Best Startup Business Line of Credit 2021

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.

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.)

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.

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.

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.

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.

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.

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.

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.

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

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.