Compare business credit cards vs. business loans

Learn the differences between a business credit card and a business loan so you can make the right choice for your company.

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Both business credit cards and business loans are popular financing options for many companies, but there are several key differences between the two. To find the better option for your business’s needs, it helps to compare the two side by side and examine how these differences apply to your company.

Our top pick: First Down Funding business loans

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Requirements: Varies by type of loan
  • No prepayment penalties
  • Competitive rates compared to other online lenders
  • Works with bad credit and most industries

Our top pick: First Down Funding business loans

Alternative financing up to $300K with highly competitive rates.

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Requirements: Varies by type of loan

The defining features of 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+, but good personal credit isn’t usually required
Starting APRCan be as low as 11.99%, some cards offer 0% APR intro periods for up to 12 monthsCan be as low as 5.85%
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 moreNo special perks
Application lengthCredit card approval is often instantIt depends on the lender and the amount you borrow, often between 1 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 you get a business loan or business credit card?

A business credit card can be a good choice if you’re looking for an all-round business tool with built-in borrowing functionality. Business credit cards can help fund ongoing purchases and expenses, as long as you’re able to repay what you use each month. Taking full advantage of the extra features and benefits, as well as using the card for quick financing needs, is an effective way to use a business credit card.

If your number one priority is getting financing for large expenses like new equipment or opening a new location, then a business loan might be better suited for you because of the higher funding amount. You can borrow only the amount you need without locking yourself into a potentially expensive account as well as tailor your repayment plan.

Be sure to consider your business’s current financing needs as well as what your business might need in the future when deciding on a business loan or credit card.

Compare business financing products

Updated March 31st, 2020
Name Product Filter Values Min. Amount Max. Amount Requirements
First Down Funding business loans
$1,000
$300,000
Varies by type of loan
Alternative financing up to $300K with highly competitive rates.
Lendio
$500
$5,000,000
Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
OnDeck
$5,000
$500,000
600+ personal credit score, 1+ years in business, $100,000+ annual revenue
A leading online business lender offering flexible financing at competitive fixed rates.
Kabbage Small Business Line of Credit
$500
$250,000
1+ years in business, $100,000+ annual revenue or $4,200+ monthly revenue over last 3 months
A simple, convenient online application could securely get the funds you need to grow your business.
SmartBiz
$30,000
$5,000,000
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.

Compare up to 4 providers

Name Product Rewards Purchase APR Annual fee
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
17.49% to 22.49% variable
$95
100,000 bonus points after you spend $15,000 on purchases in the first 3 months after account opening. That's $1,250 toward travel rewards when you redeem through Chase Ultimate Rewards®
American Express Blue Business Cash™ Card
2% cash back on all purchases on up to $50,000 per calendar year, then 1%
0% intro for the first 12 months (then 13.24% to 19.24% variable)
$0
Earn 2% cash back on all purchases on up to $50,000 per calendar year, then 1%. Rates & fees
The Business Platinum Card® from American Express
5x points on flights and prepaid hotels through Amex Travel, 1.5x points if you spend $5,000 on a single eligible purchase on up to 1 million additional points per year and 1x points on all other purchases
N/A
$595
Earn 75,000 points after spending $15,000 on purchases in the first 3 months from account opening. Rates & fees
The Blue Business® Plus Credit Card from American Express
2x points on everyday business purchases on up to $50,000 annually, then 1x points
0% intro for the first 12 months (then 13.24% to 19.24% variable)
$0
Earn 2x Membership Rewards® points on everyday business purchases on up to $50,000 with no category restrictions. Rates & fees
American Express® Business Gold Card
4x points on two categories on up to $150,000 combined annually, then 1x points after that and on all other purchases
14.24% to 22.24% variable
$295
Earn 35,000 points after spending $5,000 in the first 3 months from account opening. Rates & fees

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 utilizing 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

Want ongoing access to funds but don’t want a credit card? Learn about business lines of credit

Who is a business card best for

Get a business credit card if…Get a loan if…
  • You want a 0% intro APR period
  • 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

The Business Platinum Card® from American Express

  • Earn 75,000 Membership Rewards® points after you spend $15,000 on qualifying purchases within your first 3 months of card membership.
  • Get 5x Membership Rewards® points on flights and prepaid hotels on amextravel.com.
  • Get 50% more Membership Rewards® points. That's an extra half point per dollar, on each eligible purchase of $5,000 or more. You can get up to 1 million additional points per year.
  • 35% Airline Bonus: Use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back, up to 500,000 bonus points per calendar year when you book on amextravel.com.
  • Enroll to get up to $200 in statement credits annually by getting up to $100 semi-annually for U.S. purchases with Dell. Terms apply.
  • Terms apply
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See Rates & Fees

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