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Compare business credit cards vs. business loans

Do you need funding for regular expenses, a one-time project — or both?

A business credit card and business loan generally serve two different purposes. One is designed to help you cover small costs as they come up, like ordering new coffee filters for the office. The other is meant to cover a large one-time expense. But both can be viable options in more unique situations, like when you can repay your debt in a year.

At a glance: Business loans vs. credit cards

Funding amount

A specified limit, as high as $250,000, with flexible, ongoing access to funds

Business financing up to $5 million provided in one lump sum

Repayment

Low minimum monthly repayments

A set repayment schedule with monthly payments and a payoff date

Eligibility

Less requirements than a business loan, but typically requires good personal credit

Generally, you must be in business for at least a year and have annual revenue of $100,000 or more, good personal credit

Starting APR

Can be as low as 11.99%, some cards offer 0% APR promotional periods for up to 12 months

Can be as low as 6%

Fees

Annual fees, late repayment fees and more may apply

Application fees, origination fees, late repayment fees and more may apply

Other features

Travel insurance, employee spending controls and monitoring, integration with accounting software

Ability to sync to your online accounting software

Rewards

You can earn cash back on office supply purchases, shipping, advertising, gas and more, or you can earn travel miles

No rewards

Perks

You can get access to airport lounges, free checked bags, priority boarding, companion certificate and more

May help you qualify for larger loan amounts with the same lender in the future

Application timing

Credit card approval is often instant

It depends on the lender and the amount you borrow, often between one and 90 days

Advantages

Flexible funding, continuously available money and bonus features

Many different loan options, can be closely tailored to your borrowing needs

Disadvantages

Lower funding amount, higher APR

Less additional perks, stricter requirements

Should I get a business loan or credit card?

It depends on what you need to finance. Business loans are designed to cover a large one-time expense, while credit cards are designed to cover smaller expenses that are hard to predict, over a long period of time.

It also depends on your cash flow. If you have the cash flow to pay off your credit card balance each month, you won’t have to pay any interest. Some credit cards come with a 0% APR promotional period, which can last as long as 12 months. If you can pay off the balance before the period is up, you also won’t have to pay interest.

Want something in between? Consider a line of credit

A line of credit falls somewhere in between a loan and a credit card. It gives your business access to funds that you can withdraw from as needed, like a credit card. But your withdrawals are in cash, which you can use to cover ongoing expenses that credit cards can’t — like utilities or rent.

They also tend to have higher credit limits than credit cards, making them suitable for a large project with costs that are difficult to predict. Some business lines of credit come with minimum monthly payments, while others turn each draw into a short-term loan.

Compare lines of credit for your business

Compare business financing products

Name Product Filter Values Loan amount APR Requirements

Biz2Credit business loans
Finder Rating: 3.75 / 5: ★★★★★

Biz2Credit business loans
$25,000 – $250,000
Starting from 8.99%
6+ months in business; $150,000+ monthly revenue; 500+ credit score
Get only the capital you need through secure, prescreened lenders with this highly rated company offering SBA, expansion, working capital and other loans.

OnDeck short-term loans
Finder Rating: 4.6 / 5: ★★★★★

OnDeck short-term loans
$5,000 – $250,000
As low as 35%
600+ personal credit score, 1 year in business, $100,000+ annual revenue, active business checking account
A leading online business lender offering flexible financing at competitive fixed rates.

Fora Financial business loans
Finder Rating: 4.1 / 5: ★★★★★

Fora Financial business loans
$5,000 – $500,000
Varies
6+ months in business, $12,000+ monthly revenue, no open bankruptcies
Get qualified for funding in minutes for up to $500,000 without affecting your credit score. Best for companies with at least six figures in annual revenue.

Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★

Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.

ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★

ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
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Compare up to 4 providers

Name Product Rewards Purchase APR Annual fee
Premium Capital on Tap Business Credit Card
2% cashback on all purchases
9.99% to 34.99% variable
$0
Earn 2% cashback on all purchases. One of the highest unlimited cashback rates you'll find on a business card.
Ramp Visa® Commercial Card
1.5% cashback on all purchases
N/A
$0
Replace expense reports with unlimited virtual and physical cards. Automate your accounting, lower your bills, and earn 1.5% cash back on everything.
Brex 30 Card
8x points on rideshares, 5x on Brex Travel, 4x at restaurants, 3x on software subscriptions and 1x points on all other purchases
N/A
$0
The first corporate card for startups. No personal guarantee or security deposit needed, meaning your personal credit score won't be affected.
Divvy Business Credit Card
Monthly: 2x on restaurants, 2x on hotels, 1.5x on recurring software subscriptions, 1x on everything else
Semi-monthly: 4x on restaurants, 3x on hotels, 1.75x on recurring software subscriptions, 1x on everything else
Weekly: 7x on restaurants, 5x on hotels, 2x on recurring software subscriptions, 1.5x on everything else
Pay balance in full according to your payment schedule
$0
Earns more points per eligible category based on how often you pay your credit card balance.
Ink Business Cash® Credit Card
5% at office supply stores, on Internet, cable and phone up to $25,000 combined annually (then 1%), 2% on gas and dining up to $25,000 combined annually then 1% after that and on all other purchases
0% intro for the first 12 months (then 13.24% to 19.24% variable)
$0
$750 bonus cash back after you spend $7,500 in the first 3 months.
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Compare up to 4 providers

Is a business credit card worth it?

Business credit cards offer a number of advantages in comparison to typical business loans, mostly in the form of extra features. How extensively you plan on using these features often answers the question of if a business credit card is worth it for you.

Pros

  • Track your business spending
  • Access various account management and financial analysis tools
  • Manage employee credit cards through one account
  • Earn a signup bonus and rewards on your purchases
  • You may get a 0% intro APR period on purchases, balance transfers or both
  • Build the company credit score

Cons

  • Potentially high APR
  • Some business credit cards charge an annual fee
  • Credit limit may not be enough for your needs
  • Most small business credit cards require a personal guarantee
  • Some card providers will report your business card activity to personal credit

Which is right for my business?

  • You can pay off your balance over a year
  • You want to earn rewards on purchases
  • You want to track employee spending
  • You need revolving credit limit
  • You want a credit limit with lower approval requirements
  • You have poor credit score or no credit history
  • You want an ongoing low APR
  • You don’t want to pay an annual fee
  • You want loan flexibility
  • You need a high credit limit
  • You have excellent credit score
  • You have established a business credit
Brex 30 Card
Our pick for a business credit card
Brex 30 Card

View details

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