Best business lines of credit in May 2025
What to know first: A business line of credit can provide fast and flexible capital for short term expenses, including payroll, seasonal costs, inventory, emergencies and more.
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A closer look at Bankrate's top business lines of credit
The best business lines of credit offer a wide range of credit limits, lenient eligibility requirements, no draw fees and fast funding. Take a closer look at Bankrate’s best picks business lines of credit and the features they offer.
Fundible: Best for flexible lines of credit
Overview: Fundible is an online lender that offers business lines of credit up to $500,000 with up to 24-month terms. It has lenient approval requirements and may approve businesses traditionally not accepted by major banks. Unlike other lines of credit that have weekly or biweekly payments, Fundible offers monthly payments.
Bluevine: Best for established businesses
Overview: Bluevine is an online business bank that offers business checking and loan products. For its line of credit, your application can be approved in as little as five minutes. You can then use its handy online dashboard to start drawing funds that same day or even instantly if you have a Bluevine checking account. Its credit lines go up to $250,000, similar to other online lenders, and offer flexible weekly or monthly repayments across six-month or 12-month terms.
American Express Business Blueprint™️: Best for secured line of credit
Overview: American Express Business Blueprint™, formerly Kabbage, is a service from American Express offering lines of credit. It offers accessible eligibility requirements to apply, accepting businesses with fair credit and as little as $3,000 in average monthly revenue. Its line of credit can cater to businesses needing small loan amounts from $2,000 to $250,000.
But instead of interest, it charges a monthly percentage of your loan balance, a fee structure that can quickly add up to more than you’d pay with other lines of credit. This line of credit offers flexible repayment terms of six, 12, 18 or 24 months.
The total monthly fee incurred over the loan term ranges from 3.00% to 9.00% on six-month terms, 6.00% to 18.00% on 12-month terms, 9.00% to 27.00% on 18-month terms and 12.00% to 18.00% for 24-month terms. Once approved, you’ll make a monthly payment instead of the usual daily or weekly payment schedule. And you won’t get tagged with a prepayment penalty if you pay back the loan early.
* All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
Fundbox: Best for fast funding
Overview: Fundbox is an online business lender that has offered business lines of credit to over 500,000 businesses since it opened its doors. Through its unsecured line of credit, you can get funding up to $150,000, which is a lower limit than most competitors. Though Fundbox charges a weekly fee of 4.66 percent on a 12-week term or 8.99 percent for the 24-week term, you can bypass it by repaying your loan quickly without early prepayment penalties.
Backd: Best for high loan limits
Overview: Backd is a fintech lender specializing in business lines of credit, working capital loans and a unique buy now, pay later loan option. You can receive funding in as little as 24 hours and track your withdrawals through its online dashboard. It also keeps most of its loan requirements relaxed, helping startups and borrowers with fair credit access funding. And unlike many business lenders, its loans don’t require you to secure them with assets.
OnDeck: Best for short-term lines of credit
Overview: OnDeck is an online lender offering both term loans and lines of credit. For its line of credit, the credit limit is $100,000. While this is a low credit limit compared to other lenders, its eligibility requirements are more relaxed, only requiring a personal credit score of 625, one year in business and annual revenue of $100,000.
Unlike most lines of credit, OnDeck’s small business line of credit also gives you the chance to get same-day or instant funding once you’re approved. However, starting APRs are high, and the average APR for a line of credit is 57.10 percent.
Bank of America: Best for low interest
Overview: Bank of America is a national bank with nearly 4,000 branches across the U.S., so you can get the personalized experience you may be needing. It offers both secured and unsecured lines of credit that you can renew each year. It also offers a cash-secured credit line with lower qualification requirements, such as accepting businesses with just six months in business and $50,000 in annual revenue, with $1,000 as the minimum deposit.
Wells Fargo: Best for unsecured lines of credit
Overview: Wells Fargo is a well-established bank with about 5,600 branches across the U.S. where you can get face-to-face customer service. It has three business lines of credit products, including two unsecured lines, one of which is an SBA-backed line. Most lenders offer just one business line of credit option, and it’s rare to find a lender offering SBA-backed lines. Its unsecured lines of credit offer credit limits of $10,000 to $150,000, and the SBA-backed line offers limits from $5,000 to $50,000.
