Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.
Updated on
Best Business Line of Credit to Get In 2022
A business line of credit is similar to a credit card in that you only pay interest on what you use. This type of business funding can help keep interest charges and other fees to a minimum. Check out these six best business lines of credit below to start your search for working capital.
Written by:Michelle Lambright Black
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
Fact Checked by: Dr. JeFreda R. Brown, DBA, CFEI and a highly respected expert
A Business Line of Credit (LOC) is a flexible, short-term financing option used to cover payroll, purchase inventory, handle emergency expenses, finance growth opportunities, and more. It differs from a small business loan in that instead of being given a lump sum of money, you only draw on the specific amount you need. Our team of financial experts reviewed and ranked the top online lenders to help you get funded. Read on to discover our choices for the six best business lines of credit.
Nearly 25% of borrowers turn to online lenders to get the financing they need, according to a report from the Federal Reserve. However, not all lenders offer the same terms for business loan products and lines of credit.
In this review we highlight each provider’s rates and fees and explain what makes each lender a good option. We also share potential downsides of each lender, and provide a methodology you can use to select the best option for your needs.
Best Business Line of Credit to Get In 2022 - Full Overview
Check out the six lenders below that offer the best line of credit to get in 2022.
1. Kabbage: Best for High Borrowing Amounts
A business line of credit from Kabbage may be a solid choice for small business owners in need of substantial amounts of funds. American Express acquired the small business lender in 2020, making Kabbage a top choice for security, as well.
Borrowers with at least 12 months in business may enjoy a credit line between $2,000 and $250,000 or more depending on qualifications. You’ll repay each draw as an individual installment business loan, and the monthly fee you pay can vary depending on creditworthiness, repayment term, and more.
*Note: Kabbage charges a monthly fee rather than an interest rate. These fees should not be confused with an APR, which would be higher.
Pros
Cons
Kabbage differs from other lenders in several ways. The lender treats each draw from your line of credit as an individual installment loan. You must repay each loan in either 6, 12, or 18 months, depending on the amount you borrow.
Kabbage charges customers in an unique way. Instead of an interest rate, Kabbage charges a monthly fee each month you owe an outstanding balance. The lender provides a comparison tool in your loan agreement to show how its monthly fees would compare to a standard APR.
Main Features
| Min. Credit Score | Min. Time in Business | Min. Monthly Revenue | Loan Amount | Monthly Fees |
| 640 | 12 Months | $3K | Up to $250,000 | 2-9% for 6-month loans, 7.5-18% for 12-month loans, 15.75-27% for 18-month loans |
The Bottom Line
A Kabbage line of credit may work well for small business borrowers without perfect credit, but the fees the lender charges can be high when you calculate their comparable APR.
Try Kabbage
Read the full Kabbage review for more details.
2. Fundbox: Best for Low Interest Rates
Fundbox offers unsecured business lines of credit with competitive interest rates starting at 4.66%. The online lender extends business lines of credit up to $150,000 to qualified borrowers as soon as the next business day after approval.
Furthermore, borrowers only need a fair minimum personal credit score of 600 to qualify for a business line of credit with Fundbox. However, the lender’s repayment terms may be tighter than you encounter elsewhere.
Pros
Cons
Fundbox borrowers may qualify for a line of credit as high as $150,000 and an APR between 4.66% to 8.99%. The lender requires weekly payments with an automatic debit from your business checking account, and the repayment term is a short 12- or 24-week time frame. Small business borrowers need a FICO Score® of 600, at least $100,000 in annual revenue, and ideally six months or more in business.
Main Features
| Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| 600 | 6 Months | $100,000 | Up to $150,000 | 4.66% - 8.99% |
The Bottom Line
A business line of credit from Fundbox may be a good fit for well-qualified borrowers looking for competitive interest rates.
Try FundBox
Read more in the full Fundbox review more details.
3. Bluevine: Best for Startups
Bluevine offers a business line of credit with the potential for high credit limits (up to $250,000) and low interest rates (as low as 4.8%) for well-qualified borrowers. Not only can Bluevine’s terms compete with traditional financial institutions, it also offers a streamlined application common to online lenders.
Pros
Cons
Your business will need to be in operation for at least six months to qualify for a line of credit from Bluevine—a time requirement that’s half of what some other lenders require. However, the lender also has a minimum monthly revenue requirement of $10,000, which could be difficult for some to satisfy. You must repay each draw within six or 12 months, and the lender offers both fixed weekly and monthly payment options.
