When it comes to financing your business, there are times when you don’t know exactly how much money you’ll need. Rather than a closed-end business loan, you may need a revolving business line of credit that allows you to handle ongoing expenses. There are many companies that offer lines of credit for small business owners, and figuring out which one to work with can be overwhelming. To help you narrow it down, we identified the best business lines of credit based on their credit line amounts, terms, and eligibility requirements, among other criteria. Best Business Lines of Credit in 2024 Best Business Lines of Credit in 2024 Final Verdict Compare Business LOC How to Choose FAQs Methodology Pros & Cons Pros Relatively low revenue requirement Quick application process Low rates available Cons Monthly fees apply Personal guarantee required Established businesses only Why We Chose It With an American Express Business Line of Credit, you can qualify for up to $250,000—not as much as some other lenders, but enough to give you quite a bit of leeway for improvements, new inventory, etc. Amex’s rates are competitive; depending on the amount of the credit line and the desired term, rates can be as low as 2.0%. Amex has a quick application process, allowing you to apply and receive a decision within minutes. And Amex has a lower revenue requirement than most lenders; you only need a monthly revenue of $3,000 or more to qualify. However, Amex will only approve businesses that have been in operation for 12 months or more, and a personal guarantee is required for the line of credit. If you have a relatively young business or need a smaller credit line, you may have a better chance of qualifying for a business credit card than a business line of credit. Qualifications Pros & Cons Pros High credit line maximum Low credit score minimum Secured lines of credit are available Cons Slow disbursem*nt time High revenue requirement Potentially high rates Why We Chose It Lendio isn’t a lender. Instead, it’s a marketplace platform that allows you to get quotes from multiple lenders. Depending on your credit and your business revenue, you could qualify for a credit line as high as $500,000, and you can have up to 24 months to use it—longer than many lenders offer. Lendio also has secured credit lines. By providing collateral for the line of credit, you may have a better chance of qualifying for a loan or getting a better interest rate. However, the rates on Lendio’s lines of credit can be quite high; according to the company, rates can be as high as 60%. And it can take one to two weeks to fund the line of credit, which is longer than usual for business lenders. Qualifications Pros & Cons Pros Significant discounts for existing members Annual renewals available Secured options available Cons Only established businesses will qualify High minimum revenue required ($100,000 annually) Limited details online Why We Chose It If you are an existing Bank of America Preferred Rewards for Business customer, you can qualify for additional benefits when you apply for a Business Advantage Credit Line. You can qualify for an interest rate discount as high as 0.75% based on the program tier you’re in at the time of your application. Through Bank of America, you can qualify for a line of credit as high as $250,000. And while other credit lines have set terms, Bank of America’s line of credit is renewable on an annual basis, so you can continue to utilize it if necessary. The Bank of America business line of credit is only for established businesses. It has a high minimum revenue requirement, and businesses have to be in operation for at least two years to qualify. Qualifications Pros & Cons Pros Quick application process Gives access to cash within hours Low minimum credit score Cons Very high revenue requirements Added fees for bank wires Not available in all states Why We Chose It When you need to tap into a credit line fast, Bluevine could be a good option. You can apply for a business line of credit and receive a decision in as little as five minutes. And if you’re approved, you can start using the line of credit within a few hours. You can qualify for up to $250,000 in revolving credit, and terms are as long as 12 months. However, Bluevine’s eligibility requirements are strict. You need to be in operation for at least two years, and you need at least $40,000 in monthly revenue—much higher than many other lenders require. Qualifications Pros & Cons Pros High credit line maximum Reduced payments during revolving credit period Lower APRs than unsecured credit Cons Annual fee applies Limited information online Must apply over the phone or in person Why We Chose It Typically, business lines of credit are limited to $500,000 or less. But with PNC’s Secured Business Line of Credit, you can access up to $3 million. During the revolving credit period, you only have to make interest-only payments, and you may qualify for a lower APR than if you opted for an unsecured line of credit. There is very limited information available about PNC’s lines of credit online. The bank does not disclose the line of credit’s terms or rates. And you cannot apply online. Instead, you have to call or visit a branch in person. PNC doesn’t publicly disclose all of its eligibility requirements for its business lines of credit. In general, you should expect to need good to