By Jill A. Chafin and Carissa Chesanek | Edited by Kurt Adams and Pearly HuangUpdated March 16, 2023A business line of credit provides flexible financing for short-term expenses, like supplies or payroll. With a business line of credit, you only pay interest on the amount you owe.
Compare the top lenders to find a business line of credit that suits your specific needs.
| Lender | Best for | Maximum credit limit | Repayment term | Starting interest rate |
|---|---|---|---|---|
 | Traditional bank experience | $150,000 | Revolving, no annual review | Prime + 1.75% |
 | Fast funding | $250,000 | 6, 12 or 18 months |
|
 | Unsecured line of credit | $100,000 | 12 months | 29.90% APR |
 | Short-term funding | $150,000 | 12 or 24 weeks |
|
 | Startups | $250,000 | 6 or 12 months | 6.20% simple interest for a 26-week repayment term |
Learn more about how we chose our picks.
| Term length | Revolving, no annual review |
| Max. amount | $150,000 |
| Est. interest rate | Prime + 1.75% to Prime + 9.75% |
| Min. credit score | Not disclosed |
| Min. time in business | 2 years |
No annual fee for the first year
Enrolled automatically in free rewards program
Two years in business to qualify
Not transparent about terms or minimum credit score requirement
Wells Fargo has over 7,000 branches in 37 states, making it a top choice for a brick-and-mortar experience. Though traditional banks like Wells Fargo may have stricter eligibility requirements and slower times to funding, the benefits of using a traditional bank include competitive rates, in-person support and services, the ability to deposit cash and open safe deposit boxes.
You can access from $10,000 to $150,000 with a Wells Fargo business line of credit. Interest rates start at the lender’s prime rate (which can fluctuate) + $150,000 up to Prime + 9.75%. Applications can be completed online or in person, with approval taking up to 10 days.
| Term length | 6, 12 or 18 months |
| Max. amount | $250,000 |
| Est. interest rate |
|
| Min. credit score | 640 |
| Min. time in business | 12 months |
Can receive funds within one to three business days
Credit lines available up to $250,000
Personal guarantee required
Confusing fee structure that varies based on term length
A American Express Business Line of Credit business line of credit is one of the quickest ways to access funds for your business. If approved, you can receive funds within one to three business days. American Express Business Line of Credit offers business lines of credit up to $250,000 for terms ranging from 6 to 18 months, though eligibility is based on creditworthiness and other criteria.
Monthly fees vary based on the term you select. As of November 2022, monthly fees for six-month terms are 2% to 9%, 12-month terms are 4.5% to 18% and 18-month terms are 6.75% to 27%.
| Term length | 12 months |
| Max. amount | $100,000 |
| Starting APR | 29.90% APR |
| Min. credit score | 625 |
| Min. time in business | 12 months |
Repayment term resets with each withdrawal
No prepayment penalties
Annual gross revenue of $100,000 or more to qualify
Does not lend to certain industries, such as nonprofits and select states: Nevada, North Dakota or South Dakota
OnDeck’s business line of credit is one of our top picks for an unsecured option, meaning you don’t need to pledge collateral. However, OnDeck loans require a personal guarantee and a blanket lien on business assets. Funds may be disbursed within the same business day if you submit your loan application before 10:30 a.m. ET. Otherwise, you can anticipate receiving funds within two to three business days.
OnDeck’s lines of credit are for 12-month repayment terms, but the terms resets after each withdrawal. Furthermore, you can repay the debt early without facing any prepayment penalties. Funding ranges from $6,000 to $100,000, with APR rates as low as 29.90% — though the average APR is a whopping 48.9%.
| Term length | 12 and 24 weeks |
| Max. amount | $150,000 |
| Est. interest rate | 4.66% for 12 weeks 8.99% for 24 weeks |
| Min. credit score | 600 |
| Min. time in business | 6 months |
No prepayment penalty
Borrowers only need to be in business for six months
Must have at least a 600 credit score to apply
Annual gross revenue of $100,000 or more to qualify
If your business needs short-term funding, a Fundbox business line of credit can help. Fundbox offers revolving funds up to $150,000 with terms between 12 and 24 weeks. Interest rates start at 4.66% for 12 weeks and 8.99% for 24 weeks.
Businesses need to operate for at least six months and have an annual revenue of $100,000 or greater to qualify for Fundbox’s business credit lines. If approved, you can receive funds the next business day.
| Term length | 6 or 12 months |
| Max. amount | $250,000 |
| Est. interest rate | 6.20% simple interest for a 26-week repayment term |
| Min. credit score | 625 |
| Min. time in business | 6 months |
Only six months time-in-business requirement
No monthly maintenance fees
Must have a minimum credit score of 625
Interest rate is calculated for 26 weeks, so actual APR and borrowing costs may be higher
With only six months in business and $10,000 in monthly revenue to be eligible, Bluevine’s lines of credit could be a good option for startup businesses looking for funds. Bluevine offers a small business line of credit up to $250,000 with terms between 6 and 12 months.