Main Features
| Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| 625 | 6 Months | $120,000 ($10,000 per Month) | Up to $250,000 | Starts at 4.8% |
The Bottom Line
A business line of credit from Bluevine may be a good fit for companies with limited time in business and fair personal credit scores. Well-qualified borrowers looking for low interest rates or higher credit limits may be interested in working with Bluevine, as well.
Try Bluevine
Read more in the full BlueVine review more details.
4. Credibly: Best for Bad Credit
Credibly offers unsecured and secured business lines of credit with low interest rates starting at 4.8%. Well-qualified borrowers may receive flexible credit lines as high as $250,000.
In addition to competitive APRs and high maximum borrowing potential, Credibly also has solutions for borrowers with bad credit. The online lender accepts applicants with personal FICO scores as low as 560, but borrowers with lower credit scores or other increased borrowing risk factors shouldn’t expect to receive the lender’s lowest interest rates.
Pros
Cons
Credibly gives would-be borrowers the chance to prequalify online for a business line of credit. Thanks to the online lender’s more forgiving qualification requirements (e.g., 560 FICO score, $50,000 in annual revenue, and six months or more in business), you may have an easier time opening a business line of credit from Credibly than you would elsewhere.
Main Features
| Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| 560 | 6 Months | $50,000 | $250,000 | 4.8% |
The Bottom Line
Borrowers with poor personal credit or revenue limitations may be interested in Credibly’s unsecured business line of credit. Yet the low potential interest rates and high maximum credit lines mean that Credibly may also appeal to borrowers with good credit.
Try Credibly
Read the full Credibly review for more details.
5. Rapid Finance: Best for Alternative Financing
Rapid Finance offers unsecured business lines of credit up to $250,000 to qualified borrowers. In addition to being a direct lender, the company also works with dozens of lending partners which can give borrowers more opportunities to qualify for financing. If you open a line of credit, you may be able to access your credit line within hours after approval.
Pros
Cons
Credit limits with Rapid Finance range between $5,000 and $250,000 for business lines of credit. The repayment terms vary between 3 and 18 months and come in the form of automatic drafts—daily, weekly, or monthly. However, your repayment term may reset each time you take a new draw against your credit line.
The Bottom Line
Businesses who aren’t sure what type of financing they want may enjoy the variety of lender options and the added one-on-one guidance from a Rapid Finance business loan representative. If the cost of borrowing is your main concern, though, you may be able to find a more affordable business line of credit elsewhere.
Try Rapid Finance
Read the full Rapid Finance review for more details.
6. OnDeck: Best for Fast Funding
Business lines of credit from OnDeck feature a simple application process, same-day funding, and business credit building potential. If you qualify for a business line of credit, your credit limit will range between $6,000 and $100,000.
Despite the lender’s lenient qualification standards, interest rates start at 35.9%, and OnDeck also charges both origination and monthly maintenance fees.
Pros
Cons
You may be able to open an OnDeck business LOC with at least one year in business, $100,000 in annual revenue, and a personal FICO score as low as 600. The lender distributes funding the same day you’re approved for a business line of credit. Customers can continue to access their credit line 24/7—receiving funds from future draws any time.
Repayment terms with OnDeck are 12 months maximum, but the term resets after each new draw. The lender also requires automatic monthly payments in the form of a business checking account debit.
Features
| Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| 600 | 1 Year | $100,000 | $6,000 - $100,000 | Starts at 35.9% |
The Bottom Line
Small businesses that need same-day access to funding may enjoy the speed of a business line of credit from OnDeck. Yet due to high interest rates and additional fees, it’s important to consider the cost of borrowing and make sure that the funding solution fits your budget.
Try OnDeck
Read the full OnDeck review for more details.
How to Choose the Best Business Line of Credit
When choosing a line of credit for your business, there are numerous details you’ll want to review. Below are some of the key factors our experts considered when ranking the top lenders.
- Qualification Process: Can your business satisfy a lender’s credit score requirements, stated annual revenue, time in business, etc.? If not, that business line of credit is probably a poor fit for you.
- Interest Rates and Fees: Consider both interest rates and fees to get a clear picture of the cost of borrowing. Note that some LOCs might feature usage fees, origination fees, or maintenance fees that could offset the perceived savings of a lower rate.
- Other Loan Features: Details like the maximum credit line available, repayment term (i.e., weekly vs. monthly), and more matter when you’re shopping for a business LOC.
