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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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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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.
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:
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 |
|---|---|
| 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 |
There are different reasons to get lines of credit for businesses, especially when comparing them to loans or credit cards.
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
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.
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:
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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| Banks |
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| Credit unions |
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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.
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:
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.
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:
While every lender approaches the approval process differently, there are a few things you can do to increase your odds of getting a loan.
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.
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.
If you back your line of credit with collateral, lenders will feel the loan is less risky.
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.
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.
When shopping for loans, consider prequalifying with us. Bankrate offers multiple benefits if you decide to prequalify on our site, including:
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 |
|---|---|
| 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.
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 |
|---|---|
| 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 |
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.
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