Headway Capital: A Highly Accessible (But Low-Limit) Line of Credit
Headway Capital’s line of credit is attainable for newer businesses and fair-credit borrowers. You can receive funds quickly, but the line maxes out at $100,000.
Overview
The bottom line:
Headway Capital’s fast line of credit can be a good option for startups and borrowers with fair credit.
Loan details
Min. Loan Amount
$5,000
Min. Term Length
12 months
Min. APR
35%
Max Loan Amount
$100,000
Max Term Length
24 months
Max APR
80%
Qualifications
Min. credit score
625
Min. Time in Business
6 months
Min. Annual Revenue
$50,000
Pros & Cons
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 is an online lender that issues business lines of credit
NerdWallet has a lot of positives to highlight about Headway, hence its high star rating. But note that the line amount is small compared with others in the market, and you may have to pay a fee each time you draw from your line.
Consider Headway Capital’s business line of credit if you:
- Need fast cash. You can complete Headway’s simple and straightforward application and find out if you qualify for a credit line in minutes. After approval, you can receive funds as soon as the next business day.
- Recently started your business. Headway only requires 6 months in business and $50,000 (that’s a little over $4,000 per month) to qualify. And you won’t need to secure your financing with physical collateral, making this credit line well suited for startups that have limited assets.
- Have only fair credit. Headway considers several factors when underwriting your loan application, not just your credit score. You’ll only need a minimum personal credit score of 625 to qualify.
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.
How NerdWallet rates Headway Capital
This is one of the top-rated line-of-credit products among our list of partners. Here’s a breakdown of why we’ve given Headway 4.7 out of 5 stars:
Headway Capital business line of credit details
| Loan amount | $5,000 to $100,000. |
| Estimated APR range | 35% to 80%. |
| Fees | 2% draw fee applicable in most states. A draw fee is charged each time you take funds from your credit line. |
| Terms | 12, 18 or 24 months. |
| Repayment schedule | Weekly or monthly. |
| Funding speed | Within one to two business days of approval. |
You will need a business bank account to apply for a line of credit from Headway Capital. If you’ve been operating for less than one year, you may need to provide six months of business bank statements.
Headway Capital does not provide financing to businesses in the following states: Arkansas, Connecticut, Michigan, Montana, Nevada, North Dakota, Rhode Island, South Dakota and Vermont.
Where Headway Capital stands out
Fast access to funds
With Headway Capital’s line of credit, you get fast access to working capital. You can submit an initial application in minutes by providing basic information about yourself and your business. Once you’re approved, you can typically receive your funds in one to two business days.
Easy to qualify
Compared with more traditional business loan options
The lender also doesn’t require you to secure your credit line with physical collateral, which may be appealing to businesses with limited assets.
Limited fees
Although businesses in certain states will be subject to a 2% draw fee, Headway Capital doesn’t charge any other fees. The lender does not charge a monthly or annual maintenance fee, an origination fee or an inactivity fee, for example.
You can also repay your outstanding balance at any time without incurring a prepayment penalty.
Where Headway Capital falls short
Low borrowing maximum
If you’re looking for a large credit limit, you may want to consider alternative options, as Headway only offers lines of credit up to $100,000. Competitors like American Express Bluevine
Can’t build business credit
Headway Capital does not report your payment history to the commercial credit bureaus. This means you can’t build business credit with Headway’s line of credit. (But you can with a line of credit from OnDeck
Alternatives to Headway Capital
Fundbox
Fundbox
Fundbox - Line of credit
NerdWallet Rating
Min Credit
600
If you have a slightly lower credit score or want to avoid a draw fee, consider Fundbox
To qualify for a Fundbox line of credit, you’ll need a minimum credit score of 600, at least 3 months in business and a minimum annual revenue of only $30,000.
SBA microloans
U.S. Small Business Administration
SBA microloan
Min Credit
620
SBA microloans are available in amounts up to $50,000 with repayment terms as long as seven years. Interest rates typically range from 8% to 13%, significantly lower than Headway Capital’s rates. Although these are term loans and not lines of credit, they can provide funding for a variety of working capital needs.
Unlike other types of SBA loans microlender
Frequently asked questions
Frequently asked questions
In most cases, no, Headway Capital does not do a hard credit pull
Yes, Headway Capital is a direct business lender. Headway is part of the larger financial services organization Enova International, which also owns online lending companies OnDeck and The Business Backer.
Headway lines of credit may have a 2% draw fee, depending on your state. Business owners in Colorado and Georgia, for example, will not have a draw fee.