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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

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.

National Funding business loans
Finder Rating: 4.75 / 5: ★★★★★

National Funding business loans
$5,000 – $500,000
4% to 8%
Be in business at least one year and make at least $150,000 in annual sales. Other loan types have additional requirements.
Working capital loans and equipment financing, some high-risk industries may be eligible.

Fundbox lines of credit
Finder Rating: 4.2 / 5: ★★★★★

Fundbox lines of credit
$1,000 – $150,000
Not stated
6 + months in business, $100,000+ in annual revenue, 600+ credit score
Get flat rate, short-term financing based on the financial health of your business, not your credit score.

Bitty Advance business cash advances
Finder Rating: 2.8 / 5: ★★★★★

Bitty Advance business cash advances
$2,000 – $25,000
Not applicable
$5,000 monthly bank revenue, 6+ months in business, business bank account open 3+ months, 450+ credit score
With APRs in the triple digits, this is best saved as a last resort.
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Compare up to 4 providers

Name Product Rewards Purchase APR Annual fee
Ink Business Unlimited℠ Credit Card
1.5% cash back on all 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 on purchases in the first 3 months after account opening.
Ink Business Preferred® Credit Card
3x points on the first $150,000 on travel and select business categories annually, then 1x after and on all other purchases
15.99% to 20.99% variable
$95
100,000 bonus points after you spend $15,000 on purchases in the first 3 months after account opening. That's $1,000 cash back or $1,250 toward travel when redeemed through Chase Ultimate Rewards®.
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
$0
Sam's Club® Business Mastercard®
Up to 5% at Sam's Club with Plus membership, 5% cash back on gas (on up to $6,000 annually, then 1%), 3% on dining and 1% on all other purchases
14.9% to 22.9% variable
$0
Earn up to 5% at Sam's Club with Plus membership, 5% cash back on gas (on up to $6,000 annually, then 1%), 3% on dining and 1% on all other purchases. No personal guarantee required.
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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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