Best Startup Business Lines of Credit
Best Startup Business Lines of Credit
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SBA CAPLines of credit
Best for working capital
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Line of credit options for seasonal, working capital, building and contracting needs.
- Large maximum borrowing amounts.
- Competitive interest rates and repayment terms.
Cons
- Typically requires good credit and multiple years in business.
- Slow to fund.
- Collateral and/or down payment may be required.
SBA CAPLines of credit
Best for working capital
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Line of credit options for seasonal, working capital, building and contracting needs.
- Large maximum borrowing amounts.
- Competitive interest rates and repayment terms.
Cons
- Typically requires good credit and multiple years in business.
- Slow to fund.
- Collateral and/or down payment may be required.
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.90-84.90%
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
OnDeck - Line of credit
Best for instant access to preapproved funds
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.90-84.90%
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
Backd - Line of credit
4.5
Best for bad credit
Max loan amount
$750,000
Min. credit score
600
Est. APR
42.08-63.17%
Pros
- Fast access to funds.
- Simple application with minimal documentation required.
- Large maximum funding amounts.
- Accessible to startups and borrowers with bad credit.
Cons
- High annual revenue requirement.
- Requires weekly repayment.
- Charges a draw fee.
- Interest rates can be high compared with traditional lenders.
Backd - Line of credit
Best for bad credit
4.5
Max loan amount
$750,000
Min. credit score
600
Est. APR
42.08-63.17%
Pros
- Fast access to funds.
- Simple application with minimal documentation required.
- Large maximum funding amounts.
- Accessible to startups and borrowers with bad credit.
Cons
- High annual revenue requirement.
- Requires weekly repayment.
- Charges a draw fee.
- Interest rates can be high compared with traditional lenders.
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Headway Capital - Line of credit
Best for low-revenue businesses
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Fundbox - Line of credit
Best for fast approval and access to funds
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Max loan amount
$50,000
Min. credit score
680
Est. APR
12.00-14.00%
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
- Does not charge an origination fee.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Wells Fargo Small Business Advantage® Line of Credit
Best for low interest rates
Max loan amount
$50,000
Min. credit score
680
Est. APR
12.00-14.00%
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
- Does not charge an origination fee.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Bank of America Business Advantage Cash Secured Line of Credit
Best for secured startup business lines of credit
Max loan amount
Undisclosed
Min. credit score
670
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Bank of America Business Advantage Cash Secured Line of Credit
Best for secured startup business lines of credit
Max loan amount
Undisclosed
Min. credit score
670
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Concerned about tariffs?
Many small-business owners are under increased economic stress and uncertainty following the latest tariff announcements. NerdWallet is here to help you find answers for whatever you're looking for. Here are some resources to help you get started:
- Need emergency funding? Consider a business line of credit.
- Looking for fast access to working capital? Discover the best working capital loans.
- Want tips on how to mitigate the impact of tariffs? Read our guide.
What is a startup business line of credit?
A business line of credit lets you withdraw funds up to a predetermined amount — and only pay interest on the money you withdraw. Once you repay the funds you’ve borrowed, you can continue to draw on the line.
Startup business lines of credit are available to companies in the early stages of growth. For lending purposes, a “startup” typically refers to a business with less than two years in operation.
Use our business line of credit calculator to compare potential costs and payments on different offers:
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
Pros and cons of a startup business line of credit
Pros
A business line of credit is one of the most flexible forms of business funding. You can use a line of credit for a range of short-term purposes, including managing cash flow, covering emergencies or taking advantage of unexpected opportunities. Flexibility makes this financing solution well-suited for the unpredictability of running a startup business.
You can draw funds from your credit line and have access to cash quickly — when you actually need it — and only pay interest on the funds you draw. Plus, when you repay what you’ve borrowed, you can continue to draw on the line.