- Application Process: Pay attention to each lender’s process and funding speed. Online lenders often offer faster funding; whereas SBA lenders and traditional financial institutions may take weeks or even months for funding.
- Customer Support: The level of customer support a lender offers is another important detail to consider. Can you talk to a live representative? Are the business hours convenient? Answers to such questions matter when choosing the best business LOC for your company.
- Online User Reviews: No lender has a perfect track record in terms of customer satisfaction, yet independent review sites like Trustpilot can help you spot red flags and discover whether the lender has a better or worse reputation than average.
- Perks and Bonuses: Some business LOCs come with special offerings that could benefit you. Payment flexibility, advanced or user-friendly technology, and transparent advertising are a few examples of perks that you might discover.
Main Features of the Best Business Line of Credit Companies
| Company | Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| Fundbox | 600 | 6 Months | $100,000 | Up to $150,000 | 4.66% - 8.99% |
| Bluevine | 625 | 6 Months | $120,000 | Up to $250,000 | Starts at 4.8% |
| Credibly | 560 | 6 Months | $50,000 | $250,000 | 4.8% |
| Kabbage | 640 | 12 Months | $3,000 monthly | $2K-$250K | 2-9% for 6-month loans 7.5-18% for 12-months loans 15.75-27% for 18-month loans |
| OnDeck | 600 | 1 Year | $100,000 | $6,000 - $100,000 | Starts at 35.9% |
What is a Business Line of Credit?
A business line of credit is a flexible form of financing that lets your company borrow multiple times against the same credit line. As you repay all or a portion of the money you borrow (plus interest and fees), you should have access to make future draws from the same lender without submitting a new application for financing.
How Does a Business Line of Credit Work
A business line of credit enables business owners to withdraw funds whenever needed. The borrower can keep withdrawing funds, as long as that borrower keeps current on loan repayments and doesn’t go over the credit limit.
Business credit line use has remained stable over the past year at 32%, even as small business loans decreased after the expiration of the Paycheck Protection Program. However, rates for both credit lines and term loans have continued to increase.
Source: Federal Reserve Bank of Kansas City
To get a business line of credit, you’ll need to prove your business is legitimate. Expect the lender to ask how long the business has been in existence – six months or more is a good rule of thumb for loan approval. You’ll also need to show your minimum annual revenue flow, which proves you have the ability to repay the line of credit.
A good rule of thumb here is annual revenues equal or higher than your line of credit loan request (i.e., if you’re asking for a LOC of $25,000, you’ll need to show that, at minimum, your business revenues exceed $25,000 annually).
Who Can Use A Business Line of Credit?
Business lines of credit are suitable for established businesses with large recurring expenses. Businesses generally use a business line of credit for everyday operations such as payroll, supplies, general cash flow, seasonal inventory, etc. Some firms also use equipment lines of credit to finance their operation.
According to data from the U.S. Bureau of Labor Statistics, about 20% of new businesses fail during the first two years. Historically, cash flow problems are among the top reason for business closures, regardless of the economic environment
Even if cash flow is sufficient, every business has rough periods. Successful maintenance of any company requires regular cash flow. Many companies apply for a line of credit and only use it when they need it.
To be eligible, you will need to be in business at least six months, with annual revenue of $25,000 or more. Additionally, applicants may need a credit score of 600 or above. Lines of credit usually need to be repaid within 3-12 months and are a form of short-term financing.
APR rates can range from 9%-99% depending on credit history and annual business turnover, among other variables. While the rates can be high, this is offset because businesses only need to use what they require and only pay interest on what they borrow.
How to Get a Business Line of Credit
Below are five general steps you can take to open a business line of credit.
- See where you stand. When you apply for a business line of credit, the lender may review details like your credit score (personal and business), time in business, and annual income. It’s critical to know where you stand in each category.
- Determine if you’re eligible. Make a list of lenders offering business lines of credit with eligibility criteria you can likely satisfy. If you know you have fair credit and a lender requires good credit, you shouldn’t include the lender on your list of possible funding sources.
- Gather your documents. Many lenders will require you to submit documentation along with your financing application. Having your business tax returns, business bank statements, and other financial reports ready could speed up the funding process.
- Shop around. Comparing interest rates, fees, and benefits from multiple lenders can help you find a business line of credit that’s best for your situation.
- Apply. Once you settle on your preferred business line of credit, it’s time to apply. Be sure to fill out the complete application and send in any documentation the lender requests promptly.
