6 Best Business Lines of Credit in 2021

Best Overall
Lendio
Lendio
Min. line of credit
$1,000
  • Icon Pros  Dark
    Variety of lender and loan choices
  • Icon Pros  Dark
    Fast, easy application
Best for Low Rates
BlueVine
BlueVine
Min. line of credit
$5,000
  • Icon Pros  Dark
    Simple, quick process
  • Icon Pros  Dark
    Only PPP loans
Best for Bad Credit
Fundbox
Fundbox
Up to
$100,000
  • Icon Pros  Dark
    Automated application
  • Icon Pros  Dark
    Low credit requirements
Best for Longer Terms
Street Shares
StreetShares
Min. line of credit
$5,000
  • Icon Pros  Dark
    Long repayment terms
  • Icon Pros  Dark
    Modest application requirements
Most Convenient
Kabbage
Kabbage
Up to
$250,000
  • Icon Pros  Dark
    Automated approval process
  • Icon Pros  Dark
    Fast funding turnaround

Data effective 11/18/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Price Tag Approach
20

Brands considered

Money Approach
12

Features compared

Calendar Approach
30

Days of research

Person Approach
21

Business owners talked to

Business lines of credit (LOCs) offer flexible financing for small businesses. They let you borrow what you need (up to your credit limit), repay what you borrowed, and borrow again, paying interest only on the money you use. That makes LOCs a good way to deal with cash flow problems, take advantage of time-sensitive opportunities, and otherwise handle working capital needs.

Sound like something you want in on?

Great! We’ve done some digging to find the best line of credit out there. Our rankings explain what sets them apart and who they work best for, so you can find a small-business line of credit that fits your unique business needs.

Bullhorn
Need a refresher on LOCs?

We’ve got a brief refresher below, or you can check out our guide to how a business line of credit works.

Best business line of credit

Compare the best business lines of credit

Brand
Min./max. line of credit
Lowest listed rate
Min. revenue requirement
Get a loan

Lendio

$1,000/$500,000

8%

$50,000/yr.

BlueVine

$5,000/$250,000

4.8%

$40,000/mo.

Fundbox

Up to $100,000

4.66% draw rate

$50,000/yr.

StreetShares

$5,000/$250,000

8%

$25,000

Kabbage

Up to $250,000

1.5 factor rate

$50,000/yr.

OnDeck

$6,000/$100,000

31%

$100,000/yr.

Data effective 11/18/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Lendio: Best business line of credit overall

Strengths
Pro Bullet Fast application
Pro Bullet Wide variety of funding and lenders
Pro Bullet Personalized guidance and expertise
Weaknesses
Con Bullet High interest rates on some credit lines
Con Bullet Reports of hard credit inquiries

Lendio is our favorite source for business lines of credit. So why does it deserve the top spot? Easy—because it’s not a lender, but a lending marketplace.

Here’s what that means: you apply to Lendio with a brief online application. Lendio then takes your application and matches you with lenders that you qualify for. You then compare offers and choose the one that works best for you. (Our Lendio review breaks down the process more.) And Lendio works with several of the other lenders on this list, so your application on Lendio’s lending platform gives you a shot at most of our favorite lines of credit.

Lendio’s marketplace approach lets it offer large lines of credit and competitive rates. So for most businesses looking for a line of credit, Lendio should be your first (and hopefully only) stop.

BlueVine: Best for low rates

Strengths
Pro Bullet Low starting rates
Pro Bullet Monthly payments on some lines
Pro Bullet Same or next-day funding
Weaknesses
Con Bullet High borrower requirements
Con Bullet Potentially large fees

BlueVine’s business line of credit can compete with the big banks while offering the convenience of an online lender.

BlueVine’s 4.8% starting interest is comparable to (or even lower than) what you can find at a traditional bank. It’s a great deal, if you can qualify. BlueVine has higher application criteria than most of the other lenders on this list (at least for its lines of credit). It lends to business owners with at least $40,000 in monthly revenue ($480,000 a year) and credit scores over 650. And that’s the minimum—to qualify for the best rates, you’ll need more impressive qualifications than the minimum credit score.

Even so, if you want low rates on your business line of credit, BlueVine is a good place to start.

Fundbox: Best for bad credit

Strengths
Pro Bullet Automated application
Pro Bullet Low approval requirements
Pro Bullet Fast funding
Weaknesses
Con Bullet Low maximum loan amounts
Con Bullet High APR

Fundbox doesn’t offer the largest lines of credit, or the cheapest, but it very well might offer the most accessible.

That’s because Fundbox has some of the loosest application requirements we’ve seen for a line of credit. Businesses as young as two months can apply, and you need only $50,000 in annual revenue. As the cherry on top, Fundbox has a very low credit requirement—just 500. Now, Fundbox’s fee structure can make it expensive (you can get the details in our Fundbox review), and you won’t get an LOC over $100,000.

