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Best business lines of credit in June 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.
Best for early payoff discount: National Funding
With fair loan terms and fast funding, National Funding is one of the most competitive lenders on the market. Best of all, they offer discounts for borrowers who are able to pay off their loans early. This is a welcome contrast to lenders that penalize early payoffs.
Pros and cons
Bankrate 2025 Award Winner Best business line of credit: Fundible
Fundible is our 2025 winner for best business line of credit due to its favorable lending terms, fast funding and loan amounts ranging anywhere from $10,000 to $500,000. That, combined with its low time-in-business and minimum revenue requirements, make it a compelling choice for any prospective borrower.
Pros and cons
Best for established businesses: Bluevine
If your business is well along in its journey, then Bluevine might be an ideal fit for you. If you have enough monthly revenue, the lender offers fair interest rates for qualified applicants, and it also offers funding in as quickly as one business day.
Pros and cons
Best for secured line of credit: American Express Business Blueprint
If you are fine with a secured line of credit, American Express Business Blueprint could be a compelling choice. American Express also offers a unique monthly fee structure that allows borrowers to save money if they can pay off their line of credit early.
Pros and cons
Best for fast funding: Fundbox
If you need a line of credit quickly, Fundbox makes a lot of sense. The company has been known to approve loans in as short a time as three minutes. Furthermore, funds can appear in your account as soon as the next business day.
Pros and cons
Bankrate 2025 Award Winner Best lender for short-term business loans: Backd
Backd is our 2025 winner for short term business loans because of its flexibility and features offered to borrowers. It also offers high credit limits to borrowers, with up to $750,000 available in funding.
Pros and cons
Bankrate 2025 Award Winner Best lender for startups: OnDeck
Due to its flexible range of short-term lines of credit, OnDeck is our 2025 award winning lender for startups. They offer loan terms as short as 12 months with funding amounts as high as $100,000. For companies just starting on their business journey, this is a winning combination.
Pros and cons
Best for low interest: Bank of America
With interest rates starting at just 9.00%, Bank of America offers highly competitive terms. And as a traditional financial institution, the company offers valuable face-to-face guidance at any of its branch locations across the country. That, plus a low time-in-business requirement of just six months, makes Bank of America a highly attractive option for many borrowers.
Pros and cons
Bankrate 2025 Award Winner Best lender for good-to-excellent credit: Wells Fargo Business
Wells Fargo offers competitive interest rates, a wide range of loan amounts and it offers both secured and unsecured lines of credit. This is part of the reason why the bank won our 2025 award for best small business lender for those with good-to-excellent credit.
Pros and cons
How Bankrate chooses our best business line of credit lenders
Bankrate's trusted small business loan industry expertise
57
years in business
30
lenders reviewed
22
loan features weighed
770
data points collected
How to get a business line of credit through Bankrate
If you’re ready to take the plunge and apply for a business line of credit, Bankrate makes it easy for you. Here’s our in-depth guide to finding the right line of credit, getting your application in order, boosting your odds of approval and comparing lenders for the best deal possible.
Determine if a line of credit is right for your business
A line of credit can be a useful lending product if you use it in the right circumstances.
A business line of credit works well if:
- You have flexible spending needs, as you can draw only as much as you need from the credit limit.
- You can manage a short and aggressive repayment period.
- You need funding on a continual basis or who aren’t sure of how much you’ll need to borrow.
- Your credit history doesn’t qualify you for a traditional loan.
- You need a smaller loan amount.
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.
As a quick reference, here are the core differences between a business loan and line of credit.
Business loan | Business line of credit |
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Lump sum payment | Continuous funds that can be withdrawn |
Predetermined loan amount | Flexible balance depending on how much has been drawn |
Lower interest rates | Higher interest rates |
Higher credit requirements | Lower credit requirements |
Longer repayment terms | Short, more aggressive repayment terms |
New loan required for additional funds | Additional funds can be drawn from existing line of credit |
Pros and cons of business lines of credit
There are different reasons to get lines of credit for businesses, especially when comparing them to loans or credit cards.
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.
- Adjustable repayments: Line of credit repayments are based on how much you borrow, allowing you to only borrow as much as you’re comfortable repaying.
- Lower credit and revenue requirements: A line of credit can be a flexible gateway into borrowing if you need to build your credit history or have lower business revenue.
- More funding available than credit cards: Business line of credit limits can go as high as $500,000, higher than what most credit card balances allow.
- Lower interest than credit cards: Line of credit APRs tend to be less than card APRs.
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.
- Higher 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.
- Fewer perks than credit cards: Lines of credit don’t often offer cash back or points like a business credit card would.
A business line of credit is an attractive financing option for companies that value flexibility, given uncertain and/or erratic liquidity needs. Unlike a traditional loan, which entails borrowing an interest-bearing sum upfront, a line of credit allows you to borrow only what you need, when you need it (up to a predetermined credit limit). This type of revolving credit facility enables financial agility, while minimizing interest expense.Thomas Brock, CFA, CPA
Calculate how much debt your business can handle
How much debt you take on can quickly determine whether your business succeeds or fails, which is why it’s a good idea to budget out your debt balance and monthly payments ahead of time.
As a rule of thumb, you should aim for no more than a 36 percent debt to revenue ratio. This means that if your business makes $100,000 annually, you should aim for no more than a $36,000 credit and interest balance for the year. On a monthly basis, this means your monthly payment should be no more than $3,000 with interest and fees.
