Disclaimer: Information in the business line of credit articles is provided for general information only, does not constitute financial advice, and does not necessarily describe Biz2Credit commercial financing products. In fact, information in the business line of credit articles often covers financial products that Biz2Credit does not currently offer.

There comes a time for most small businesses when they need to spend money they don’t immediately have. Whether it’s to cover emergency expenses, keep the doors open during a seasonal slowdown, take advantage of a business opportunity or something else, small business financing can be a significant lifeline.

However, you don’t need to go through an arduous application process with a lender or take on major debt to get access to capital. It’s easy to apply for a business line of credit for small business and you can often get funding in a few business days.

There are many business line of credit companies out there, so to guide your research, we’ve outlined some of the best here.

In this article:

• Learn what a business line of credit is, how it works, and how to apply for a business line of credit.
• Understand how you can use a business line of credit to support your business.
• Explore the best credit lines for small business from the leading business line of credit companies.

What is a Business Line of Credit?

Business line of credit is a cross between a term loan and a business credit card. Once approved, you’ll have access to a maximum business credit line loan from which you can deposit money into your business bank account. Rather than pay interest on the full credit amount, you only pay on what you use.

Interest rates tend to be higher on lines of credit than other financing types like short-term working capital loans or term loans, but the tradeoff is flexibility. With a revolving line of credit, you’ll have access to the full amount as long as you pay back what you’ve used. It’s almost like having an emergency fund that you can tap into when you need it, and then repay it with future revenue.

Unsecured business lines of credit are common, meaning you don’t have to put up any collateral, like business assets, or a personal guarantee to protect the lender. This removes an extra layer of risk for small business owners. Like other financing options, most business line of credit companies still subject borrowers to credit approval, and better credit scores will earn lower interest rates.

How Can You Use a Business Line of Credit?

A business line of credit is a cash equivalent, so you can use it for just about any business purchase. Some of the most common uses of a business line of credit for small businesses include:

• Increasing cash flow or working capital to pay overhead and operational expenses, in lieu of taking a lump sum loan or cash advance.
• Hiring contractors or seasonal employees.
• Paying emergency or unforeseen business expenses, like equipment maintenance or price increases on raw materials.
• Taking advantage of business opportunities by buying wholesale, capitalizing on a trend, and more.
• Investing in technology or equipment.
• Growing or expanding your business by opening a new location.

A business line of credit is very flexible and the best credit lines for small business have competitive rates that won’t overburden your business. (Not to mention, you won’t have to make fixed monthly payments to satisfy a small business loan repayment schedule.)

Top Business Lines of Credit Companies

Fundbox

Fundbox is a flexible, easy-to-access business line of credit that offers decisions on applications in as little as three minutes. The qualification requirements are relatively low, including a time requirement of just three months in business. That makes it more accessible for startups and new businesses with limited credit history.

You can access a line of credit worth up to $150,000 with terms of 12 or 24 weeks.

Eligibility:

• Minimum credit score: 600
• Time in business: Three months
• Minimum annual revenue: $100,000

Turnaround time:

• 1 business day

OnDeck

With same-day funding and long repayment terms, OnDeck is a great solution for businesses that need very fast access to cash. Although the qualification requirements are a bit higher, with a 625 personal credit score and one year in business, you can get up to $100,000 the same day you apply. With repayment terms of 12-, 18-, or 24-months, you’ll have a good runway to pay back any credit you use.

Eligibility:

• Minimum credit score: 625
• Time in business: 1 year
• Minimum annual revenue: $100,000

Turnaround time:

• Same day possible

American Express Business Line of Credit

You probably know American Express as a credit card company, but it also offers one of the best credit lines for small business. AmEx offers up to $250,000 of revolving funds, more than many online banking providers, and the loan application and approval process takes just minutes. (If you have an American Express Business Checking account, you can receive initial draws almost immediately.)

That said, AmEx does a few things that are unusual in business credit line loans. First, they require a personal guarantee, making theirs a secured business line of credit. Second, each draw counts as an individual installment loan, so you must pay monthly fees based on the repayment term rather than just pay back the amount you’ve drawn by the end of the period. That gives it a bit more in common with a credit card, which may carry an annual fee.

Eligibility:

• Minimum credit score: 660
• Time in business: 1 year
• Minimum annual revenue: $36,000

Turnaround time:

• Same day possible

National Funding

National Funding offers some of the highest business line of credit limits among alternative lenders, with a $500,000 line of credit available with 4- or 18-month repayment terms. Unlike other business line of credit companies, National Funding charges factor rates rather than interest rates.

With a factor rate, you’ll a percentage of the amount you draw will be added to your overall repayment amount. To calculate the amount, you multiply the credit draw by a factor, usually between 1.1 and 1.5. So, if you took out $10,000 with a 1.1 factor rate, you’d have to pay back 10,000 x 1.1, or $11,000.

Factoring can lead to higher repayment amounts, but National Funding does offer early payoff discounts.

Eligibility:

• Minimum credit score: 660
• Time in business: 6 months
• Minimum annual revenue: $250,000

Turnaround time:

• 1 business day

Fundible

One of the largest business line of credit companies that specializes in alternative lending, Fundible offers business credit line loans up to $5 million, with extended loan terms reaching as long as 120 months.

Fundible has one of the lowest minimum credit score requirements, at just 450, making it a good option for small business owners with bad credit. Likewise, it offers fast funding in as little as one business day and has no prepayment penalties.

However, unlike other companies, it may charge borrowers an origination fee.

Eligibility:

• Minimum credit score: 500
• Time in business: 6 months
• Minimum annual revenue: $96,000

Turnaround time:

• 1 business day

Kapitus

Kapitus has some of the most significant qualifying requirements of companies on this list, with a mandatory two years in business and a minimum personal credit score of 650. That makes it unavailable to startups or new business owners.

However, it offers lines of credit up to $750,000 and offers next-day funding, making it a good option for established businesses that need fast access to larger loan amounts.

Eligibility:

• Minimum credit score: 650
• Time in business: 2 years
• Minimum annual revenue: $180,000

Turnaround time:

• 1 business day

FAQs

What is a business line of credit?

A business line of credit is part business loan, part business credit card. When you get approved, you’ll have access to a maximum business credit line loan. Unlike a loan, you only pay interest on the amount of capital you draw on the credit line. Like a credit card, as long as you pay back the credit you use, you’ll have full access to the full credit amount.

How can you use a business line of credit?

A line of credit is a cash equivalent, meaning you can spend the money like cash. That can be used to pay for labor, equipment, real estate, and many more business needs.

What are the best business line of credit companies?

Some of the best business line of credit companies include Fundbox, OnDeck, American Express, and Fundible. Some other good options that aren’t on this list include Bluevine, Wells Fargo, and Bank of America.

What are business line of credit interest rates?

Business line of credit interest rates can range widely based on your personal and business credit scores, your business’s profitability, and the repayment term of your line of credit. Interest rates typically range from around 8% to over 60%. Typically, if a business has poor creditworthiness, it will pay higher interest rates.

How to apply for a business line of credit?

Every company has a different application process, but almost every one allows you to apply online on their website.

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