Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
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Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
our
Editorial Guidelines.
Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small business and personal finance.
50+ categories of the best business loan selections.
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
Advertiser disclosure
You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
A working capital line of credit is a type of short-term financing that’s used to cover a business’s operating expenses, such as rent, payroll or inventory. These small-business loans are not used to fund large investments, like opening a new location or purchasing real estate.
Working capital lines of credit are available from a wide range of lenders and can be particularly useful for businesses that experience cash flow gaps or seasonal slows.
Below, compare some of the best options and learn more about how these credit lines work.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small business and personal finance.
50+ categories of the best business loan selections.
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
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.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
Wells Fargo Small Business Advantage® Line of Credit
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.
The Wells Fargo Small Business Advantage line of credit stands out as an unsecured option for businesses with less than two years in operation. This credit line offers low interest rates, no annual fee and a long repayment term, without requiring a scheduled annual review. Wells Fargo also includes an exclusive rewards program with this line of credit. Like a credit card, you can earn points when making purchases with the provided Mastercard access card.
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.
Wells Fargo Small Business Advantage® Line of Credit
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.
The Wells Fargo Small Business Advantage line of credit stands out as an unsecured option for businesses with less than two years in operation. This credit line offers low interest rates, no annual fee and a long repayment term, without requiring a scheduled annual review. Wells Fargo also includes an exclusive rewards program with this line of credit. Like a credit card, you can earn points when making purchases with the provided Mastercard access card.
Minimum credit score: 680.
Available to borrowers with less than 24 months in business.
Household personal liquid assets must be less than $500,000.
Financing available within two business days 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 is one of the best online line of credit options for startups. Businesses with just three months in business may be able to qualify. Fundbox is also a good option for borrowers with bad credit and businesses with low revenue. The lender offers a flexible short-term line of credit that can fund within two business days after approval.
Minimum credit score: 600.
Minimum time in business: 3 months.
Minimum annual revenue: $30,000.
Fundbox - Line of credit
Best for Working capital lines of credit for startups
Financing available within two business days 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 is one of the best online line of credit options for startups. Businesses with just three months in business may be able to qualify. Fundbox is also a good option for borrowers with bad credit and businesses with low revenue. The lender offers a flexible short-term line of credit that can fund within two business days after approval.
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’s fast line of credit is a standout option for small-business owners with less-than-stellar credit who need working capital. This line of credit offers flexible repayment options, allowing you to choose between three term options and a weekly or monthly frequency. It’s also a good option for borrowers who don’t want to risk their company assets; OnDeck’s line of credit does not require physical collateral and it doesn’t take a UCC lien out on your business.
Minimum credit score: 625.
Minimum time in business: 12 months.
Minimum annual revenue: $100,000.
No bankruptcies in the past two years.
OnDeck - Line of credit
Best for Unsecured working capital lines of credit
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’s fast line of credit is a standout option for small-business owners with less-than-stellar credit who need working capital. This line of credit offers flexible repayment options, allowing you to choose between three term options and a weekly or monthly frequency. It’s also a good option for borrowers who don’t want to risk their company assets; OnDeck’s line of credit does not require physical collateral and it doesn’t take a UCC lien out on your business.
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 offers a fast and flexible business line of credit that’s a good option for those who can’t qualify for traditional financing. The lender can work with startups and businesses with low revenue. Headway can fund applications as fast as the next day after approval. Unlike some online lines of credit, however, you’ll likely have to pay a draw fee to access your funds from Headway.
Minimum credit score: 625.
Minimum time in business: Six months.
Minimum annual revenue: $50,000.
Headway Capital - Line of credit
Best for Working capital lines of credit for bad credit
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 offers a fast and flexible business line of credit that’s a good option for those who can’t qualify for traditional financing. The lender can work with startups and businesses with low revenue. Headway can fund applications as fast as the next day after approval. Unlike some online lines of credit, however, you’ll likely have to pay a draw fee to access your funds from Headway.
Minimum credit score: 625.
Minimum time in business: Six months.
Minimum annual revenue: $50,000.
Chase - Business line of credit
Best for High-limit working capital lines of credit
Must have a Chase Business Banking account to apply online.
Not available in Alaska and Hawaii.
Annual fee may apply.
Limited information on terms and fees available online.
If you’re looking for a line of credit from a big bank, Chase offers a revolving credit line with repayment terms of five years. The lender offers large credit line amounts with variable rates based on the prime rate. To qualify, you’ll need to be an established business and may need to provide collateral. Unlike some bank options, you’ll likely need to visit a branch location to apply.
Minimum credit score: 700.
Minimum time in business: Two years with some flexibility.
Minimum annual revenue: Not disclosed
Chase - Business line of credit
Best for High-limit working capital lines of credit
Must have a Chase Business Banking account to apply online.
Not available in Alaska and Hawaii.
Annual fee may apply.
Limited information on terms and fees available online.
If you’re looking for a line of credit from a big bank, Chase offers a revolving credit line with repayment terms of five years. The lender offers large credit line amounts with variable rates based on the prime rate. To qualify, you’ll need to be an established business and may need to provide collateral. Unlike some bank options, you’ll likely need to visit a branch location to apply.
Minimum credit score: 700.
Minimum time in business: Two years with some flexibility.
Minimum annual revenue: Not disclosed
What is a working capital line of credit?
