line of credit for your company’s needs, research different lenders and compare their maximum credit limits and repayment terms offered, minimum requirements and APR ranges.
• Gather required documents. Although the specific paperwork varies by lender,you’ll likely need personal and business tax returns, bank statements, a business plan and profit and loss statements. If you’re uncertain about what documents are needed, contact the lender before applying or review its website.
• Submit a loan application. Once you’ve found a lender that offers a line of credit that matches your unique business needs, submit a formal loan application online or in person.

Related: How To Get A Business Line Of Credit

Is a Business Line of Credit a Good Idea?

Whether or not a business line of credit is a good idea depends on you and the needs of your business. Business lines of credit are best for bridging short-term dips in cash flow, especially when you know you’ll be getting paid later, says Carolyn Katz, a small business mentor for the nonprofit Score NYC and former venture capital investor and banker.

For instance, if your business needs to purchase materials to fulfill a customer order but you won’t get paid for that order until several months later, that could be a good time for a business line of credit. Hypothetically, you could also build the cost of the financing into your sales price. Then, once you’re paid for the order, you can pay off the outstanding balance on your line of credit.

“A line of credit is not growth capital,” says Katz. “If a company is looking to expand, open a new location, etc., that type of capital need is better met by more permanent financing such as a term loan where the borrowing period can be better matched to the longer-term and more uncertain capital need.”

Business Lines of Credit Vs. Other Financing Methods

While a business line of credit works best for certain types of expenses, other forms of financing may work better in some scenarios.

Business Line of Credit vs. Small Business Loan

Unlike a business line of credit, lenders issue small business loans as a lump sum of cash. After you receive funds, you’re required to repay the loan, including interest on the entire balance, in fixed installments over a set period of time—typically between six months and 25 years.

Small business loans are best for making large purchases and covering the cost of doing business while business lines of credit are handy as a rainy day fund.

Business Line of Credit vs. Business Credit Card

Similar to a business line of credit, a credit card provider issues you a credit limit you can borrow from as needed. However, business credit cards typically have significantly smaller credit limits. As a result, credit cards are better suited for smaller, day-to-day business expenses.

Business credit cards also have different qualification requirements. When you apply for a business credit card, your provider typically focuses on your personal credit score, making them a great option for startup owners or sole proprietors without a lot of business history.

However, business credit cards often come with higher interest rates than business lines of credit. But if you have good to excellent credit, you may qualify for an interest-free promotional period on purchases and/or balance transfers. As long as you pay your balance off in full before the period expires, you can avoid all interest charges.

¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

Recap: Best Small Business Lines of Credit 2024

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