Compare the best options for a business line of credit | finder.com

Get a business line of credit to fund ongoing expenses

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Get quick access to cash for your business and gain financial control by paying back the funds at your own pace.

When you find that your operating expenses are increasing faster than your revenue, you may need quick access to cash. In this case, you might consider a business line of credit, which offers several advantages over other forms of financing. With a business line of credit, you’re able to pay down business expenses by having access to a revolving line of credit that you can use for ongoing expenses or when business emergencies arise.

Most business line of credit lenders require you to have been in business for at least a year and meet certain revenue criteria. If you have a newly established business, check out our guide on startup loans.

Our top pick: OnDeck Small Business Loans

  • Min. Credit Score Required: 600
  • Min. Loan Amount: $5,000
  • Max. Loan Amount: $500,000
  • APR: As low as 9.99%
  • Requirements: 600+ personal credit score, 1+ years in business, $100,000+ annual revenue
  • Apply in minutes
  • Funds in as fast as 24 hours
  • Help from loan specialists

Our top pick: OnDeck Small Business Loans

A leading online business lender offering flexible financing at competitive fixed rates.

  • Min. Credit Score Required: 600
  • Min. Loan Amount: $5,000
  • Max. Loan Amount: $500,000
  • Requirements: 600+ personal credit score, 1+ years in business, $100,000+ annual revenue
Promoted

How does a line of credit for business work?

Business lines of credit are often compared to credit cards.After approval, you’re given a specified credit limit. You’re then able to access these funds up to that limit. You’ll only be responsible for paying back what you actually borrowed, plus any other fees charged by the lender. Moreover, your lender will only charge you interest on the amount borrowed, not the entire amount you’re approved for. Depending on the lender, you may also be required to put up collateral as security for your line of credit.

In the end, a business line of credit gives you control since you’re able to borrow only what you need and pay it back at your own pace. This added flexibility is what makes a business line of credit valuable and practical for business owners.
Compare business lines of credit vs. term loans

Compare top business lenders

Updated April 26th, 2019
Name Product Filter Values Min. Amount Max. Amount Requirements
$150,000
$5,000
$100,000+ in annual revenue, at least 6 months in business, 550+ personal credit score.
Get access to a flexible line of credit to finance immediate expenses.
$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.
$500
$250,000
1+ years in business, $50,000+ 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.
$500
$5,000,000
Must operate a business in the US or Canada, have a business bank account and have a personal credit score of 560+.
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
$5,000
$500,000
3+ months in business and $10,000+ monthly revenue or 6+ months in business and $2,000+ monthly revenue

Compare up to 4 providers

Features to consider when exploring business lines of credit

  • Interest rates. Make sure you understand whether your lender charges a variable or fixed interest rate. Also, keep in mind you’ll only be charged interest on the amount you actually borrow, not on the amount you’re initially approved for.
  • Fees. Usually, a business line of credit includes one-off fees such as application and establishment fees. They also may include other fees such as annual charges, ATM and transaction fees.
  • Monthly repayments. Business lines of credit can be paid in partial monthly repayments. If you can afford to pay off your balance in full, you’ll avoid unnecessary interest charges.
  • Secured vs. unsecured. Some business lines of credit may need to be secured, meaning you may be required to put up an asset as collateral.

How to compare your options for business lines of credit

Here are some questions you can ask to compare your options:

  • Can my business afford it? This should always be the main factor in your decision. Before taking out any type of debt, be sure to calculate all associated costs and make sure your business’s cash flow is able to take on new monthly repayments.
  • How much can I borrow? Different lenders offer varying minimum and maximum amounts. However, the particular amount you’re approved for depends on several factors that may include past credit history, requested credit limit, cash flow, assets and liabilities.
  • When will I receive my line of credit? Make sure the lender you choose can provide your funds when you need them. Otherwise, you’ll be wasting lots of time, resources and money.
  • How much will it cost me? Besides the interest rate, check to see what fees you’ll be charged, including one-off fees such as application, line and establishment fees. The lender may also include ongoing fees such as loan service and annual fees.
  • How much will my repayments be? Your monthly repayments aren’t fixed and will depend on how much you would like to pay down. As long as you pay interest and other fees for the month, lenders provide great flexibility on how much of the balance you want to pay back.

Things to avoid with a business line of credit

  • Borrowing more than you can afford. Especially with business lines of credit, you may easily borrow more than your business requires or can afford. Also, just because you’re approved for a certain limit, doesn’t mean you should use it all. Lastly, think twice before requesting a credit limit more than what you actually need. By doing this, you can find yourself quickly getting into too much debt and, with it, put your business in financial distress.
  • Taking too long to repay. With business lines of credit, you’re not required to pay back the amount you borrowed within a fixed period. Rather, you have the option to pay only minimum monthly charges. Whatever balance is left unpaid, interest and charges accrue. This means the longer you wait to pay back your unpaid balance, the more expensive it gets. Avoid this by paying down your unpaid balance as much as financially possible.

Frequently asked questions about business lines of credit

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site