A working capital line of credit is used specifically to finance short-term operating expenses, as opposed to investing in one purchase or long-term project. You might use this business line of credit to pay for rent, payroll, utilities, inventory, supplies, emergency expenses, employee training or large order fulfillments.
What is working capital?
Working capital is the difference between your business’s current assets (cash, accounts receivable, inventory) and its current liabilities (accounts payable and debts). This metric provides an evaluation of your business’s short-term financial health and refers to the capital that you have available to spend on day-to-day expenses.
A working capital line of credit allows you to borrow up to a certain limit and pay interest only on the funds you draw.
You then repay the money you’ve borrowed, usually weekly or monthly. You can continue to draw on the line as needed — provided you make timely payments and don’t exceed your credit limit.
Working capital credit lines can be secured or unsecured. Secured business lines of credit are backed by physical collateral, like inventory or equipment, whereas unsecured lines don’t require physical collateral.
Working capital loan vs. line of credit
The main distinction between working capital loans and working capital lines of credit is the way that they’re structured. Whereas a credit line offers a specific amount of funds that you can draw from as needed, a working capital loan provides a lump sum of cash upfront that you repay over a set period of time.
As a result, you may find some working capital loans — especially those issued by online lenders — offer larger funding amounts and longer repayment terms compared with line of credit options. Ultimately, however, available financing varies largely based on the lender and your qualifications.
You can use a working capital line of credit for a wide variety of purposes, including paying rent, buying inventory or covering emergency expenses. These products are an ideal short-term financing option for bridging cash flow gaps, especially during seasonal changes.
✅ Revolving structure
Most working capital lines of credit are revolving which is different from a business term loan. You can draw from your credit line whenever you need access to funds and pay interest only on the money you borrow. And as long as you make your payments on time, you can continue to draw on the line, up to your limit.
✅ Can be quick to fund
Some online lenders can provide capital in as little as 24 hours, and most can within a few business days. Traditional lenders, like banks and credit unions, are typically slower to fund.
Cons
🆇 Can be expensive
Annual percentage rates (APRs) on working capital lines of credit can vary greatly — ranging from 10% to 80%. Depending on the lender, you may also face origination fees, account maintenance fees, draw fees or other additional charges. Although online lenders are fast to fund, they’re likely to charge higher rates as a result. Traditional lenders are more likely to offer the most competitive interest rates and terms.
🆇 May have frequent payments
As a type of short-term financing, working capital lines of credit might require more frequent payments than some other business loan options. Although bank and SBA lenders may offer monthly payments, many online lenders will require a weekly repayment schedule.
How to choose the right working capital line of credit
Working capital lines of credit can be issued by banks, credit unions and online lenders. In addition to offering their own lines of credit, some banks and credit unions also offer SBA programs such as the SBA Working Capital Pilot program or SBA CAPLines which can help you meet your short-term financing needs.
Here’s what you can do to find the right working capital line of credit for your business.
1. Look at the qualification requirements
Determining where you can qualify for a working capital line of credit can help you narrow down your options. Requirements vary from lender to lender, but they’ll typically consider the following criteria:
Personal credit score. In general, the stronger your credit score, the more financing options you’ll have available. Traditional lenders will usually require that you have fair to good credit — ideally a score of 650 or higher — to qualify for their products. Online lenders, on the other hand, are often more flexible. You may be able to qualify for a credit line with a personal credit score as low as 600.
Annual revenue. Minimum annual revenue requirements can range, but overall, you should be able to show your lender a history of solid financial performance. It can also be helpful to present strong cash flow and sales projections.
Time in business. Similar to your credit score, lenders prefer to see that you have an established business history. Some (but not all) banks will ask to see two or more years in business, whereas online lenders may require only six months or more.
Once you have an understanding of your business’s qualifications, you can begin to research different small-business lenders. The right lender for you will depend on a variety of factors.
For example, if speed is your top priority, an online lender will likely be able to fund your credit line the fastest. On the other hand, if you’re looking for the lowest possible interest rate you can get, you should start your search with a bank or credit union.
As you compare lenders, you should consider information including:
Credit limits. Your ideal credit limit will vary based on your specific working capital needs, and how frequently you will repay your credit line. Understanding what you’re looking for can help you narrow down lenders.
Interest rates and fees. The best interest rates and fees typically come from banks and credit unions and usually require strong personal credit and business revenue.
Repayment terms. Make sure the available repayment terms work with your business model and the income you know you have coming in.
Funding speed. Keep in mind that you may be taking multiple draws instead of just one lump sum, so the speed of funding won’t just matter up front. Considering the ease of the lender’s process can save you time and logistical headaches later on.
Application process. Online lenders typically have streamlined application processes, making them ideal if you need to access capital fast. Though they can be cheaper, banks and CDFIs can take much longer to process applications.
Customer support. With a line of credit, you may need to interact with your lender about your account more frequently than with a term loan, so look for multiple contact channels and good customer support ratings.
Lender reputation. Look at reviews on sites like Trustpilot and the Better Business Bureau to make sure your lender is reputable and trustworthy.
3. Understand the application process
Although specific requirements vary by lender, you’ll likely be asked to provide:
Personal information about you and any other business owners.
Basic business information and paperwork.
Personal and business bank statements.
Personal and business tax returns.
Business financial statements (e.g., profit and loss statement, balance sheet).
If you’re working with an online lender, you may have the option to digitally connect your financial accounts to expedite the application process. Some banks and credit unions may allow you to apply online, but others might require you to visit a branch to submit an application in person.
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices. We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.