Best Startup Business Line of Credit 2021

Cure your cash flow problems with one of these startup lines of credit.
Best Overall
Lendio
Lendio
4.3 out of 5 stars
4.3
Loan max.
$500,000
  • Icon Yes  Light
    Variety of lenders and loans
  • Icon Yes  Light
    Fast, easy application
Best for Bad Credit
Fundbox
Fundbox
3.6 out of 5 stars
3.6
Loan max.
$100,000
  • Icon Yes  Light
    Automated application
  • Icon Yes  Light
    Low approval requirements
Most Convenient
Kabbage
Kabbage
3.1 out of 5 stars
3.1
Loan max.
$250,000
  • Icon Yes  Light
    Automated approval process
  • Icon Yes  Light
    Fast funding
Best for Longer Terms
Street Shares
StreetShares
2.9 out of 5 stars
2.9
Loan max.
$250,000
  • Icon Yes  Light
    Price match guarantee
  • Icon Yes  Light
    Repayment terms up to 3 years

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

If your startup has been around for at least six months, a startup business line of credit (LOC) can provide you with a form of revolving credit. You can withdraw funds, use them, pay them back, and then withdraw more. It’s kind of like a business credit card but with better rates, higher credit limits, and longer repayment terms (and a few other differences).

But who has the best business lines of credit for startups, and where should you get yours? We ranked your options to help you figure out the answer.

Let’s find the right LOC for your startup.

Info
What counts as a startup?
The word “startup” gets thrown around pretty loosely sometimes, so let’s clarify: in this review, we’ll use “startup” to mean businesses that have been in business for at least six months but less than two years and that make $100,000 or less in annual revenue.

Best startup business line of credit

Compare the best startup business lines of credit

Company
Loan min./max.
Lowest listed rate*
Min. annual revenue
Min. time in business
Get a loan

Lendio

$1,000/$500,000

8%

$50,000

6 mos.

Fundbox

$1,000/$100,000

4.66% drawing rate

$50,000

3 mos.

Kabbage

$2,000/$250,000

1.5 factor rate

$50,000

1 yr.

StreetShares

$5,000/$250,000

8%

$25,000

1 yr.

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

*Does not represent the typical rate for every borrower, and other fees may apply.

Lendio: Best overall startup business line of credit

Lendio

Lendio’s lending marketplace lets you compare LOC offers from various lenders, so you can feel confident you’re getting the best one.

Just about every startup should start its line of credit search with Lendio. It tops these rankings for the same reason it tops our rankings of the best small-business loans: Lendio makes comparing loan and LOC offers shockingly easy.

Lendio is a lending marketplace, not a lender. What does that mean for you? Simply that you just have to submit one LOC application to Lendio, and it will come back with several offers from various lenders. You can compare which have the best terms, the best APR, the highest credit limit—whatever you want—and then finish applying with that lender.

And since Lendio’s marketplace includes some of the lenders below, you really have no reason not to begin your line of credit journey at Lendio.

(As an added bonus, Lendio is one of two lenders on this list—Fundbox being the second—that requires less than one year of business history.)

Fundbox: Best for bad credit

Fundbox

Fundbox doesn’t do credit checks, so even small-business owners with a low credit score can qualify for its LOCs.

Not everyone has great credit. Life happens—and sometimes life happens in such a way that your personal credit score is not ideal. That doesn’t mean you can’t get a startup line of credit, though; it just means you should apply with Fundbox.

Fundbox has a very low minimum credit requirement. You can get approved with just a 500 FICO score. That’s lower than you’ll find from just about any other line of credit provider. As an added bonus, Fundbox also has low time in business requirements (a two month minimum) and revenue requirements ($50,000).

Low or nonexistent credit shouldn’t keep you from getting an LOC. Just ask Fundbox.

Bullhorn
How much does your credit score matter?

Most lenders will check your credit score when you apply for an LOC. Particularly when you’re a new business with no track record, your personal credit score can make or break your loan application. Learn more in our guide to how credit scores affect small-business loans.

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

Kabbage: Most convenient

Kabbage

Kabbage offers a convenient, automated approval process, plus three different ways to access your new line of credit.

Busy business owners can’t afford to waste time. Unfortunately, securing an LOC can get time consuming, between waiting to get approved and waiting to get funded. And if you don’t have time for that? Maybe Kabbage is more your speed.

Kabbage (like Fundbox), uses an automated approval process that can answer your application within minutes, so you don’t have to sit around and wait to hear back. After you get approved, Kabbage gives you three ways to draw on your LOC, so you can choose what works best for you. (If you choose PayPal, you can access funds almost immediately.)

If you’re all about fast, easy, and convenient, we think you’ll be all about Kabbage.

StreetShares: Best for longer repayment terms

Street Shares

While most lenders have LOC terms of one year or less, StreetShares gives you longer—up to three years—to repay your LOC.

Of course, sometimes it’s nice to be able to take your time. Many lenders put you on tight repayment schedules, so even your largest draw from your LOC must be repaid within one year (or even less). But then there’s StreetShares.

StreetShares has the longest repayment terms we’ve seen on startup lines of credit, with terms up to 36 months. That’s three years, which can translate to lower monthly payments for you. Good deal, right? (Speaking of good deals, StreetShares guarantees to match LOC price offers from another lender—or it gives you a $100 Amazon gift card.)

With StreetShares’s long repayment terms, time is on your side.

Info
Alternative lenders vs. traditional lenders
You may have noticed that all our recommended lines of credit come from online lenders rather than traditional financial institutions. That’s because banks usually have higher application requirements, so they work better for established businesses. Online lenders have more options for startups.
Grow your business today

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FAQS about startup lines of credit

What kinds of fees do lines of credit have?

Many lines of credit have origination fees. Some also charge an annual fee. You may also have cash advance fees or even monthly maintenance fees. Ask your lender to get the specifics for your line of credit.

Why get a line of credit instead of a business credit card?

There are a few reasons you’d want to apply for a business line of credit instead of getting a business credit card. First and foremost, LOCs are designed to make cash advances easy and affordable; credit cards usually have big fees for cash advances. And as we mentioned above, lines of credit tend to have lower APR than credit cards, plus longer repayment terms.

Generally speaking, lines of credit work best for larger working capital needs, like equipment purchases, bills, and business upgrades; a credit card works best for smaller business expenses, like staff lunches and office supplies.

When shouldn’t I get a line of credit?

Some lenders will not work with businesses in certain industries (such as gambling, adult entertainment, and marijuana). You probably won’t be able to get a business line of credit if you’re in one of those industries, so you shouldn’t waste time applying.

But for most businesses, the reasons they shouldn’t get a business line of credit are the same as why they shouldn’t get other types of financing: they can’t afford it. If you can’t budget to make payments on your line of credit (including the interest) then you’ll just dig yourself into a (debt) hole you can’t get out of. Make sure you can afford your LOC.

What lines of credit exist for more established businesses?

Our ranking of the best business lines of credit has options for businesses at various stages. But no matter what stage your business is at, we recommend Lendio as your first stop.

What other types of business financing should I consider?

Revolving lines of credit are great, but you’ve got plenty of other good financing options:

  • Term loans
  • Equipment financing
  • Invoice factoring
  • Business credit cards
  • Angel investors
  • Venture capitalists
  • Personal loans

The takeaway

A business line of credit provides a great, flexible way to finance your small-business startup, because a line of credit gives you more than just money—it gives you the cash resources you need to grow your business over and over and over again.

Get the most out of your line of credit by brushing up on how a business line of credit works.

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.
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