| Lender | Best for | Max loan amount▼ | Min. credit score▼ | APR range | Max term length▼ |
|---|---|---|---|---|---|
| Bank of America 5.0/5.0 | Bank business lines of credit | See review | 700 | See review | See review |
| U.S. Small Business Administration | SBA lines of credit | $5,000,000 | 650 | 11.50-15.00% | 10 years |
| OnDeck 5.0/5.0 | Easy business lines of credit | $100,000 | 625 | 35.90-84.90% | 2 years |
| Headway Capital 5.0/5.0 | Startups | $100,000 | 625 | 35.00-80.00% | See review |
| Bluevine 5.0/5.0 | Fast funding | $250,000 | 625 | 20.00-50.00% | 6 months |
| Chase | Secured business lines of credit | $500,000 | 700 | See review | See review |
| Wells Fargo 5.0/5.0 | Unsecured business lines of credit | $150,000 | 680 | 10.25-18.25% | See review |
| Fundbox 5.0/5.0 | Bad credit | $150,000 | 600 | 36.00-99.00% | 6 months |
| American Express Business Blueprint™ 5.0/5.0 | American Express customers | $250,000 | 660 | See review | 2 years |
Best for
Bank business lines of credit
Bank of America offers business lines of credit in amounts of $10,000 or more that are well-suited for borrowers with strong credit.
Bank of America Business Advantage Unsecured Line of Credit
Max Loan Amount
Undisclosed
Min. credit score
700
Established businesses with strong credit can access this revolving line of credit, no collateral required.
Max loan
Undisclosed
Min. Credit score
700
Best for
SBA lines of credit
The SBA CAPLines program offers four credit line options that can be used for a variety of business purposes.
SBA CAPLines of credit
Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
11.50-15.00%
The SBA CAPLines program offers four lines of credit that can help businesses meet short-term and cyclical working capital needs. These credit lines have competitive interest rates and repayment terms.
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
Best for
Easy business lines of credit
OnDeck offers business lines of credit of up to $100,000 with a streamlined application process and fast funding times.
OnDeck - Line of credit
Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.90-84.90%
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
May fund quickly
Max loan
$100,000
Min. Credit score
625
Apr range
35.90-84.90%
Best for
Startups
Headway Capital offers fast funding up to $100,000 for borrowers with at least six months in business.
Headway Capital - Line of credit
Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.
Max loan
$100,000
Min. Credit score
625
Apr range
35.00-80.00%
Best for
Fast funding
Bluevine offers a business line of credit of up to $250,000 and can fund applications in as little as 24 hours.
Bluevine - Line of credit
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's 26-week line of credit provides fast working capital for short-term borrowing needs.
May fund quickly
Max loan
$250,000
Min. Credit score
625
Apr range
20.00-50.00%
Best for
Secured business lines of credit
Chase’s business line of credit offers up to $500,000 with a five-year revolving term. You will need to provide collateral to secure your credit line.
Chase - Business line of credit
Max Loan Amount
$500,000
Min. credit score
700
Chase offers a revolving credit line that allows you to withdraw funds as needed, but you’ll typically need strong credit and at least two years in business.
Max loan
$500,000
Min. Credit score
700
Best for
Unsecured business lines of credit
Wells Fargo offers business lines of credit of up to $150,000 and doesn’t require physical collateral. Borrowers will be required to sign a personal guarantee, however.
Wells Fargo BusinessLine® Line of Credit
Max Loan Amount
$150,000
Min. credit score
680
Est. APR
10.25-18.25%
This Wells Fargo line of credit offers competitive rates for businesses with at least two years in operation.
Max loan
$150,000
Min. Credit score
680
Apr range
10.25-18.25%
Best for
Bad credit
Fundbox offers quick funding of up to $150,000 for borrowers with a credit score of 600 or higher.
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
Best for
American Express customers
Existing American Express customers can use their accounts to find out if they prequalify for this business line of credit.
American Express® Business Line of Credit
Max Loan Amount
$250,000
Min. credit score
660
The American Express® Business Line of Credit is a good option for business owners with fair credit who want access to working capital.
Max loan
$250,000
Min. Credit score
660
How to choose the right business line of credit
When trying to choose the best business line of credit for your needs, you’ll want to compare factors such as:
- Maximum funding amount. If you think you need a large credit limit, bank or SBA lenders may be a better option — but will require you to meet strict qualifications. Keep in mind that many banks also offer commercial lines of credit, which are designed to meet the needs of mid-size, high-revenue businesses.
- Repayment schedule. Business lines of credit may require daily, weekly or monthly repayment. Consider your budget and cash flow to determine the type of repayment you can afford.
