We think the five lenders above have the best lines of credit for most businesses. But for some businesses, these other options could work well too.
The starting rates on OnDeck’s lines of credit may seem a little high, but discounted rates on future financing make OnDeck worth looking at.
That’s right—OnDeck gives repeat borrowers discounted rates. You can even get discounted origination fees when you repeatedly borrow from OnDeck. (We explain more in our OnDeck Review.) So sure, it has a relatively high APR (the APR on an OnDeck line of credit starts at 31%). But when you decide to apply for a term loan in a year or two, that repeat borrowing discount might come in handy.
In other words, if your new line of credit is just the beginning of your business financing needs, then an OnDeck LOC might be your first step to discounted future rates.
Traditional lenders offer some of the lowest rates and highest credit limits you can find. Plus, many of them offer a choice of both unsecured and secured business lines of credit. (Securing your financing with collateral can further lower your interest rate.)
So why are they so far down on our list? Simple: big banks have much higher application criteria than most online lenders do.
For example, pretty much all banks require your business to be at least two years old, and some insist on more than that. To get a Wells Fargo business line of credit, for example, your business has to be at least three years old.
And while the alternative lenders above look for credit scores ranging from the low to mid 500s, most traditional lenders accept only credit scores over 700. Put simply, banks typically offer lines of credit to only their most creditworthy borrowers.