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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.
Here are 6 startup business lines of credit
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
American Express® Business Line of Credit | 4.5/5 Best for Startup business lines of credit with monthly payments | $250,000 | 660 | Read Review |
Fundbox - Line of credit | 5.0/5 Best for Startup business lines of credit for bad credit | $150,000 | 600 | Read Review |
OnDeck - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Unsecured business lines of credit for startups | $100,000 | 625 | with Fundera by NerdWallet |
Wells Fargo - Line of credit | 5.0/5 Best for Bank startup business lines of credit | $50,000 | 680 | Read Review |
Bank of America Cash Secured Line of credit | Best for Secured business lines of credit for startups | $0 | 670 | Read Review |
Headway Capital - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Fast business lines of credit for startups | $100,000 | 600 | with Fundera by NerdWallet |
Here are 6 startup business lines of credit
Best for Startup business lines of credit with monthly payments
Best for Startup business lines of credit for bad credit
Best for Unsecured business lines of credit for startups
Best for Bank startup business lines of credit
Best for Secured business lines of credit for startups
Best for Fast business lines of credit for startups
Our pick for
Startup business lines of credit with monthly payments
Some lenders require weekly or even daily payments, which can constrain a new business’s cash flow. But American Express offers credit lines from $2,000 to $250,000 with monthly payments for companies that started their business at least a year ago.
American Express® Business Line of Credit
Max loan
$250,000
Min. Credit score
660
Our pick for
Startup business lines of credit 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
Max loan
$150,000
Min. Credit score
600
Apr range
10.10-79.80%
Our pick for
Unsecured business lines of credit for startups
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
Max loan
$100,000
Min. Credit score
625
Apr range
39.90-77.90%
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 over 20% is required to sign a personal guarantee.
Wells Fargo - Line of credit
Max loan
$50,000
Min. Credit score
680
Apr range
13.00-15.00%
Our pick for
Secured business lines of credit for startups
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
Max loan
$0
Min. Credit score
670
Our pick for
Fast business lines of credit for startups
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
with Fundera by NerdWallet
Max loan
$100,000
Min. Credit score
600
Apr range
40.00-80.00%
with Fundera by NerdWallet
How do business lines of credit work?
Where to get a startup business line of credit
Pros and cons of a startup business line of credit
Pros
- Flexible form of financing. 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.
- Access to fast cash. 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.
- Build business credit. Spending responsibly with a business line of credit may allow you to build a positive business credit history, which can help you 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
- Can be expensive. Annual percentage rates on some startup business lines of credit can run high, as newer businesses generally pose a greater risk to lenders compared to 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 with collateral.
- Limited options. Not all lenders offer startup business lines of credit, and there can be limitations for the ones that do. Compared to credit lines available to more established businesses, for example, business lines of credit for startups may have smaller borrowing limits and shorter repayment terms.
- Personal financial risk. 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.
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.
How to apply for a startup business line of credit
- Credit score: 600 or higher.
- Annual revenue: $100,000 or more (Or at least $8,333 per month).
- Time in business: Six months or more.
- 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.
Other startup financing options
- Startup business credit cards. Your time in business is usually not considered when applying for business credit cards. They can help cover everyday purchases and small to medium-sized startup expenses while you build your business.
- Personal business loans. If your personal finances are in good shape, you may be able to take out a personal 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.
- Friends, family and crowdfunding. If you don’t want to take on debt from a financial institution, consider turning to your personal network for investment — whether that’s by asking friends and family for funding directly or through a crowdfunding campaign.
Find the right business loan
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.