- Interest rates. Bank and SBA lines of credit will likely offer the best business line of credit rates, ranging from 10% to 19%. Online lenders may have higher rates, but will fund more quickly, with flexible qualification requirements. Also consider whether a lender offers fixed or variable rates.
- Additional fees. Origination-, draw- and account maintenance fees can increase the overall cost of your business line of credit. You should make sure you understand any additional fees a lender charges and ask questions if the fees are unclear. You’ll also want to determine if the lender charges prepayment penalties for repaying early.
- Funding speed. If you need business capital quickly, you may be able to get it from an online lender in just a few days. Although traditional lenders may take anywhere from days to weeks to provide funding, you’ll likely get a lower interest rate with these options.
- Lender reputation. Reading online reviews or talking to other business owners can help you get a sense of what it may be like to work with a particular lender. Although there are many reputable online lenders, be wary of any company that offers “guaranteed approval” or makes similar promises that seem too good to be true.
Business line of credit calculator
When you draw from a business line of credit, you only pay interest on the funds that you borrow. You then repay the funds over time, based on a schedule set by your lender.
Enter a withdrawal amount, repayment term and annual interest rate to estimate your monthly payment, total interest costs and the total amount repaid.
Monthly payment
$0.00
Total payments
$0.00
Total interest paid
$0.00
What is a business line of credit?
A business line of credit is a revolving form of business financing. Unlike a traditional small-business loan — where you receive a lump sum of capital and repay it over a specific period of time, with interest — a business line of credit is more flexible.
With a business line of credit — also known as a commercial line of credit — you receive access to a set amount of capital and can draw funds as needed. You only pay interest on the funds that you draw. You then repay the funds over time, typically on a weekly or monthly schedule. You can continue to draw on your business credit line as often as you’d like, as long as you make payments on time and don’t exceed your credit limit.
How does a business line of credit work?
Business lines of credit are available from banks, credit unions and online lenders. Although funding amounts and repayment terms vary, lines of credit typically have lower maximums and shorter terms compared to traditional business term loans.
A secured business line of credit requires you to put up assets such as inventory or property as collateral. If you fail to pay back the credit line, your lender could seize your assets. Unsecured business lines of credit, on the other hand, don’t require collateral, but some lenders may still require a personal guarantee or a lien on your business’s assets.
Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways:
- Credit limit. Business lines of credit typically have higher credit limits than business credit cards.
- Functionality. Whereas credit cards are used for purchases, business lines of credit provide actual cash in your bank account when you make a draw. You can get cash from a credit card, but you’ll be charged a cash advance fee to do so.
- Rewards. Business lines of credit don’t usually include rewards, whereas business credit cards often offer rewards or cash back for spending. Rewards are typically related to business expenses.
- Interest rates. Business lines of credit generally offer lower interest rates than credit cards. Business credit cards, however, may include a 0% interest promotion, which allows you to pay no interest on your balance for a specific period after signing up for the card. Lines of credit don’t offer this feature.
Overall, business credit cards tend to work best for smaller ongoing expenses and for newer businesses without established finances, while business lines of credit work best for larger ongoing expenses and more mature businesses.
Business line of credit rates and fees
Current business line of credit rates can range from 10% to 99% APR. The interest rate you receive will vary based on your lender, credit score, financial history and time in business, among other factors.
In general, the stronger your credentials, the lower interest rates you’ll receive. Banks tend to offer more competitive business line of credit rates compared to online lenders.
Depending on your lender, you may also have to pay fees on your line of credit, such as:
- Origination fee. Fee charged to process your application. May be charged as a flat fee (e.g. $150) or a percentage of the line amount (e.g. 0.5% of the line amount).
- Account maintenance fee. Monthly or annual fee associated with managing your account and keeping your business line of credit active. Also may be charged as a flat fee or a percentage of the line amount.
- Draw fee. Fee charged each time you draw on your credit line. This fee is charged as a percentage (typically up to 2%) of the draw amount.
- Inactivity fee. A lender may charge this flat fee if you don’t draw from your line of credit within a specified period of time. Fee amount typically depends on the terms of your agreement.
Minimum APR | Maximum APR | |
|---|---|---|
Bank of America Business Advantage Unsecured Line of Credit | 10.00%. | Undisclosed. |
Bluevine - Line of credit | 20 %. | 50 %. |
Chase Business Line of Credit | Variable rate based on the prime rate; specifics undisclosed. | Variable rate based on the prime rate; specifics undisclosed. |
Fundbox - Line of credit | 36 %. | 99 %. |
Headway Capital - Line of credit | 35 %. | 80 %. |
OnDeck - Line of credit | 35.9 %. | 84.9 %. |
SBA CAPLines of credit | 11.5 %. | 15 %. |
Wells Fargo BusinessLine® Line of Credit | 10.25 %. | 18.25 %. |
Pros and cons of business lines of credit
Pros
Good option for working capital, short-term expenses and emergency funding needs.
