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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 7 startup business lines of credit
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
Fundbox - Line of credit | 5.0/5 Best for Startup business lines of credit for bad credit | $150,000 | 600 | |
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 Small Business Advantage® Line of Credit | 5.0/5 Best for Bank startup business lines of credit | $50,000 | 680 | |
Bank of America Cash Secured Line of credit | 5.0/5 Best for Secured business lines of credit for startups | Undisclosed | 670 | |
Headway Capital - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Fast business lines of credit for startups | $100,000 | 625 | with Fundera by NerdWallet |
American Express® Business Line of Credit | 5.0/5 Best for Startup business lines of credit with monthly payments | $250,000 | 660 | |
SBA CAPLines of credit with Fundera by NerdWallet | Best for Seasonal businesses | $5,000,000 | 650 | with Fundera by NerdWallet |
Here are 7 startup business lines of credit
Best for Startup business lines of credit for bad credit
Max Amount
$150,000
Min. Credit Score
600
Best for Unsecured business lines of credit for startups
Best for Bank startup business lines of credit
Max Amount
$50,000
Min. Credit Score
680
Best for Secured business lines of credit for startups
Max Amount
Undisclosed
Min. Credit Score
670
Best for Fast business lines of credit for startups
Best for Startup business lines of credit with monthly payments
Max Amount
$250,000
Min. Credit Score
660
Best for Seasonal businesses
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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
36.00-99.00%
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
with Fundera by NerdWallet
Max loan
$100,000
Min. Credit score
625
Apr range
35.90-84.90%
with Fundera by NerdWallet
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
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
Undisclosed
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
625
Apr range
35.00-80.00%
with Fundera by NerdWallet
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 and have an average monthly revenue of $3,000.
American Express® Business Line of Credit
Max loan
$250,000
Min. Credit score
660
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
with Fundera by NerdWallet
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
How do business lines of credit work?
🤓 Nerdy Tip
A startup business is usually defined as a business in the early stages of growth. It may refer to pre-revenue businesses that haven’t started operating yet, or businesses that have been operating for a couple of years. For lending purposes, most banks want to see at least two years of operation, so businesses that don’t meet that threshold are often referred to as startups.Where to get a startup business line of credit for a new business
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 of credit with collateral.
- Limited options. Not all lenders offer startup business lines of credit, and there can be limitations for the ones that do. And getting a business line of credit for a startup without revenue can be even more challenging. Compared to credit lines available to more established businesses, for example, business lines of credit for new businesses 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 business line of credit for new businesses
- 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.
Alternatives to new business lines of credit
- 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.
- Startup business grants. 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.
- Family and friends financing. If you don’t want to take on debt from a financial institution, consider turning to your personal network for funding — whether that’s by asking friends and family for a loan or offering equity in your business for their cash investment.
- Crowdfunding for business. Crowdfunding can be used to fund your startup business. 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.
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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.