A business line of credit is a revolving, flexible form of small business funding that only charges interest on the amount you use. Whereas a term loan offers a lump sum upfront with a repayment schedule, a business line of credit allows you to withdraw funds as needed. You can withdraw up to the credit limit and once you repay the amount you’ve borrowed, you can withdraw funds again.
Ultimately, a line of credit helps cover unexpected business expenses, such as inventory, payroll or seasonal fluctuations in revenue.
The repayment period for a business line of credit varies by lender, with terms generally ranging from 12 weeks to five years. Some lines of credit renew annually.
The line of credit interest rates depend on the amount and terms you choose, your credit score and the lender’s current offerings. Typically, rates can range between 4% to 60% APR or higher.
Some lenders charge additional fees on top of interest:
Business lines of credit can be secured or unsecured. A secured line of credit requires collateral, such as real estate or equipment. If you default, the lender could seize your assets.
Although an unsecured business line of credit doesn’t require collateral, some lenders may put a lien on your business assets or require you to sign a personal guarantee. In this case, you could lose certain assets if you default.
Newer companies may not qualify for an unsecured business line of credit since they need a solid financial history or business credit, making a secured line of credit a better option. A secured line of credit offers some advantages, such as possible higher spending limits and lower interest rates.
A business credit card is another form of revolving credit where you only pay for what you use. The advantages of a business credit card include a quick and easy application process and the ability to use it almost anywhere while earning rewards and bonuses.
The most significant difference is that credit cards carry higher interest rates than lines of credit — with rates around 12.99% to 28.49%. Additionally, there are certain limitations to credit card usage. For example, you can’t use a credit card for leasing expenses, payroll or certain vendor invoices, whereas a business line of credit can cover those expenses.
A benefit of taking out a business line of credit is that interest only applies to the amount you withdraw. Business line of credit rates vary significantly from lender to lender but typically range from 4.36% to 44% or more.
Samantha has a business line of credit totaling $50,000 with a 10% interest rate. If she withdraws $10,000, she will owe $1,000 in interest. The total amount Samantha needs to repay is $11,000, not $50,000. Once she repays the $11,000, she can access part or all of the $50,000 again.
A business line of credit can help cover short term or emergency expenses. Opening a business line of credit gives you access to immediate funding without the pressure to use the full amount.
However, a term loan or working capital loan is better for larger purchases or long-term expenses. Business loans typically have fixed interest rates and business lines of credit have variable rates, which may be another deciding factor.
| Business line of credit | Small business loan | |
|---|---|---|
| Repayment schedule | Repayments begin after you make a withdrawal from your line of credit. Interest only applies to the amount you borrow. | Repayments start as soon as you receive your loan or shortly after. Interest applies to the entire loan amount. |
| Terms | 12 weeks to five years | 3 months to 25 years |
| Use of funds | Short-term or immediate expenses | One-time or long-term expenses |
Even if you’re eligible for a business line of credit, it might not be the best financing for your business’s specific needs.
| Pros | Cons |
|---|---|
| Only pay for expenses you need so you aren’t over-borrowing | Not suitable for large purchases or long-term expenses |
| Pay interest only on the amount you withdraw | May need to provide collateral |
| Can come with lower interest rates and higher borrowing limits than a credit card | May include additional fees |
To appear on our list of best business lines of credit, we selected lines of credit with a maximum credit line of $100,000 or higher and a minimum credit score of 600. We considered minimum time in business, time to funding, application eligibility, interest rates and overall loan cost in making our list.
Some lenders, such as Bluevine, approve a line of credit to new businesses that have only been up and running for six months. It’s best to check with each lender to determine which are more apt to work with startups and which are interested in only working with established companies.
Approval for a business line of credit can range from one day to several months. The application process varies by lender and is usually done online. Some lenders make a decision within the same day, whereas others take a week or two. Most lenders will outline the timeline so you know when to expect funds.
You may be eligible for a credit line increase once you’ve established a repayment history with your lender and if your cash flow and income change. Not only will an increase help you access more funds, but it could also boost your credit score. Contact your lender to see if you’re eligible for a higher credit limit.
Yes. A business line of credit or any business loan can help you build business credit as long as you make on-time payments. Lenders usually report your payments to the three credit bureaus, which can help improve your overall score.
