Best Lines of Credit for Small Business

Lines of Credit for Small Business Reviews

Unlike standard term loans, which provide a single lump sum, lines of credit offer businesses access to a set amount of funds they can pull from at any time during the term, serving as a financial safety net. Interest is paid only on the amount used, and with a revolving system, the money you pay back becomes available again, without needing to reapply.

loan amount, eligibility requirements, draw periods, and more. Learn more about how we determined our list by visiting our methodology section.

SBG Funding – Best for Small Businesses with Low Credit

SBG Funding provides niche business financing with transparent terms and high approval rates. The application is fast and easy, requiring minimal paperwork and zero collateral. Additionally, early payoff discounts are Available, meaning your business won’t be penalized for prepaying loans.

SBG Funding offers small-business lines of credit ranging from $5,000 to $500,000 for revolving working capital. Businesses must make at least $250K+ in annual revenue and have been in business for at least 6 months. With SBG Funding, there’s no hard credit pull, no collateral is required, and funding can be received the same day, depending on the criteria met.

Get Started Visit SBG Funding’s website

SBG Funding details

• Annual Percentage Rate (APR) – Not disclosed (other SGB Funding loan rates start at 1.75%)
• Loan Amounts – $5K to $500K
• Min. Time in Business – 6 months
• Min. Credit Score – 500

Fundbox – Best Line of Credit for Startups

Fundbox is a popular online line of credit and embedded capital platform for small businesses. It uses a third-party data provider, Plaid, to connect to your bank account, ensuring you can access the funds you need when you need them. Fundbox helps you run your business even with unexpected expenses, cover upfront costs, manage payroll gaps, and grow your business with flexible repayment terms.

You can apply online easily; no paperwork is needed to get started. Decisions can be made in minutes, and if approved, funding can be within your business banking account as soon as the next business day. To qualify, your business must be based in the U.S., make $30,000+ in annual revenue, have a business checking account, have been in business for three to six months, and have a 600+ personal FICO score.

Fundbox details

• Annual Percentage Rate (APR) – 4.66% to 25%
• Loan Amounts – $1K to $250K
• Min. Time in Business – 3 to 6 months
• Min. Credit Score – 600

OnDeck – Best for Flexible Repayment

OnDeck provides fast, on-demand funding with their business line of credit, with limits ranging from $6,000 to $200,000. It lets you draw what you need, delivering your funds within seconds (limited to funds between $1K and $10K). It offers flexible repayment terms of 12, 18, or 24 months. Payments can be made weekly or monthly, and OnDeck offers a revolving line of credit.

Whether you withdraw at night or on weekends, OnDeck ensures you receive your money within seconds. Additionally, OnDeck reports to business credit bureaus, helping your small business build a business credit history with on-time payments. It’s important to note that all lines of credit require a minimum draw of $1,000 at origination.

OnDeck details

• Annual Percentage Rate (APR) – 6% to 56.6%
• Loan Amounts – $6K to $200K
• Min. Time in Business – 12 months
• Min. Credit Score – 625

Read our full OnDeck review

Biz2Credit – Best for Tailored Funding Options

Biz2Credit, a marketplace lender, provides lines of credit tailored to your business’s needs, with limits up to $500,000. It uses automation and optimized workflows, handles high volumes without sacrificing responsiveness, and provides end-to-end management, thereby reducing decision times so you can receive funding in as little as 24 hours.

Biz2Credit offers a 12-month draw period, meaning you can access funds at any point during that time, up to the last 5 days. It’s important to note that draw requests are subject to underwriting review. To qualify, businesses must have an average annual revenue of $250,000 and have been in operation for at least 12 months at the time of application.

Biz2Credit details

• Annual Percentage Rate (APR) – Starts at 18.99%
• Loan Amounts – $5K to $500K
• Min. Time in Business – 12 months
• Min. Credit Score – 650

Read our full Biz2Credit review

Bluevine – Best Line of Credit with Business Checking

Bluevine offers a business line of credit with interest rates as low as 7.8% for qualifying customers. With a Bluevine business checking account, you get instant access to your funds, allowing you to cover big expenses, improve cash flow, and take advantage of growth opportunities. Credit limits extend up to $250,000, and interest only applies to what you withdraw.