What is a business line of credit?
A business line of credit (LOC) is a flexible loan for businesses that works like a credit card. Companies draw money from their credit lines as needed, only paying interest on the portion of money borrowed. This allows businesses to draw exactly as much as they need and only pay interest on their balance, instead of having to estimate costs ahead of time and possibly ending up short with a traditional loan.
Business lines of credit can be revolving or non-revolving. For revolving lines of credit, as the borrower repays the amount borrowed, the lender replenishes the funds available so that they can withdraw from the credit line again. These funds can typically be accessed using a business checking account or mobile app.
With non-revolving business lines of credit, the line of credit is set ahead of time, and once the loan is paid off, the capital cannot be accessed again, making it a bit less flexible than a revolving line of credit.
How does a business line of credit work?
Business lines of credit are similar to business credit cards. Both allow small businesses to access funds when needs arise instead of the lump sum a business loan would provide.
When you take out a business line of credit, you can withdraw funds up to the credit limit during the draw period. You repay withdrawals from the line of credit over a short term, only paying interest on the amount borrowed. Interest rates on business lines of credit are typically lower than those of a business credit card.
Lenders set credit limits and interest rates based on factors like how long the business has been running, the owner’s credit score and what the company’s annual revenue is. An LOC typically requires renewal annually and may require an annual fee on top of the usual origination fees and interest.
The repayment process varies from lender to lender. With some LOCs, you can make interest-only payments during your draw period. Then, you make repayments during the repayment period of six months to five years after the draw period ends. Other lenders treat each draw like an individual term loan — you have a set period to repay each draw you make, which could be weeks or months long.
Secured vs. unsecured business lines of credit
The difference between a secured business line of credit and an unsecured line of credit is whether you back the loan with cash or collateral. A secured business line of credit requires that you back your loan with some sort of collateral, such as business equipment, real estate or personal property such as your house. Secured lines of credit will often require this in the form of a personal guarantee.
If you default on your line of credit balance, the lender will be able to seize the collateral and liquidate it in order to pay back the loan.
Many lenders offer cash secured business lines of credit, where you put down a cash deposit in order to secure a line of credit. If the balance is paid off, you’ll receive the deposit back.
If you have a lower credit score, are a new business or don’t meet the revenue requirements for a traditional loan or line of credit, secured business lines of credit can offer you a way to get flexible funding and improve your credit score as you pay down the balance.
Business line of credit vs. business loan
The key difference between a business loan and a business line of credit is flexibility in funding. While a business loan offers financing in a predetermined lump sum, a business line of credit allows you to withdraw as much or as little funds you need within the credit limits over the draw period.
With a business loan, you receive a certain amount of money agreed upon by you and the lender in a lump sum, which you have to immediately make payments on and that will immediately accumulate interest whether or not you end up using all the capital. Business loans generally require a higher minimum credit score, time in business and revenue amount, while offering loan amounts ranging from $5,000 to millions of dollars, depending on the lender.
A business line of credit, on the other hand, allows you to withdraw only as much as you need within the draw period and credit limit. If you take out a line of credit up to $10,000, for example, and draw only $2,000, you only need to pay the balance and interest on the $2,000. This makes a line of credit better for businesses with flexible funding needs in smaller amounts. Lenders generally also allow you to make interest-only payments during the draw period, giving you more flexibility with the payments.
Should I get a business loan or a business line of credit?
Which type of funding you get will depend on your business’ individual needs. While there is no right answer, there are some criteria to consider when choosing between a business loan and a business line of credit.
You might want to get a business loan if:
- You know exactly how much funding you’ll need
- You want a consistent repayment amount and schedule
- You need funding over $500,000
You might want to get a business line of credit if:
- You’re not sure how much funding you need
- You need funding in smaller amounts
- You plan on using the credit for future funding
- Want to build your credit score
- You don’t qualify for a traditional loan
Keep in mind that you can have both a business loan and a line of credit at the same time, so long as you meet the qualifications for approval and you don’t rack up too high of a debt-to-income ratio.