Only pay interest on funds you draw, not the total credit limit.
May be easier to qualify for than traditional term loans.
Can be used to build business credit.
Cons
Not suitable for large purchases or investments.
May include a variety of fees that can add to overall cost.
Often have shorter repayment terms and lower funding amounts than traditional term loans.
Where to get a business line of credit
Banks and credit unions can offer different types of business credit lines, including secured and unsecured business lines of credit.
Although these lenders can offer business lines of credit with competitive interest rates, you’ll typically need to meet strict requirements to qualify. You’ll likely need to have strong revenue, good credit and several years in business.
Compared to online lenders, banks and credit unions can also be more likely to require physical collateral to secure your credit line (especially for larger limits), as well as more likely to charge additional fees, including annual and inactivity fees.
Online lenders, like Headway Capital and Fundbox, generally have more flexible business line of credit requirements compared to banks and credit unions. Online lenders are a good option for startup business lines of credit or bad credit borrowers.
Online lenders typically have streamlined application processes and fewer fees, and may be able to issue small-business lines of credit in a matter of days. However, these lenders are also likely to charge higher interest rates than banks and may have lower credit limits.
Some banks and credit unions also offer SBA CAPLines of credit. These SBA lines of credit are part of the 7(a) program, offering funding up to $5 million. There are four different credit line options based on your industry and financing needs.
Although you’ll still need to meet strong qualifications to get an SBA line of credit, these products may be slightly easier to access than traditional bank credit lines. Like business bank loans, however, these SBA lines of credit require a detailed application process and will likely be slow to fund.
How to apply for a business line of credit
To get a business line of credit, you can follow these steps:
1. Evaluate your financing needs
Determine why you need funding and how quickly you need it. If you’re looking for a working capital line of credit to cover payroll, for example, you may need financing as quickly as possible.
It's also important to determine how much capital you can afford. You can use a business line of credit calculator to estimate potential payments and interest costs.
2. Review business line of credit requirements
Evaluate your business's credentials — time in business, annual revenue, personal credit score — to determine what lines of credit you can qualify for.
If you’re looking for a secured business line of credit, you should also make sure you know what assets you’re going to put up as collateral and how much they’re worth.
3. Research and compare lenders
Once you have a better understanding of your financing needs and qualifications, you can research and compare small-business lenders to find the right option for your company.
Interest rates, borrowing limits and qualifications will vary by lender.
4. Gather required documents and apply
As part of your application, lenders will typically consider your credit and financial history — and ask you to provide documentation, such as:
- Personal and business tax returns.
- Personal and business bank statements.
- Business financial statements (e.g., profit and loss statement or a balance sheet).
Depending on your lender, it may take anywhere from 24 hours to several weeks to complete the application and underwriting process.
» Need more details? Read our in-depth guide on how to get a business line of credit
Frequently asked questions
Business lines of credit may be available up to $500,000, but the amount that you can borrow ultimately varies based on your lender and qualifications. Online lenders typically have lower maximum funding amounts, whereas banks may not place specific limits on credit line funding. SBA lines of credit are available up to $5 million.
You may be able to qualify for a business line of credit from some online lenders with a minimum credit score of 600. You’ll typically need a stronger credit score — close to 700 or higher — to qualify for a credit line from a bank or credit union, however.
In general, the better your credit, the more options you’ll have available to you, and the lower interest rates you’ll be able to receive.
For newer businesses, it can be more difficult to get a small-business line of credit. Traditional lenders, such as banks, typically require businesses to have several years of operations, revenue and strong finances to secure any type of financing. Some online lenders, however, may be willing to work with startups or businesses with bad credit.
Business line of credit funding times vary from lender to lender. Some online lenders can approve and fund applications as quickly as the same day — and in general, most of these companies can provide capital within a few business days.
With more traditional lenders, on the other hand, it may take anywhere from several days to several weeks for you to get a line of credit.
A commercial line of credit is just another term for a business line of credit. Like commercial loans, however, some lenders may use the term commercial line of credit to target products at larger businesses. These credit lines may be available in larger amounts, but have stricter qualification requirements.
🏦 Curious about SBA loans?
Here’s an overview of how SBA loans work, the types of SBA loans that are available, what each loan type can be used for and how to get SBA financing for your small business.
Last updated on June 14, 2024
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