Since your line of credit balance can change, it’s always a good idea to calculate your monthly payment ahead of time, and ensure you either have the revenue or the cash reserves to cover your line of credit payment.
Find the right lender for a business line of credit
Selecting the right lender for your business line of credit can set you up for success long-term, especially if you want to borrow from them in the future and establish a long-term relationship.
When considering a lender, you’ll want to think about the following factors:
- Line of credit rates and fees. Some lenders will offer lower interest rates or limited fees.
- Line of credit terms. How much you can borrow, whether the line of credit is revolving and your draw limit will vary depending on the lender.
- Product offerings. Lenders can have a wide variety of loan products, such as traditional loans, business credit cards or real estate loans.
- Requirements. Different lenders can have stricter or more relaxed borrowing requirements.
- Speed of approval. Some lenders will offer approval in less than 24 hours.
- Customer service. Some lenders can offer features such as personalized loan matching, 24/7 customer service or access to a mobile app.
While lenders will differ in their offerings and approaches, different types of lenders can offer different pros and cons.
Lender type | Pros | Cons |
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Online lenders |
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Small Business Administration (SBA) approved lenders |
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Community lenders |
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Bankrate can help you find the right lender by allowing you to compare rates, fees, limits and requirements all in one place. Use our loan calculator to get started and get matched with the best lender for your needs.
Make sure you meet requirements
Ensuring you can qualify for a business line of credit can help you save time and a possible hard check on your credit score when you apply.
One way you can check your odds is through preapproval or prequalification, which allows you to check if you’re qualified through a soft credit check. This allows you to quickly compare loan offers, shop around and get an idea of how much financing you qualify for.
While not all lines of credit will have the same requirements, as a rule of thumb, you’ll want to have:
- A personal credit score of 600 or better.
- At least six months in business.
- Minimum annual business revenue of $50,000.
Keep in mind that these requirements aren’t necessarily set in stone. Lenders will vary in their underwriting standards, and certain factors may give you some flexibility. If you have a high amount of business revenue, then you may be able to qualify even with a lower credit score.
Securing the line of credit with collateral may qualify you for a line of credit even if you don’t have the business revenue yet. Talk to your lender and see how you can meet the requirements, or otherwise make your application less risky.
When you apply for a line of credit, be sure to have your documentation on hand in order to help keep the approval process speedy.
Documents needed for a line of credit
Getting a small business line of credit will require you to show a solid financial outlook, though the exact documents you need will depend on the lender. At the least, you’ll need:
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- Your Employer Identification Number (EIN)
- Personal and business bank statements
- Personal tax returns
- Business plan
- Business formation documents
- 1 to 3 years of business tax returns
- Profit and loss statement
- Other debts
- Your industry
- Proof of ownership for collateral
- Collateral appraisals
- Insurance information
How to boost your line of credit chances of approval
While every lender approaches the approval process differently, there are a few things you can do to increase your odds of getting a loan.
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Check your credit report
If you have any reports or missed payments made in error, you can dispute it with the credit bureau and help increase your credit score.
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Write a detailed business plan
Highlighting your revenue projections, your knowledge of the market and your experience in the industry can show the lender how you plan on making your business successful.
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Consider a secured line of credit
If you back your line of credit with collateral, lenders will feel the loan is less risky.
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Start with a credit-builder loan
If your credit score is on the low side, or if you don’t have much history, you can take out a small, secured loan designed to help you build up a positive payment history.
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Ask your lender for feedback
Many lenders are willing to work with you to improve your chances of approval. If you get rejected, ask what you can work on for the next time.
Prequalify through Bankrate
When shopping for loans, consider prequalifying with us. Bankrate offers multiple benefits if you decide to prequalify on our site, including:
- Instant prequalification based on your credit profile
- Compare multiple lenders at once instead of one lender at a time
- No hard checks
- Get expert insights based on unbiased reviews and analyses
- Access loan information and applications in one place
- Build a profile you can access later in the process
How to compare business lines of credit
Which business line of credit that works best for your business will depend on your business model and priorities. While no two businesses are the same, there are a few key factors you should consider when selecting a line of credit.
If your most important deciding factor is… | …then you should consider |
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Cost |
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Flexibility |
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High limits |
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Customer service |
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Ease of approval |
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Mangeable repayment terms |
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You can use Bankrate’s preapproval tool to compare lines of credit one on one, and help determine which lending product works best for you and your business.
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.
As a quick reference, when looking at a secured or an unsecured line of credit:
Secured business line of credit | Unsecured business line of credit |
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Requires collateral such as property, equipment or cash | Does not require collateral |
Lender can seize any collateral you secure the line of credit with | May require a personal guarantee that puts your personal assets at risk for seizure |
Have more flexible revenue, time in business and credit requirements | Have stricter revenue, time in business and credit requirements |
Tend to have lower interest rates | Tend to have higher interest rates |
Tend to have higher credit limits, depending on value of collateral | Tend to have lower credit limits, depending on revenue and creditworthiness |
Frequently asked questions about business lines of credit
The interest rates on business lines of credit can fluctuate significantly depending on market conditions and the lender you choose. The interest rate for a business credit line typically starts around 8 percent but could go as high as 60 percent or more. This variability only reinforces the need to shop and compare lenders for the lowest interest rate on your business line of credit.