Even with those constraints, Fundbox offers a good way for business owners with less-than-stellar credit to get a line of credit.

StreetShares: Best for longer terms

Strengths
Pro Bullet Competitive rates and APRs
Pro Bullet Modest application criteria
Pro Bullet Long LOC repayment terms
Weaknesses
Con Bullet Longer funding time than competitors
Con Bullet Limited information on website

StreetShares offers the flexibility of a line of credit while giving you more time to pay off your balance.

Most online lenders have very short repayment terms, especially on lines of credit. Fundbox, for example, gives you 12 to 24 weeks. Kabbage offers between 6 and 18 months. StreetShares beats them all by offering terms up to 36 months. And sure, a long loan term plus a high interest rate isn’t always the best choice, but StreetShares has competitive rates to boot.

So if you’d like a little extra time to pay off your LOC, StreetShares provides just that.

Info
StreetShares and veterans
StreetShares’s messaging focuses on veterans, but don’t worry—you don’t have to be a veteran to get financing from StreetShares.

Kabbage: Most convenient

Strengths
Pro Bullet Multiple ways to access funding
Pro Bullet Fast, automated approval process
Pro Bullet No credit requirement
Weaknesses
Con Bullet High rates and APR
Con Bullet Confusing fee structure

Need your new LOC ASAP? Then Kabbage might be the right lender for you.

Kabbage uses an automated application, so you just connect Kabbage to your accounting software or bank account to get approved. After that process (which takes only a few minutes), you get three choices for using your capital: PayPal funds (usable immediately), direct deposit (accessible the next day), or a Kabbage card (takes a few days to get, but then works a lot like a debit card). It’s wonderfully convenient—as long as you can put up with high rates and confusing fees (explained in our Kabbage review).

If you want fast funds delivered in a way that works for you, you can't beat the convenience of Kabbage’s small-business line of credit.

Honorable mentions

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.

OnDeck: Best for repeat borrowing

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 banks: Best for established businesses

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.

Business lines of credit from traditional lenders

Brand
Min./max. LOC
Lowest listed rate
Annual revenue requirement
Get a loan

Bank of America

Starting at $10,000

3.75%

$100,000

Chase

$10,000/$500,000

Unlisted

Unlisted

Citibank

$10,000/$3 million

Unlisted

Unlisted

KeyBank

Unlisted

Unlisted

Unlisted

PNC

$20,000/$3 million

Unlisted

Unlisted

Santander

Starting at $10,000

Unlisted

Unlisted

TD Bank

$25,000/$500,000

5.74%

Unlisted

U.S. Bank

Up to $1 million

Unlisted

Unlisted

Wells Fargo

$5,000/$500,000

Prime + 1%

Unlisted

Data effective 11/18/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

If your business can meet those kinds of qualifications, by all means, get your business line of credit from a traditional bank. You’ll probably get a stellar deal, especially if you do your business banking at the same financial institution. But for many small businesses, alternative lenders are the way to go—even if they cost a little more.

Bullhorn
Alternative lending vs. traditional lending
Want to learn more about how banks and online lenders compare? We’ve got a guide to traditional banks vs. alternative lenders.

Business lines of credit 101

While business lines of credit often get lumped in with business loans, they’re a different kind of financing altogether. A term loan gives you money in one lump sum, which you pay back over time. A line of credit, though, gives you a credit limit. You can borrow what you want, up to that credit limit. Then you pay back what you borrowed (plus interest).

A business line of credit lets you keep borrowing and paying back over and over (this is called revolving credit), so you don’t have to reapply for financing every time a new need arises within the term of the credit line.

It’s kind of like a business credit card, but lines of credit usually work better for large working capital expenses. (In fact, many businesses enjoy the flexibility of using both a business line of credit and a business credit card.)

Calendar
Terms on LOCs
Some business lines of credit have a borrowing term, which basically means you can use your LOC as much as you want for a year (or whatever your term is), and then it expires. Pretty much all LOCs have repayment terms on the money you borrow, which can range from weeks to years.

How to use a line of credit

When you apply for a business loan, you’re given money for a specific purpose (like buying real estate or purchasing a new industrial mixer). But since lines of credit are a form of revolving credit that are not tied to one specific purpose, you can use them for all sorts of needs:

  • Purchasing equipment or inventory
  • Hiring staff and making payroll
  • Taking advantage of time-limited deals
  • Creating marketing campaigns
  • Smoothing over cash flow issues
  • Tiding over seasonal profit changes

That flexibility is great for you as a business owner—but it’s also why lenders like to be careful with who they extend credit lines too.

For more details on getting and using a business line of credit, check out our guide to how a business line of credit works.

