How much do you need?
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.
Here are 7 of the best startup business lines of credit
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
OnDeck - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Unsecured startup business lines of credit | $100,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit Read Review | 5.0/5 Best for Bad credit | $150,000 | 600 | Read Review |
Headway Capital - Line of credit | 4.7/5 Best for Fast funding | $100,000 | 625 | with Fundera by NerdWallet |
Wells Fargo Small Business Advantage® Line of Credit Read Review | 4.9/5 Best for Bank startup business lines of credit | $50,000 | 680 | Read Review |
Bank of America Cash Secured Line of credit Read Review | 4.7/5 Best for Secured startup business lines of credit | Undisclosed | 670 | Read Review |
American Express® Business Line of Credit* Read Review | 5.0/5 Best for American Express customers | $250,000 | 660 | Read Review |
SBA CAPLines of credit | Best for Seasonal businesses | $5,000,000 | 650 | with Fundera by NerdWallet |
Here are 7 of the best startup business lines of credit
Best for Unsecured startup business lines of credit
Best for Bad credit
Best for Fast funding
Best for Bank startup business lines of credit
Best for Secured startup business lines of credit
Best for American Express customers
Best for Seasonal businesses
I'M INTERESTED IN:
Our pick for
Unsecured startup business lines of credit
OnDeck offers business lines of credit for startups with 12 months or more in business, and it 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
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
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.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: 12 months.
- Minimum annual revenue: $100,000.
- No bankruptcies in the past two years.
Our pick for
Bad credit
Fundbox offers credit lines for startups with six months or more in business; it accepts borrowers with credit scores of 600 or higher.
Fundbox - Line of credit
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
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).
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 3 months.
- Minimum annual revenue: $30,000.
Our pick for
Fast funding
Headway Capital is a small-business lender specializing in lines of credit that range from $5,000 to $100,000. It offers weekly or monthly repayment options, and once approved, you can receive funding as soon as the next business day.
Headway Capital - Line of credit
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
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.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: Six months.
- Minimum annual revenue: $50,000.
Our pick for
Bank startup business lines of credit
Wells Fargo’s Small Business Advantage line of credit is available for startups under two years old. There is no annual fee, and line of credit amounts range from $5,000 to $50,000. Any owner of over 20% is required to sign a personal guarantee.
Wells Fargo Small Business Advantage® Line of Credit
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
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.
Qualifications:
- Minimum credit score: 680.
- Available to borrowers with less than 24 months in business.
- Household personal liquid assets must be less than $500,000.
- Must meet standard SBA loan requirements.
Our pick for
Secured startup business lines of credit
Bank of America offers a cash secured line of credit for businesses in operation for a minimum of six months. Your credit limit is the amount of cash you put down as a security deposit, which is refundable whenever you decide to close your account. This is a good option for businesses looking to build credit and work toward unsecured options.
Bank of America Cash Secured Line of credit
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 Cash Secured Line of credit
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.
Qualifications:
- Minimum time in business: Six months.
- Minimum annual revenue: $50,000 per year.
- Bank of America checking or savings account required.
- Minimum deposit of $1,000.
Our pick for
American Express customers
Companies that started their business at least a year ago may be able to qualify for the American Express business line of credit. Existing American Express customers can use their accounts to find out if they prequalify.
American Express® Business Line of Credit*
Pros
- Streamlined application process with minimal paperwork.
- Financing from $2,000 to $250,000 available.
- Accepts borrowers with a minimum FICO score of at least 660 at the time of application.
- Monthly repayment schedule (as opposed to daily or weekly).
- No prepayment penalties, account maintenance fees or draw fees.
Cons
- Must have online checking or PayPal account to verify cash flow.
- Complex monthly fee structure makes it difficult to compare costs to other lenders.
American Express® Business Line of Credit*
Pros
- Streamlined application process with minimal paperwork.
- Financing from $2,000 to $250,000 available.
- Accepts borrowers with a minimum FICO score of at least 660 at the time of application.
- Monthly repayment schedule (as opposed to daily or weekly).
- No prepayment penalties, account maintenance fees or draw fees.
Cons
- Must have online checking or PayPal account to verify cash flow.
- Complex monthly fee structure makes it difficult to compare costs to other lenders.
Qualifications:
- Minimum FICO score of at least 660 at the time of application. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
- Must have started your business at least a year ago.
- Average monthly revenue of at least $3,000.
- All businesses are unique and are subject to approval and review.
- American Express® Business Line of Credit offers two loan types, installment loans and single repayment loans for eligible borrowers. All loan term types, loan term lengths, and pricing are subject to eligibility requirements, application, and final approval. This article contains general information about the American Express® Business Line of Credit installment loan type only.
Our pick for
Seasonal businesses
Seasonal CAPLines, one of the four SBA CAPLines, are available to small businesses that have been operating for at least a year and experience seasonal revenue fluctuations. Funds can be used to finance seasonal increases in accounts receivable, inventory costs and labor expenses.
SBA CAPLines of credit
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
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.
Qualifications:
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
How to compare startup business lines of credit
- 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. 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 any potential payments.
- 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. Ask lenders to provide a breakdown of their line of credit fees. They may charge additional fees such as draw fees, monthly maintenance fees or origination fees. Make sure you consider these fees when determining the overall cost of a line of credit.
- 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.
- Funding speed. Online lenders can typically provide the fastest access to funds, although they’ll charge higher interest rates. If you can wait for bank or SBA funding (and can qualify), you may be able to 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.
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.
Pros and cons of a startup business line of credit
Pros
Cons
Where to get a startup business line of credit for a new business
Online lenders
SBA lenders
Traditional banks
Alternatives to lines of credit for new businesses
- You want an option to build your business credit history. Your time in business is usually not considered when applying for startup business credit cards. They can help cover everyday purchases and small to medium-sized startup expenses while you build your business credit history at the same time.
- You have strong personal finances. If your personal finances are in good shape, you may be able to take out a personal business loan to help fund your new business. You’ll probably be able to borrow more money this way than you could with a business credit card.
- You have family and friends who support your new business. If you don’t qualify for financing from a financial institution, consider turning to your personal network for funding. Family and friends financing typically involves asking friends and family for a loan or offering equity in your business for their cash investment.
- You don’t want to take on any additional debt. Startup business grants can be an option for funding your business. However, you’ll face competition for this “free money” and also need to set aside time to find and apply for grants.
- You have a compelling story or offer a unique product. Crowdfunding for business can be used to fund your startup. It can be an inexpensive way to raise money and build a base of customers interested in purchasing your products and services online. Also, equity crowdfunding can be used to sell shares to family, friends and others who are interested in investing in your new business.
Frequently asked questions
Methodology
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.