Business Lines of Credit vs. Business Credit Cards vs. Loans: What's the Best Option
About 33% of small businesses applied for some kind of financing last year, according to the 2021 Small Business Credit Survey (SBCS) from the Federal Reserve. This include credit cards, lines of credit, and/or term loans.
Business Line of Credit vs. Business Credit Cards
Business credit cards and business credit lines own the same financial lineage – they both offer business owners access to much-needed working capital. Typically, business lines of credit offer higher credit limits than business credit cards, so if you’re in need of a large amount of capital, a line of credit may be your best option.
- A small business line of credit: A line of credit is a revolving small business loan. Once the line of credit is approved, the business owner can access the funds at any time. The borrower repays the funds used from the line of credit either daily, weekly, or monthly, with interest.
- A business credit card: A business credit card also offers business owners access to capital up to a certain credit limit. The main perk of a business credit card is earning card rewards, such as cashback, frequent flier miles, and discounts on common business services. Keep in mind, though, that credit limits are typically lower than with business lines of credit.
Business Line of Credit vs. Small Business Loan
Business lines of credit and small business loans both provide capital to corporate borrowers. But there are a few key differences between these products. Business lines of credit tend to be more flexible but demand higher interest rates. Business loans may offer higher loan amounts but stricter criteria.
- A business line of credit: This product is a good choice if you need funds to cover business expenses and expect to be able to pay the loan back fast. Interest rates are typically higher than loans, but you’ll pay only for the amount of credit you use.
- A small business loan: Term loans offer set terms and a fixed repayment schedule. You’ll receive the lump sum you’re approved for and begin paying back the debt right away.
Secured vs. Unsecured Line of Credit
One element that a line of credit has in common with a term loan is the possibility to be secured or unsecured. Here are some of the key differences between a secured and unsecured business line of credit.
- Unsecured business line of credit: If a lender is comfortable with the risk profile of the borrower, they may approve an unsecured business line of credit, meaning that they don’t demand collateral. This is usually the case with well-established companies that have a good revenue record and are requesting a smaller amount (generally less than $100,000).
- Secured business line of credit: when a lender feels there’s a higher level of risk, they may insist upon a secured line of credit. In this situation, they will demand some form of collateral – an asset belonging to the company that the lender can claim if the borrower defaults on the loan.
Online lenders typically offer unsecured lines of credit, which are popular with small businesses that need help with working capital. In a Fed survey, 79% of borrowers said that meeting operating expenses was their reason for applying for unsecured business financing.
Final Thoughts
A business line of credit can provide a financial cushion when your business experiences a cash flow crunch. If you anticipate slow seasons in your business, you can apply for a business line of credit in advance, long before your business needs to access the funds This preliminary action allows your business to stay afloat during hard times and gives you peace of mind when it comes to the financial security of your business.
Frequently Asked Questions(FAQ)
Can you get a business line of credit with bad credit?
Although it’s harder to get a business line of credit with bad credit, it’s not impossible. Online lenders tend to have more lenient credit requirements than traditional banks, making lines of credit accessible to some borrowers with lower credit scores.
Does opening a business line of credit improve your business credit scores?
Opening a business line of credit and making timely payments can improve your business credit score over time. Just be aware that not making payments will damage your credit score. Only borrow what you can safely pay back.
Are business lines of credit unsecured?
Business lines of credit are typically unsecured, meaning that they do not require collateral. However, some lenders also offer secured lines of credit that use property or equipment as collateral.
Can I get business credit with a new LLC?
Although most business loans and lines of credit will require at least six months to a year of operations from a potential client, you can still access credit with a new LLC. The easiest way to go about getting credit may be to apply for a business credit card. Typically, these lenders will look at your personal credit score instead of your business credit score when determining whether to accept you as a client.
Is a business line of credit better than a loan?
A business line of credit may or may not be better than a loan. It depends on your requirements, business profile, and goals. If you need flexibility and plan to pay down your debt quickly, a line of credit may be preferable. If you need a large sum of money and want set terms, a loan may be the better choice.
Written by: Michelle Lambright Black
Michelle Lambright Black is a credit expert with over 19 years of experience, a freelance writer, and a certified credit expert witness. Michelle's work is featured with numerous publications including Forbes, myFICO, Bankrate, U.S. News & World Report, and Reader’s Digest, among others.
More about me
Reviewed by: Sarah Brooks
Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.
More about me
Fact Checked by: Dr. JeFreda R. Brown
Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal to help others develop and maintain financial wellness.
More about me