Bluevine reports your repayment history to Experian, allowing you to improve your business credit score for future financing opportunities. Application is fast and easy, and decisions can be made within five minutes. Business owners can request funds in a click, and approved draws appear in their account in as little as 24 hours. Additionally, Bluevine allows you to repay automatically on a fixed schedule and offers personalized support your small business needs.

Bluevine details

• Annual Percentage Rate (APR) – Starts at 7.80%
• Loan Amounts – $5k to $250k
• Min. Time in Business – 12 months
• Min. Credit Score – 625

Wells Fargo – Best for Established Businesses with High Revenue

For businesses looking for a more traditional line-of-credit lender, Wells Fargo is a popular choice due to its low starting interest rates and a waived annual fee for the first year. It provides unsecured lines of credit, meaning no collateral is required, and while there are no annual reviews, Wells Fargo does require personal guarantees. It offers two lines of credit options: BusinessLine and Prime Line of Credit.

The BusinessLine option offers unsecured lending ranging from $10,000 to $150,000, with rates as low as 1.75%. The Prime Line of Credit offers a 3-year secured revolving line from $100,000 to $750,000, and a 1-year term for secured revolving credit, with limits ranging from $750,001 to $3,000,000. Rates start as low as 0.50%, but are subject to a minimum floor rate of 5.00%, depending on your personal and business credit evaluation. This option is best suited for businesses with $2 to $25 million in annual revenue.

Wells Fargo details

• Annual Percentage Rate (APR) – 1.75% to 9.75%
• Loan Amounts – $10K to $150K (BusinessLine)
• Min. Time in Business – 6 months
• Min. Credit Score – 680

Compare the Best Lines of Credit for Small Business Side-by-Side

What is a Line of Credit for Small Business?

A line of credit for a small business is a type of business loan that functions more like a business credit card. It provides businesses with access to a limited amount of money that can be borrowed as needed, covering any expense that may arise, primarily for short-term working capital and cash flow management.

Unlike traditional business loans, lines of credit do not involve a lump-sum disbursement; rather, the borrower draws funds as needed, and interest is paid only on the amount borrowed. They act as a revolving financing tool, meaning that as you repay, those funds (minus interest) become available to use again. Small business lines of credit are subject to credit reviews and annual renewals.

Common uses for business lines of credit include:

• Bridging cash flow gaps
• Covering payroll
• Marketing
• Purchasing inventory
• Covering overhead
• Hiring staff
• Paying for emergency equipment or repairs
• Sudden operational costs
• Covering non-credit expenses

Overall, a line of credit for small businesses grants access to a flexible, revolving pool of funds, allowing you to repay what you use and borrow again without having to repeat the application process.

Types of Business Lines of Credit

There are two main types of business lines of credit available: secured and unsecured.

• Secured business lines of credit—These loan types are backed by collateral, typically business inventory, real estate, equipment, or accounts receivable. Because they carry less risk for the lender, they usually offer higher credit limits and lower interest rates.
• Unsecured business lines of credit—An unsecured line of credit does not require collateral. Approval is based on your business’s revenue and your personal creditworthiness. Additionally, they tend to have variable interest rates, with limits ranging from $10,000 to $250,000, on average.

Within these categories, lenders may offer specialized variations depending on your collateral, revenue, and borrowing needs. Common variations include startup business line of credit, invoice financing, and SBA CAPLines.

Business Lines of Credit vs. Business Loans

While both are forms of business financing, a business loan differs from a line of credit in core functionality. A business loan provides businesses with an upfront lump sum of money that they can pay back in fixed monthly payments over a set term. They’re best for financing specific projects, investing, or supporting acquisitions for business growth.

A business line of credit is a type of business loan that provides flexible, often revolving access to working capital as needed. It is often compared to a credit card because you can borrow as much money as you need up to your credit limit. Plus, you only pay interest on what you actually borrow. Lines of credit are best for short-term working capital, bridging cash flow gaps and offering emergency funds.

Generally, it’s easier to apply for a line of credit than a business loan because less money is lent and eligibility requirements are easier to meet for small businesses. Typical requirements for business lines of credit include meeting a minimum annual revenue ($50,000 to $100,000 in most cases), a good credit score (typically 600+, though some lenders accept lower), and at least six months to two years in business. To qualify for business loans, however, these requirements are often stricter, and businesses must explain exactly how they plan to use the funds and offer some business assets as collateral.

