If you’re worried about qualifying for an unsecured business LOC, we recommend applying with Lendio. While it doesn’t lend itself, it shops around for you to find the best financing you can qualify for. And if Lendio decides you can’t qualify for a line of credit (because of poor credit, for example), it may show you other, non-LOC financing options.
Of course, Lendio isn’t your only option. Mostly we suggest you stick to online lenders, as business lines of credit from online lenders tend to be easier to get than credit lines from traditional lenders.
Both an unsecured line of credit and a secured line of credit can work well for your business―it mostly just comes down to your current needs.
If you need a credit line ASAP or you simply don’t have collateral to offer, then an unsecured credit line will work better for you. But if you care more about low interest rates and long repayment terms, you’ll prefer a secured line of credit.
For more information, we’ve got a guide to unsecured loans.
An unsecured credit card differs from an unsecured credit line a few ways.
Both an unsecured card and an unsecured line of credit give you revolving credit, so you can borrow, repay, and borrow again. Generally speaking, though, a line of credit will have a higher credit limit, while a business credit card will come with a lower credit limit. The same is true of interest rates―your average unsecured line of credit has a lower interest rate than your average unsecured card. (The specifics, of course, will depend on your card issuer or lender.)
Plus, lines of credit make it easier to get a cash advance (though you’re more likely to get cash rewards with unsecured credit cards).
Keep in mind, though, that credit lines are often harder to get. Many lenders require a high credit score to get a line of credit, whereas a credit card company may accept a fair or even bad credit score.
Want more details? Take a look at our detailed breakdown of lines of credit vs. credit cards.