Don't qualify for a business loan? Get a personal loan instead.

Using personal lines of credit for business

While we’ve been focusing on business lines of credit, we should mention that you can―in some circumstances―get a personal line of credit and use it for your business. But should you?

Well, that depends.

Pros and cons of personal LOCs

Pros
Pro Bullet No time in business requirements
Pro Bullet No business revenue requirements
Pro Bullet Low APR on secured LOCs
Cons
Con Bullet High credit score requirements
Con Bullet Use restrictions on some LOCs
Con Bullet High APR on unsecured LOCs

See, a personal line of credit can seem appealing because it has no time in business requirements or revenue requirements. So if you have a very young business (or you’re about to start one), you’ll have an easier time getting a personal line of credit than a business line of credit. Sounds good, right?

As you can probably guess, though, personal lines of credit have some cons you need to consider. For example, they often have high credit requirements―higher than many of the lenders on our rankings.

Plus, some personal lenders have restrictions on how you can use your borrowed funds, meaning you may not be able to use your personal line of credit on a business. And depending on the type of credit line you get, your personal LOC could come with a high interest rate and expensive fees.

The best personal lines of credit for business

If you still think you want to use a personal line of credit to fund your business, we suggest you look for a home equity line of credit, or HELOC. These are secured lines of credit that use your home as collateral.

That means that you can get a larger line of credit than you could without collateral. It also means that you can qualify for a much lower interest rate. In fact, HELOC interest rates are often below 10%―making them comparable to rates on many business lines of credit.

Just make sure you borrow carefully. Since a HELOC uses your house as collateral, defaulting on your payments could mean you lose your home. To keep your home safe, borrow only as much as you need and make all your payments on time.

Business line of credit FAQ

What is the average interest rate of a business line of credit?

There aren’t any reliable stats about the average interest rate on a business line of credit interest rate, but most starting rates we see range from 4.5% to 10%. Keep in mind, though, that those rates are for the most-qualified borrowers. For riskier borrowers, rates can go up past 30%.

What do you need to qualify for a business line of credit?

Business line of credit requirements will depend on what lender you go with. At minimum, you’ll need a 500 personal credit score, $50,000 in revenue, and a business that’s at least three months old.

To qualify for the best business lines of credit, you’ll want a credit score in the high 600s, over $100,000 in annual revenue, and a business over two years old.

How do I get a business line of credit?

If you meet the basic qualifications, you can apply for a business line of credit with the lender of your choice (we recommend the ones listed above). Lenders will need to see a bunch of information during the application process:

  • Business information (including type, age, and EIN)
  • Tax returns (personal and business)
  • Bank statements
  • Other financial statements
  • Credit history (including your personal and business credit score)
  • Business plan

What fees do lines of credit have?

The fees on a business line of credit vary by lender, but there are some common fees to watch out for:

  • Opening fee/origination fee
  • Annual fee
  • Maintenance fees (assessed monthly for unused lines)
  • Cash advance fees
  • Late payment fees

When you apply for a business line of credit, be sure to ask your lender about the fees that come with your specific line. Unexpected costs are the last thing you want on a product that’s supposed to help your business finances.

Are business lines of credit unsecured?

Sure, some business LOCs are unsecured—that is, they don’t require specific collateral from borrowers. Pretty much all lenders will require a personal guarantee, though, even an unsecured business line of credit. Some lenders may also require a blanket lien on your business. Again, we advise you to ask your lender about its specific collateral policies.

(And if any of the terms in this answer confused you, take a look at our guide to unsecured business loans to learn more about personal guarantees and collateral.)

The takeaway

Business lines of credit provide valuable working capital and cash flow help to many businesses. Many lenders offer lines of credit, but we believe Lendio has the best business line of credit. That’s because its competitive lending marketplace approach lets you compare line of credit offers to find the best deal.

Of course, we found plenty of other solid lenders too. So whatever your financing needs, we’re confident one of our recommended lenders will have the right line of credit for you.

Lines of credit are just one type of small-business lending available to you. Explore your other capital options with our rankings of the best small-business loans.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
Recent Articles
Gusto vs Quickbooks Payroll Software
Gusto vs Quickbooks Payroll Software 2021
We carefully analyzed each payroll software title’s suitability for different needs, such as business owners...
RingCentral Review: Plans and Pricing 2021
Sure, RingCentral is the VoIP provider of choice for over 350,000 businesses worldwide.1 But that...
What Business Owners Wished They Knew When Getting a Loan
What Business Owners Wished They Knew When Getting a Loan
Getting a loan can be a tricky process. Hear from small-business owners about what they...
21 Tips for Getting Invoices Paid on Time
21 Tips for Getting Invoices Paid on Time
Don’t spend your valuable time chasing payments. Business.org offers tips from small-business owners to help...