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Compare business credit cards vs. business loans

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

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Editor's choice: First Down Funding business loans

First Down Funding business loans logo
  • No prepayment penalties
  • Loans up to $300,000
  • Bad credit OK
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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

Business credit cardBusiness term loan
Funding amountA specified limit, as high as $250,000, with flexible, ongoing access to fundsBusiness financing up to $5 million provided in one lump sum
RepaymentLow minimum monthly repaymentsA set repayment schedule with monthly payments and a payoff date
EligibilityLess requirements than a business loan, but typically requires good personal creditGenerally, you must be in business for at least a year and have annual revenue of $100,000 or more, good personal credit
Starting APRCan be as low as 11.99%, some cards offer 0% APR promotional periods for up to 12 monthsCan be as low as 6%
FeesAnnual fees, late repayment fees and more may applyApplication fees, origination fees, late repayment fees and more may apply
Other featuresTravel insurance, employee spending controls and monitoring, integration with accounting softwareAbility to sync to your online accounting software
RewardsYou can earn cash back on office supply purchases, shipping, advertising, gas and more, or you can earn travel milesNo rewards
PerksYou can get access to airport lounges, free checked bags, priority boarding, companion certificate and moreMay help you qualify for larger loan amounts with the same lender in the future
Application timingCredit card approval is often instantIt depends on the lender and the amount you borrow, often between one and 90 days
AdvantagesFlexible funding, continuously available money and bonus featuresMany different loan options, can be closely tailored to your borrowing needs
DisadvantagesLower funding amount, higher APRLess 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

Data indicated here is updated regularly
Name Product Filter Values Loan amount APR Requirements
First Down Funding business loans
$4,000 – $300,000
5.49% to 22.79%
At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 300
Alternative financing up to $300K with highly competitive rates.
Lendio business loan marketplace
$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 75 legit business lenders.
Fundera
$2,500 – $5,000,000
7% to 30%
$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years
Get connected with short-term funding, SBA loans, lines of credit and more.
Kickpay e-commerce loans
$20,000 – $1,000,000
Not applicable
At least $250,000 in the past 12 months of revenue, e-commerce business, use a 3rd party fulfillment center for storing and shipping inventory, at least one US location.
Get a loan for your e-commerce business based on your sales history.
Credibly Business Loans
$5,000 – $250,000
6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits
Funding to cover business expenses with daily or weekly repayments.
SmartBiz
$30,000 – $5,000,000
4.75% to 7.00%
650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years
Get funding for your small business with a government-backed loan and extended repayment terms.
LendingClub small business loans
$5,000 – $500,000
9.77% to 35.98%
12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
Monevo Business Loans
$500 – $100,000
3.99% to 35.99%
Credit score of 500+, legal US resident and ages 18+.
Use this connection service to get paired with a loan you can use for business.
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Compare up to 4 providers

Name Product Rewards Purchase APR Annual fee
Brex for Startups
7x points on rideshares, 4x on Brex Travel, 3x at restaurants, 2x on software subscriptions and 1x points on all other purchases
N/A
$0
The first corporate card for startups. No personal liability or security deposit needed, meaning your personal credit score won't be affected.
Brex for Ecommerce
N/A
N/A
$0
60-day interest-free financing for e-commerce businesses.
Universal Premium Mastercard®
3 cents off per gallon when you buy 30,000 or more gallons in a month plus 3 cents off at the Retail Savings Network
27.24% variable
Up to $120
Earn 3 cents off per gallon when you buy 30,000 or more gallons in a month plus 3 cents off at the Retail Savings Network.
BP Business Solutions Mastercard®
Up to 6 cents per gallon on fuel and 3.5 cents per gallon on diesel depending on number of gallons purchased per month
27.24% variable
Up to $120
Up to 6 cents per gallon on fuel and 3.5 cents per gallon on diesel depending on number of gallons purchased per month.
ARCO Business Solutions Fuel Card
18.24% to 27.24% variable
Up to $180
The ARCO Business Solutions Fuel Card gives your drivers access to greater performance with high quality fuels at ARCO locations. The card provides fleet managers with detailed reporting and individual spending controls for each and every driver.
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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?

Compare business credit card if …Compare loans if …
  • 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

Our pick for a business card

Brex for Startups

  • The first corporate card for startups
  • No personal liability or security deposit needed - your personal credit score won't be affected
  • Minimum of $100,000 of funds in corporate bank account and US EIN required
  • Earn 7x points on rideshares, 4x points on travel booked through Brex Travel, 3x points at restaurants, 2x points on software subscriptions and 1x points on all other purchases
  • Get a credit limit 10 to 20 times higher than traditional business cards
  • No foreign transaction fees
  • Build business credit - Brex partners with Experian to report your on-time payments
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