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Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 4 business lines of credit
| Lender | NerdWallet Rating | Max loan amount | Min. credit score | Next steps |
|---|---|---|---|---|
Wells Fargo - Line of credit | 5.0/5 Best for Bank business lines of credit | $50,000 | 680 | Read Review |
Bluevine - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Business lines of credit for bad credit | $250,000 | 625 | with Fundera by NerdWallet |
OnDeck - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Unsecured business lines of credit | $100,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Startup business lines of credit | $150,000 | 600 | Read Review |
Here are 4 business lines of credit
Best for Bank business lines of credit
Best for Business lines of credit for bad credit
Best for Unsecured business lines of credit
Best for Startup business lines of credit
Our pick for
Bank business lines of credit
Wells Fargo offers business lines of credit of up to $50,000 that are well-suited for borrowers with strong credit. You may be able to qualify with less than two years in business.
Wells Fargo - Line of credit
Max Loan Amount
$50,000
Min. credit score
680
Est. APR
12.75-14.75%
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.
Max loan
$50,000
Min. Credit score
680
Apr range
12.75-14.75%
Our pick for
Business lines of credit for bad credit
Bluevine offers fast funding up to $250,000 for borrowers with a credit score of 625 or higher.
Bluevine - Line of credit
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's 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%
Our pick for
Unsecured business lines of credit
OnDeck offers business lines of credit of up to $100,000 and doesn’t require physical collateral. Borrowers are subject to UCC blanket liens, however, and will be required to sign a personal guarantee.
OnDeck - Line of credit
Max Loan Amount
$100,000
Min. credit score
625
Est. APR
29.90-65.90%
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
29.90-65.90%
Our pick for
Startup business lines of credit
Fundbox offers quick funding of up to $150,000 for borrowers with at least six months in business.
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
10.10-79.80%
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
10.10-79.80%
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 a more flexible form of financing.
With a line of credit, you receive access to a set amount of capital — say, $150,000 — 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.
Business line of credit rates and fees
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.
- Account maintenance fee: Monthly or annual fee associated with managing your account and keeping your business line of credit active.
- Draw fee: Fee charged each time you draw on your credit line.
- Inactivity fee: A lender may charge this fee if you don’t draw from your line of credit within a specified period of time.
Secured vs. unsecured business lines of credit
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, a 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 a business’s assets.
A personal guarantee gives a lender the right to go after your personal assets, like your house, if you default on a loan. A UCC lien is similar; a lender can seize your business assets if you haven’t repaid a loan.
When comparing lenders, ask whether they require collateral, a personal guarantee or a lien so that you can find the option that’s best for your business.
Business line of credit vs. credit card
Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways.
Business line of credit | Business credit card |
Higher credit limit. | Lower credit limit. |
Provides actual cash in your bank account when you make a draw. | Cards are used for purchases; you can get cash, but you’ll be charged a cash advance fee to do so. |
May be secured by collateral. | Can be secured by collateral, but not as common. |
Doesn’t typically include rewards. | Often have rewards or cash back for spending; rewards are typically related to business expenses. |
No interest-free period. | May include 0% interest promotion, which allows you to pay no interest on your balance for a specific time period after signing up for the card. |
Lower interest rates than credit cards. | Higher interest rates than lines of credit. |
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 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
Banks and credit unions
Banks and credit unions can offer different types of business credit lines, including secured and unsecured business lines of credit, as well as SBA 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 and credit history, 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
Online lenders, like Bluevine and Fundbox, generally have more flexible business line of credit requirements compared to banks and credit unions. Some online lenders will work with startups or businesses with bad credit.
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.
To get a business line of credit, you can follow these steps:
1. Evaluate your financing needs
You’ll initially want to determine why you need funding and how quickly you need it. If you’re looking for working capital to cover payroll, for example, you may need financing as quickly as possible. On the other hand, if you want to keep a line of credit in your back pocket as an emergency fund, you may not be in such a rush.
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
Next, you'll want to evaluate your business's credentials — time in business, annual revenue, personal credit score — to determine what lines of credit you can qualify for.
Traditional lenders, like banks and credit unions, will likely have stricter qualifications, requiring multiple years in business and a strong credit history. Online lenders can be more lenient and some may be willing to work with startups and/or borrowers with bad credit.
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 lenders to find the right option for your business.
Ultimately, you can apply for a business line of credit through a bank, credit union, online lender, or even work with an online marketplace to submit a single application and compare offers from multiple lenders at the same time.
Interest rates, borrowing limits and qualifications can 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).
You may also be required to provide physical collateral or sign a personal guarantee.
Depending on your lender, it may take anywhere from 24 hours to several weeks to complete the application, underwriting and funding processes.
Find the right business loan
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on May 16, 2023
Methodology
NerdWallet reviewed both traditional and online lenders in order to create our list of the best business lines of credit.
Our list includes a variety of loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our list meets the following criteria:
-- Maximum loan amount of at least $50,000.
-- Transparent rates and repayment terms.
-- Funding available within two weeks of applying.
-- Personal credit score requirements of 680 or below.
-- No more than two years in business required.
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
Learn more
Frequently Asked Questions
A business line of credit allows you to borrow from a set limit of funds and only pay interest on the money you borrow — similar to how a credit card works.
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 — often 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 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.