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Compare Business Lines of Credit Providers
Editor's Choice
Fundera
- Loan Amount: $5K-$5M
- Time in Business: 12+ months
- Monthly Revenue: $10000
- Min Credit Score: 600
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Key facts
Qualifications
- Credit Score: 600+
- Age of business: 12+ months
- Monthly revenue: Varies
- US citizenship: Required for all owners
- Term length: Varies
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Pros:
- No fee to use Fundera’s services
- Access to 30+ reputable lenders with one application
- Fundera does not receive incentives to work with specific lenders
- Wide variety of lending products
- Work directly with a lending specialist to evaluate options
Cons:
- High rates/fees
- Most fees in first few months, no incentive to repay loan early
Rapid Finance
- Loan Amount: $10K-$1M
- Time in Business: 2 years
- Monthly Revenue: $18000
- Min Credit Score: 550
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Key facts
Qualifications
- Credit score: 550
- Age of business: 18+ months
- US citizenship: Required for all owners
- Repayment terms: Varies
- Term length: 3-60 months
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Pros:
- All types of financing offer next-day access to funds upon approval
- A wide array of funding options
- Access to a one-on-one consultation with a Rapid Finance lending expert
Cons:
- No interest rate information available on the website
- Must go through pre-qualification process
Biz2Credit
- Loan Amount: $25K-$6M
- Time in Business: 6-18 months
- Monthly Revenue: $21000
- Min Credit Score: 575
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Key facts
Qualifications
- Credit score: 575+
- Min. time in business: 6/12 months
- Min. monthly revenue: $21,000
- US citizenship: required for most loans, but a green card is accepted for SBA loans
- Loan term: 12-36 months
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Pros:
- Directing funding available within 24 to 72 hours
- Transparent terms and no registration or application fees
- Easy approval process with great guidance throughout the entire financing process
- Multiple forms of financing available, including small business loans, business lines of credit, and business acquisition loans
Cons:
- Certain fees are in place.
- The website does not provide a lot of information.
Lendio
- Loan Amount: $1K-$5M
- Time in Business: 12+ months
- Monthly Revenue: $12000
- Min Credit Score: 580
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Key facts
Qualifications
The following qualifications vary depending on the lender:
- Credit score, age of business, annual revenue, repayment terms, term length.
- Collateral is required for some lenders.
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Pros
- Flexible on credit score. Getting approved is based more on strong balances and revenue.
- Variety of loan types available
- Soft credit check for the initial application
- Save time with offers from multiple lenders
Cons
- Application process is a bit long for a marketplace because it requires 3 bank statements
- Since Lendio is not a direct lender, the terms only become clear after applying for a loan
Fora Financial
- Loan Amount: $5K-$1.4M
- Time in Business: 6+ months
- Monthly Revenue: $15000
- Min Credit Score: 600
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Key facts
Qualifications
- Age of business: 6+ months
- Monthly revenue: $14,000
- US citizenship: Required for all owners
- Repayment terms: Up to 15 months for small business loan
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Pros:
- High rating from customers on TrustPilot
- Funding in as little as 72 hours
- Early payoff discounts
Cons:
- No information on site about factor fees or interest rates
- Only offers merchant cash advance or small business loan
- Longest loan term is 15 months
OnDeck
- Loan Amount: $5K-$250K
- Time in Business: 12+ months
- Monthly Revenue: $8000
- Min Credit Score: 625
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Key facts
Qualifications
- Credit score: 625
- Age of business: 12+ months
- Monthly revenue: $8,000
- Personal guarantee: Required
- US citizenship: Required, or permitted residency
- Term length: 3-24 months
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Pros
- Funding is quick
- Transparent about costs and fees
- Looser qualifications than many banks
Cons
- Application takes a bit longer than competitors—10 minutes
- Application requires three months of bank statements
- 0-4% origination fees
- Only provide info on lowest APR not highest. You would need to submit an application to find out.