A business line of credit for new businesses can build a positive business credit history, which can help you to obtain future credit accounts and loans. Making your payments on time and keeping your credit utilization ratio at or below 30% can help your business credit — as long as your lender reports responsible spending to the business credit bureaus.
Cons
Annual percentage rates on some startup business lines of credit can run high, as newer businesses generally pose a greater risk to lenders compared with more established businesses. To qualify for the best possible rates, it can help to show solid business financials and strong credit history — and, in some cases, secure your line of credit with collateral.
Not all lenders offer startup business lines of credit, and there can be limitations for the ones that do. Plus, getting a business line of credit for a startup without revenue can be even more challenging. Compared with credit lines available for more established businesses, for example, business lines of credit for new businesses may have smaller borrowing limits and shorter repayment terms.
Even if you can qualify for a startup business line of credit, it’s important to make sure you can afford to take on potential debt. Finances can be tight when running a startup and you need to be able to repay borrowed funds if your business slows — or even fails. If you can’t repay your line of credit, it will likely impact your personal credit and finances. Most lenders will require you to sign a personal guarantee so that you’re individually responsible for paying back your debt, even if your business fails.
Want to consider other options?
If you’re not sure that a business line of credit is right for your new business, here are some alternative options for startup funding:
- If you want an option to build your business credit history, consider a startup business credit card.
- If you have strong personal finances, consider a personal business loan.
- If you don’t want to take on any additional debt, consider startup business grants.
How to get a startup business line of credit
1. Evaluate your financing needs
Determine how much business capital you need and how you’re going to use it. Consider your existing finances and budget to ensure that you’ll be able to afford any potential debt you take on. You can use NerdWallet's business line of credit calculator to get an idea of how much you’ll need to pay each period.
2. Review your qualifications
Lenders typically use similar criteria to underwrite your line of credit application, including personal credit score, annual revenue and time in business. To qualify for a startup business line of credit, it’s helpful to have:
- Credit score: 600 or higher.
- Annual revenue: $50,000 or more (Or around $4,167 per month).
- Time in business: Six months or more.
Offering assets to secure your business line of credit can also boost your chances of approval, and may help you access better rates if you are approved. Although many online lenders won’t require collateral, you may consider what you have available before you apply.
3. Research and compare lenders
Most startup business lines of credit are available from online lenders — although you may be able to find a local or community bank that is willing to lend to newer businesses. As you compare your options, consider borrowing limits, interest rates, fees, funding speed and lender reputation.
Be wary of any lender that promises “guaranteed approval” or makes other claims that seem too good to be true. These could be predatory companies trying to take advantage of your business.
4. Gather your documents and apply
You may need to include any of the following in your application to get a business line of credit:
- Business registration documents.
- Personal and business bank statements.
- Personal and business tax returns.
- Business financial statements, such as a profit and loss statement and balance sheet.
Some online lenders allow you to complete your line of credit application by connecting your financial accounts — like a business checking account or accounting software — to their platform in order to expedite the underwriting process.
Whether you connect your financial accounts or upload financial documents, the more information you can provide that shows your business’s ability to repay the debt, the more likely you are to qualify for a startup line of credit with the best possible business loan rates and terms.
MORE NERDY PERSPECTIVE
A business line of credit can be a great tool for growth during a startup’s early stages
"I used to work in small-business lending and I’ve seen firsthand how a line of credit can serve as a safety net for newer businesses that are operating and earning revenue, but still getting up and running on certain aspects of the business.
Even with careful planning, it’s not always possible for businesses to anticipate every need when applying for initial capital, so having a credit line tucked away for unexpected expenses or opportunities is crucial during those early stages of growth.
Even if you pay an account maintenance fee on a business line of credit, it can be safer and less expensive than risky emergency funding options if you are caught off guard."
Olivia Chen,
lead writer,
Small Business
Where to get a startup business line of credit for a new business
Online lenders
Online lenders can be good options for newer businesses, depending on the lender your business may only need six to 12 months in operation to qualify. Typically, online lenders have streamlined application processes and can provide financing within 24 hours.