Pros and Cons: Lines of Credit for Small Business

In addition to providing small business owners access to flexible, revolving funds, business lines of credit offer a wide range of benefits. Below, we explore the top benefits as well as the disadvantages to help you determine if a business line of credit is the right financing option for your business.

Pros:

• Improved Cash Flow—Provides a flexible safety net to bridge gaps between expenses and incoming payments, offering a reliable source of working capital to cover unexpected expenses and seasonal downturns.
• Competitive Interest Rates—Tend to have lower interest rates compared to business loans or business credit cards.
• Pay for What You Use—Only pay interest and draw fees on the exact amount you withdraw, not on the full lump sum.
• Reusable Capital—As you repay borrowed money, your credit limit replenishes, allowing you to draw again without reapplying.
• Builds Business Credit—If the lender offers credit reports, making withdrawals and repayments can help build your business credit score.
• Quick Access to Cash—Funds are typically deposited directly into your business checking account, making them easy to access.

Cons:

• Risk of Overspending—Some may treat a credit line like extra revenue, which could lead to a costly cycle of debt if balances are not paid off on time.
• Hidden Fees—Lines of credit may have many hidden loan fees, including origination fees, annual/monthly maintenance fees, draw/trasfer fees, prepayment fees, and more. Be sure to speak with your lender about which line-of-credit fees you need to be aware of.
• Variable Interest Rates—Often feature variable APRs, meaning borrowing costs can increase if market rates rise.
• Not for Long-Term Projects—Typically lower than term loans, making them unsuitable for major, long-term capital investments.

Common Fees and Interest Rates of Business Lines of Credit

All financing comes with fees and interest rates. Business lines of credit rates and fees vary by lender and can change based on market conditions. Typical interest rates range from 7% to 36%; though, some may reach around 50% to 60%. You can also expect one-time origination fees and draw fees (typically 1%–3%) and annual maintenance fees ($50–$250).

Most lenders list their interest rates as an annual percentage rate (APR), which represents the total yearly cost of borrowing or earning interest. An APR includes the base interest rate plus any mandatory fees or additional charges, making it a more accurate reflection of the loan’s true cost. As such, a lower APR is generally better for businesses.

However, some lenders offer business lines of credit using factor rates. These are expressed as decimals (e.g., 1.2) rather than percentages and typically range from 1.10 to 1.50. The total fee is determined by multiplying the factor rate by the loan amount. For example, if your loan is for $45,000 and your factor rate is 1.2, your total would be $54,000, meaning the interest is $10,000 (i.e., $45,000 x 1.2 = $54,000).

Lines of Credit for Small Business FAQs

Can an LLC get a business line of credit?

Yes, an LLC can get a business line of credit. In fact, it is a great financing option, offering built-in flexibility and financial security to help stabilize daily operations and grow your business. However, your LLC will need to meet the lender’s requirements to qualify. Depending on how new your LLC is, your eligibility may depend on your personal credit score and the collateral you offer.

What is a good interest rate for a business line of credit?

A good interest rate for a business line of credit typically ranges from 7% to 15% APR, depending on whether it’s secured or unsecured. Traditional banks and the SBA tend to have lower APRs but stricter requirements, while online lenders have higher rates (15% to 36%+) but are easier to qualify for.

What other small business loans can I get in addition to my line of credit?

Many other financing options are available for small businesses beyond lines of credit. Common options include equipment financing, SBA loans, term loans, invoice factoring, or merchant cash advances. Choosing the right loan depends on how you plan to use the funds and your specific business circumstances.

How We Chose the Best Lines of Credit for Small Business

We curated a list of 26 business line-of-credit lenders on the market and identified 9 notable vendors with positive reputations to narrow our focus. From there, we chose 6 providers that stood out for their loan amounts, draw periods, interest rates, and more.

We scored companies on a scale of 1 (poor) to 5 (excellent) across the following criteria, each worth 25% of our total score:

• Lender requirements: We looked for line-of-credit lenders with reasonable requirements for a borrower’s time in business, credit scores, and annual revenue.
• Lender offerings: We chose lenders with reasonable APRs, flexible draw periods, and a range of loan amounts.
• Lender transparency: Lenders with clear and easy-to-find rates, fees, and terms were scored higher.
• Brand reputation: We analyzed customer reviews and ratings on trustworthy third-party review sites to gauge each lender’s reputation among borrowers.