- No incentive to prepay loans since there are fixed fees
Lending Club
- Loan Amount: $5K-$500K
- Time in Business: 12+ months
- Monthly Revenue: $4200
- Min Credit Score: 600
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Key facts
Qualifications
- Credit score: Fair
- Age of business: 12 months
- Monthly revenue: $4,200
- Personal guarantee: Required
- US citizenship: US citizen, permanent resident, or long-term valid US visa
- Repayment terms: 6 months – 5 years
- Bankruptcy: No bankruptcies or tax liens
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Pros
- Initial application is quick and easy
- Requirements aren’t strict compared to other lenders
- Transparent about fees and restrictions
- Funds in as little as 1-3 business days
Cons
- Not a good option for new businesses
- Origination fee of 3.49% – 7.99%
BlueVine
- Loan Amount: $5K-$5M
- Time in Business: 12+ months
- Monthly Revenue: $24000
- Min Credit Score: 690
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Key facts
Qualifications
- Credit score: 690
- Age of business: 2+ years
- Monthly revenue: $42,000
- Personal guarantee: Required
- Repayment terms: 6 or 12 months
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Pros
- Quick and easy online application process
- Transparent about costs and fees
- Fast funding
- No origination fees, prepayment penalties, or termination fees
Cons
- No line of credit or term loans in ND or SD
- Short repayment terms
Fundbox
- Loan Amount: $1K-$100K
- Time in Business: 6+ months
- Monthly Revenue: $10000
- Min Credit Score: 500
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Key facts
Qualifications
- Credit score: 500
- Age of business: 3 months
- Monthly revenue: $10,000
- US citizenship: Required
- Repayment terms: Fees in equal installments over the 12 weeks
- Term length: 12-24 weeks
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Pros
- Simple and fast
- No personal guarantee or collateral required
Cons
- Potentially bad rates
- Caps out at under six figures
Reliant Funding
- Loan Amount: $5K-$400K
- Time in Business: 6+ months
- Monthly Revenue: $5000
- Min Credit Score: 525
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Key facts
Qualifications
- Credit Score: 525
- Age of Business: 6 months +
- Monthly Revenue: $5,000
- Term length: 3 – 15 months
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Pros
- Fast and simple application process
- Funding in as little as 24 hours
- Credit history will be reviewed but will not be the primary decision-maker
- Unsecured loans that require no collateral
Cons
- Longest term is 15 months
- No startups
- Requires business banking information
- Funding limits are not clearly stated
One Park Financial
- Loan Amount: $5K-$3M
- Time in Business: 8+ months
- Monthly Revenue: $10000
- Min Credit Score: 500
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Key facts
Qualifications
- Credit score: 450
- Age of business: 8+ months
- Monthly revenue: $10,000
- Collateral: Might be necessary if credit score is extremely low
- US citizenship: US citizens or permanent residents only
- Repayment terms: Repayment without prepayment penalty
- Term length: 6-12 months
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Pros
- Incredibly easy
- Great customer support
- Fast funding
Cons
- Professional service fee after receiving funding
- Aggressive sales tactics & high fees
Seek Capital
- Loan Amount: $5K-500K
- Time in Business: No Min
- Monthly Revenue: $0
- Min Credit Score: 660
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Key facts
Qualifications
- Credit Score: 660+
- Age of business: Accepts New Businesses
- Monthly revenue: No minimum
- US citizenship: Required for all owners
- Term length: Lender dependent
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Pros:
- No fees until the business accepts funding
- Application takes less than two minutes
- No tax return or financials required
Cons:
- Origination fees are 10% of the total funding amount
- No funding guarantee
- Multiple hard credit pulls could result in lower FICO credit scores
Torro
- Loan Amount: $10K-$575K
- Time in Business: 1 Year
- Monthly Revenue: $25000
- Min Credit Score: 500
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Key facts
Qualifications
- Credit score: 500+
- Age of business: 1 year
- Monthly revenue: $25,000
- Collateral: Not Required
- Personal guarantee: Determined in Underwriting
- US citizenship: Required
- Repayment terms: Up to 18 months
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Pros
- Application is said to take only minutes.
- Funding could show up in your account in 24 hours.
- Torro is able to communicate with many investors and lenders in their network.
Cons
- Fluctuating terms.
- Lack of information.
- Does require a solid credit score.
Sky Bridge Funding
- Loan Amount: $5K-$500K
- Time in Business: 6+ months
- Monthly Revenue: $12500
- Min Credit Score: 500
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Key facts
Qualifications
- Age of business: 6+ months
- Monthly revenue: $12,500
- US citizenship: Required for all owners
- Must have proof of business ownership
Read Review »
Pros:
- Work with a dedicated funding specialist
- Optional automated underwriting of $10,000 or less
- No minimum credit score
- No restrictions about how a business can use the funds
Cons:
- Must be in business for at least six months
- Minimum of $12,500 per month in bank deposits
- No available information on fees, APR, or terms
- Merchant Cash Advance is the only option with this lender
National Funding
- Loan Amount: $10K-$500K
- Time in Business: 6+ months
- Monthly Revenue: $20000
- Min Credit Score: 600
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Key facts
Qualifications
- Credit Score: 600
- Age of business: 6+ months
- Monthly revenue: $20,000
- Origination fee: 0-2%
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Pros:
- Easy and quick online application
- Same day approvals
- Fast funding
- Early payoff discounts
Cons:
- Rates are not available online
- Not all loan types explicitly state requirements
- No startups
Become
- Loan Amount: $8K-$500K
- Time in Business: 12+ months
- Monthly Revenue: $10000
- Min Credit Score: 600
View details
Key facts
Qualifications
- Credit Score: 600+
- Age of business: 12+ months
- Monthly revenue: $10,000
- US citizenship: Required
- Repayment terms: Varies widely
- Term length: Varies widely
Read Review »
Pros:
- Flexible funding options
- Access to 20+ reputable lenders with one application
- Assistance with working toward better credit
- Good reputation and positive online reviews from Become users
Cons:
- Brand new businesses can’t qualify
- Does not offer personal loans
LendingTree
- Loan Amount: $1K-$5M
- Time in Business: 12 months
- Monthly Revenue: $15000
- Min Credit Score: 580
View details
Key facts
Qualifications
- Flexible eligibility
- Quick online application process
- Borrow up to $2 million
Read Review »
Pros:
- Qualified startups can get financing
- Quick applications and pre-qualification
- Huge range of different loan types
- Relatively low borrower qualifications
Cons:
- Certain fees are in place.
