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Business Line of Credit: Compare the Best Options

By Randa Kriss, Edited by Sally Lauckner | Last updated on January 3, 2023
A business line of credit can finance short-term expenses, like payroll or inventory. Both traditional and online lenders offer business lines of credit.

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A business line of credit allows you to borrow up to a certain limit and only pay interest on the money you borrow — similar to the way a credit card works. You then repay the funds and can continue to draw on the line.
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. Business lines of credit can be used for a variety of short-term needs, such as managing cash flow, buying inventory or covering payroll.
Below, learn more about how business lines of credit work and compare some of the best options from online and bank lenders.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

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Here are 5 business lines of credit

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Lender
NerdWallet Rating
Max loan amount
Min. credit score
Next steps

American Express Business Blueprint™ - Line of credit

on American Express Business Blueprint™'s website

4.5/5

Best for Business lines of credit with monthly payments

$250,000640

on American Express Business Blueprint™'s website

PNC Bank - Line of credit

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Best for Bank business lines of credit

$100,000720

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Bluevine - Line of credit

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5.0/5

Best for Business lines of credit for bad credit

$250,000625

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OnDeck - Line of credit

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5.0/5

Best for Unsecured business lines of credit

$100,000625

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Fundbox - Line of credit

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5.0/5

Best for Startup business lines of credit

$150,000600

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Here are 5 business lines of credit

Best for Business lines of credit with monthly payments

American Express Business Blueprint™

Max Amount

$250,000

Min. Credit Score

640

Best for Bank business lines of credit

PNC Bank

Max Amount

$100,000

Min. Credit Score

720

Best for Business lines of credit for bad credit

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured business lines of credit

OnDeck

Max Amount

$100,000

Min. Credit Score

625

Best for Startup business lines of credit

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Our pick for

Business lines of credit with monthly payments

American Express offers lines of credit from $2,000 to $250,000 that are repaid on a monthly basis.

American Express Business Blueprint™ - Line of credit

4.5
NerdWallet rating 
Read Review

on American Express Business Blueprint™'s website

Max Loan Amount
$250,000
Min. credit score
640
American Express Business Blueprint™ loans are a good option for business owners with fair credit who want access to working capital.
4.5
NerdWallet rating 

Max loan

$250,000

Min. Credit score

640

American Express Business Blueprint™ loans are a good option for business owners with fair credit who want access to working capital.
Read Review

on American Express Business Blueprint™'s website

Our pick for

Bank business lines of credit

PNC offers lines of credit of up to $100,000 that are well-suited for established businesses with strong credit. The PNC business line of credit can be funded as quickly as the same business day.

PNC Bank - Line of credit

Read Review

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Max Loan Amount
$100,000
Min. credit score
720
Est. APR
15.49-17.49%
PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.

Max loan

$100,000

Min. Credit score

720

Apr range

15.49-17.49%

PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.
Read Review

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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

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

625

Apr range

20.00-50.00%

Bluevine's line of credit provides fast working capital for short-term borrowing needs.
Read Review

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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

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

Max loan

$100,000

Min. Credit score

625

Apr range

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.
Read Review

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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

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

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
5.0
NerdWallet rating 

Max loan

$150,000

Min. Credit score

600

Apr range

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.
Read Review

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How Much Do You Need?

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General Qualifications

This is a common profile for our borrowers but we have a wide number of options for many business owners.

Credit Score

550 or higher

Annual Revenue

at least $50k

Time in Business

6 months or more

How does a business line of credit work?

A business line of credit works similarly to a credit card. 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. Many lenders allow you to repay your full balance early to save on interest costs. Some lenders charge additional fees, 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.
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. Because small-business lines of credit are revolving, they’re much more flexible than business term loans, which require you to repay a lump sum of funds over a fixed term.
» MORE: Is a business loan or line of credit right for you?

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 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 lines of credit vs. business credit cards

Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways.
A business line of credit can provide a higher credit limit, may be secured by collateral and provides actual cash in your bank account when you make a draw. You can get cash with a business credit card, but you’ll be charged fees (usually called a cash advance fee) and a higher APR to do so.
Business credit cards, however, can provide rewards or cash back for spending — which is not something offered by traditional lines of credit. Rewards are typically related to business expenses, such as office supplies, gas, internet and cable. They may also offer 0% interest promotions, which allow you to pay no interest on your balance for a specific time period after signing up for the card.
Business credit cards 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

Loan calculator icon

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.

Not sure? See estimated rates on online business loans and SBA loans.
Monthly payment
$0.00
Total payments
$0.00
Total interest paid
$0.00

Where to get a business line of credit

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.
» MORE: Compare the best startup business lines of credit

How to get a business line of credit

To get a business line of credit, you'll initially want to determine how much funding you need and how quickly you need it. 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.
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.
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 January 3, 2023

Methodology

NerdWallet reviewed both traditional and online lenders in order to create our list of the best small-business loans.
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 $100,000. -- Transparent rates and repayment terms. -- Funding available within two weeks of applying. -- Personal credit score requirements of 720 or below. -- No more than three years in business required.

Frequently Asked Questions

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