How to get a business line of credit
- Calculate how much you need to borrow.
Consider how much funding you need to cover the business expenses you have. But you also need to ensure that you can handle the business loan payments. Use Bankrate’s business loan calculator to figure how much you can afford to pay monthly before you sign any loan agreements. - Request business and personal credit reports.
You’ll want to request your credit reports so that you can apply with lenders that will accept your credit. You may also want to look over your credit report to see what lenders will look at and to see if you can improve your credit. For example, you may spot an error on your report that you can request a correction to boost your score, or you might pay off other debts. - Start prequalifying. The benefit of prequalifying is that it will show you what rates are available based on your situation. During this step, companies will often run a soft credit check that will not hurt your credit score. While not all lenders offer prequalification, such as traditional banks, many online lenders do offer this benefit. You can prequalify for multiple lenders if available to help you compare loan offers.
- Compare lenders to find the best business line of credit.
To find the best loan offer for your business, you’ll want to compare several different lenders. Look at their loan interest rates, terms and repayment schedules such as weekly or monthly payments. You’ll also want to look at lenders’ eligibility requirements to make sure that your business meets these requirements before you apply. - Apply for the loan.
Work with the lender to fill out an application and provide all required documents quickly. You may need business bank statements, tax returns, business formation and personal identification documents. The lender will then review your financial statements and notify you of their loan decision.
Pros and cons of business lines of credit
Pros:
- Flexible funding: You only have to pay interest on as much as you borrow, allowing you to draw exactly as much as you need instead of trying to guess your expenses ahead of time.
- Improve cash flow: With access to cash, as needed, you can quickly close gaps in cash flow.
- Accessible: Online lenders often have more lenient requirements and disburse funds quickly.
- Establishes a relationship with a lender: A line of credit helps you start a relationship with a lender and build credit, which can potentially make it easier to secure additional financing in the future.
Cons:
- Fees: You may pay a monthly maintenance fee as well as annual renewal fees and draw fees each time you withdraw funds. These fees can add up, leading to a high overall cost for borrowing.
- High interest rates: Business lines of credit tend to have higher interest rates than term loans. Interest rates may also be variable, which means that the rate may rise over time based on market fluctuations.
- Short repayment terms: You may have a short repayment term, such as 12 or 18 months. Its short repayment term may have a higher payment and a more aggressive repayment schedule, such as daily or weekly payments, than long-term loans.
- Lower loan limits: The credit on a line of credit tends to be much lower than what you can get with a traditional loan, making it a less viable option for big business expenses.
Alternatives to business lines of credit
Bankrate insight
If you’re experiencing a long-term cash shortage, you may want to look into zero-debt financing, a type of financing that doesn’t use debt to fund your business. You can also try cutting expenses or increasing business revenue rather than getting a business loan.
It's better to use a business line of credit when you want to manage cash flow fluctuations for your business or prepare for larger investments. On the other hand, credit cards are best for smaller, short-term expenses.Emmanuel Nyame, CEO of Twelvenets
Where to get a business line of credit
You can find lines of credit with both traditional and online lenders.
Traditional banks or credit unions: At these lenders, you can talk to an employee face to face and get all your questions answered. But these lenders have more strict requirements like a long time in business, higher annual revenue or credit score. These may offer more traditional secured loan types, which can lead to potentially lower rates.
Online banks/financial services companies: Online lenders operate entirely digitally and allow you to manage your loan through apps or online portals. They can offer more convenience and have more relaxed eligibility requirements. They just don’t offer the face-to-face experience some people prefer.
To choose the lender that’s right for you, ask how your business measures up against its requirements. For instance, if you’re a newer business, have lower credit or have smaller annual revenue, online lenders may be best for your situation. It’s also important to assess if you value an office right up the road or an online-only experience. Bankrate can help you find lenders and evaluate them based on what your business needs.
Frequently asked questions about business lines of credit
How we chose our best business line of credit lenders
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