- The website does not provide a lot of information.
Line of Credit Explained
Business loans have long provided business owners with the capital they need to invest in their business and allow it to grow to its full potential. There’s a wide variety of business loan types that are specifically designed for different purposes and which may also cater to specific financial profiles, such as startups as opposed to long-standing businesses.
A business line of credit is a type of business loan that’s popular due to its flexibility. It’s a revolving line that business owners can draw against as needed and is most commonly used for short-term funding that can pay off unexpected expenses and improve cash flow.
How is a Line of Credit Different from a Business Loan?
While a business line of credit generally falls under the umbrella of business loans, it’s actually pretty different from your traditional business loan for a variety of reasons. Let’s start with the similarities.
A line of credit loan is often considered a business loan simply because it’s money lent to a business owner that can be used for virtually any business-related expense. It can be used to replenish inventory, make payroll, and cover other business investments. It’s just a lot more flexible.
Here’s how a line of credit loan differs from your traditional business loan:
- They’re used multiple times.
- Payments aren’t monthly like normal business loans, but instead the amount owed is paid off only when used.
- A creditline (just like a credit card) doesn’t have any closing costs.
- A credit loan is used primarily for short-term purposes.
- They typically have lower interest rates than business loans.
How to Apply for a Line of Credit
While applying for a line of credit is typically less involved and more lenient than applying for your traditional business loan, there are still a few steps involved and things to consider, such as qualifications and the application process.
When it comes to qualifying for a business creditline, banks and online lenders look at several factors—the level of importance for each can vary depending on the lender, though revenue and time in business generally hold more weight than credit score.
Monthly or annual revenue
This is a determining factor when going through the application process with a lender. Some lenders will require your business to have a minimum monthly or annual revenue as a way to evaluate performance.
Time in business
How long your business has been operating is another metric lenders will look at. Some will have a minimum time of business when applying for a business creditline of 6-12 months, but not all will have a minimum. Some lenders offer a business credit line to startups.
Credit score
Many lenders will look at a business owner’s credit score to determine how risky it is to lend to them. Typically, those with higher credit scores (680 and above) have better chances of not only getting approved, but securing the best business line of credit rates.
Once you have a better idea of the qualifications involved in securing a line of credit loan, the next step is to start applying and comparing lenders to see what the best credit line rates are. If your business is new, you’ll want to be on the lookout for lenders who cater to startups, since time in business is often a requirement, as mentioned above.
Understanding what lenders look at will help prepare you when it comes time to searching for the best lender.
Choosing the Right Line of Credit Provider
Just like with any loan (personal, business, or otherwise), a business credit line comes with costs. While there aren’t any closing costs, you can expect to pay interest rates and possibly annual fees or late fees.
One of the key components to look at when comparing lenders is APR range. If you’re submitting a quick preliminary application using an online marketplace like Lendio, you can easily see the APR from various lenders you qualify for.
If you’re applying directly with a specific lender, check their website to see what their APR range is. Keep in mind that many online lenders will only conduct a soft credit check that won’t harm your score. So it may be worth it to submit an application to get a more accurate APR estimate.
Some other considerations when choosing the right provider:
- Time of funding
- Credit score minimum
- Monthly/annual revenue minimum
- Creditline amount offered
- Time in business minimum
What to Avoid with a Line of Credit
While a business line of credit can be a great way for a business to gain access to quick and flexible capital, it’s not always the right solution.
A business line of credit has a few downsides which should ultimately be considered when deciding if it’s the right financial tool for you:
- It often comes with fees and additional charges for maintenance and withdrawals.
- Business lines of credit typically have smaller borrowing limits and are intended for short-term use. This wouldn’t really be a good option for businesses that need a larger long-term loan.
- It can be difficult to acquire a line of credit loan for newer businesses.
- There is also higher risk involved. A business line of credit must be repaid even if a company fails.
Final Word
A business line of credit can be a powerful financial tool. It’s flexible and provides fast cash when your business needs it. It can even help your small business build good credit, which will come in handy down the road if you ever need to apply for a larger business loan.
Now that you have a better understanding of what’s involved and what you have to gain, the next step is to get started in comparing lenders to find the best provider for your business.