Compared with bank lenders, online lenders are less likely to require physical collateral to secure a line of credit, but they may still back the line with a personal guarantee or Uniform Commercial Code lien. Some online lenders will also work with startups with bad personal credit scores – usually 629 or below by industry standards.
SBA lenders
SBA lines of credit are available through SBA lenders that partner with the Small Business Administration. Called CAPLines, these lines of credit are designed to meet the cyclical or short-term needs of small businesses as related to seasonal sales, contracts, builder construction or working capital.
Seasonal CAPLines can be an option for a business line of credit for new businesses that have seasonal sales and have been in operation for at least 12 months. The line can be used to supplement cash flow when a business’s sales slow during the offseason or when expenses for labor and supplies increase before the start of a new season.
Traditional banks
Startups usually don’t qualify for business lines of credit offered by banks and credit unions. Traditional lenders generally require that borrowers have two or more years in business for both secured and unsecured business lines of credit.
There are exceptions, however. Both Wells Fargo and Bank of America offer a line of credit for businesses with less than two years in operation.
How to compare startup business lines of credit
The best startup business line of credit will likely be the most affordable one you can qualify for that meets your needs. As you compare your options, consider the following factors:
- Borrowing limits. Some lenders may offer lines of credit up to $250,000, whereas others will only offer up to $50,000. You’ll want to know how much funding you need when looking at your options. Taking less than you need can place a burden on your business’s cash flow, and can make you vulnerable to risky loan stacking practices. Keep in mind that larger funding amounts may be more difficult to qualify for than smaller ones.
- Repayment schedule. Startup business lines of credit can have daily, weekly or monthly repayments. Frequent payments can be harder to manage when you’re just starting out and cash flow is tight. Make sure that you can afford the potential repayment schedule.
- Interest rates. Rates on business lines of credit range anywhere from 10% to 99%. To qualify for the best rates, it’s helpful to have good credit and strong finances.
- Fees. Lenders may charge draw fees, monthly maintenance fees, origination fees or other additional fees. Make sure you consider these costs when determining the overall expense of a line of credit. You can ask your lender for a fee schedule.
- Collateral. Although not all startup business lines of credit require collateral, providing collateral (or offering more than needed) may help you qualify, especially if some of your credentials aren’t where you’d like them to be.
- Funding speed. Online lenders typically provide the fastest access to funds, although they charge higher interest rates. If you can wait for bank or SBA funding (and can qualify), you'll likely save on interest costs.
- Lender reputation. It can be useful to read online reviews to get a better sense of what it’s like working with a particular small-business lender. Be wary of companies that try to rush you through the underwriting process or aren’t transparent about their rates and fees.
- Building business credit. If you can, prioritize lenders that report to major credit bureaus so you can build your business credit. This is especially important as a newer business. Just like personal credit, strong business credit can help you get approved for financing and more favorable terms in the future.
Frequently asked questions
Yes, once you’ve been in business for at least three to 12 months, your startup may be able to qualify for a business line of credit. If your business is newer than that, you should consider other forms of financing, like business credit cards.
Typically, no. In general, you need several months’ worth of revenue history to get a business line of credit. Most lenders include a minimum monthly or annual revenue requirement in their loan applications. If your business has steady but low revenue, consider Fundbox’s line of credit, which is available to businesses with about $30,000 in annual revenue ($2,500 per month) .
Many lenders offer business lines of credit that are unsecured, though you’ll usually have to sign a personal guarantee, which is a promise that you will personally repay the lender if your business is unable to. Lenders may also place a UCC lien on your business, allowing them to seize your business assets if you default.
Last updated on March 19, 2025
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
To come up with our list of the best startup business lines of credit, we selected lenders with a minimum time in business requirement of less than two years.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Wondering if you qualify?
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