excellent credit and high monthly revenue to qualify. Qualifications When it comes to securing financing for your small business, a business line of credit can be a useful solution. During the line of credit’s term, you can tap into it repeatedly and use it to grow and expand your business. There are many lenders that offer business lines of credit. For those who need a relatively short term, Amex’s line of credit features low rates and allows you to access up to $250,000. For those who need a higher credit limit, PNC may be a better option; you can qualify for up to $3 million in revolving credit. Shopping around to find the best rates and terms is key. Lendio can be a helpful option since it allows you to compare offers from its partner lenders. Whichever you choose, pay attention to the lender’s rates, fees, and repayment terms to ensure you make an informed decision. A business line of credit is a type of financing that businesses can use to grow or expand their operations. Rather than receiving an upfront lump sum of cash like you would with a business term loan, a business line of credit allows you to access funds many times—up to the credit limit—within the designated term. Business lines of credit are useful if you will have ongoing financing needs or aren’t sure exactly how much money you’ll need. If you need short-term financing, an alternative option to consider is invoice factoring. With this approach, the invoice factoring lender pays you the amount of your outstanding invoices right away, minus its fee. Business loans and business lines of credit are both popular financing options, but they differ in several key ways. A business loan is a closed-end loan, meaning you receive a lump sum of cash and repay it in installments over a fixed term. The loan has a one-time disbursem*nt. Once you’ve spent the funds, you can’t access more cash unless you apply for another loan. With a business line of credit, you’re given access to a revolving line of credit. You can use it again and again for your business during the credit line’s term as long as you keep up with the required payments. When comparing your business line of credit options, think about the following factors: Most lenders allow you to apply entirely online. When you apply, you’ll need to provide the following information: Lenders will usually perform a personal credit check, and you generally need to have good to excellent credit to qualify for a line of credit. You can use a business line of credit for most of your business’ needs, including buying supplies, renting warehouses, purchasing vehicles, or paying vendors. However, some lenders have restrictions on fund use, such as prohibiting the purchase of real estate. Generally, lenders require good to excellent credit to qualify for a business line of credit. There are some companies, such as Fundit and Lendio, that accept credit scores as low as 560, but they usually charge much higher rates. Business lines of credit give you access to a larger credit line than you’d get with a credit card. While credit cards are often limited to credit lines of $20,000 or $30,000, you can access up to $3 million with a business line of credit. Because of their higher limits, business lines of credit are harder to qualify for, especially if your business is young. To qualify for a business line of credit, you typically need a score in the good to excellent range, so a score of 670 or better. Some lenders will work with borrowers with lower credit scores, but it’s harder to qualify for a line of credit. Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews. To rate business lines of credit, we collected hundreds of data points for 18 options, including line of credit amounts, repayment terms, fees, and requirements, to ensure that our reviews help users make informed decisions about their banking needs. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.Best Business Lines of Credit in 2024
Best for Backed by American Express : Amex Business Line of Credit
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Best for Comparing Multiple Offers : Lendio Business Line of Credit
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Best for Bank of America Customers : Business Advantage Credit Line
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Best for Fast Credit Access : Bluevine Business Line of Credit
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Best Large Credit Line : PNC Secured Business Line of Credit
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Final Verdict
Compare the Best Business Lines of Credit
Line of Credit APR Range Loan Amounts Loan Terms American Express Business Line of Credit Best for Backed by American Express 2.0%–27.0% $2,000–$250,000 6–18 months Lendio Business Line of Credit Best for Comparing Multiple Offers 8%–60% $1,000–$500,000 12–24 months Bank of America Business Advantage Credit Line Best for Bank of America Customers As low as 9.25% $10,000–$250,000 12 months and up Bluevine Business Line of Credit Best for Fast Credit Access As low as 6.2% $5,000–$250,000 6–12 months PNC Secured Business Line of Credit Best Large Credit Line Not disclosed $100,001–$3 million Not disclosed Guide to Choosing the Best Business Lines of Credit
What Is a Business Line of Credit?
Business Lines of Credit vs. Business Loans
How to Compare Business Lines of Credit
How to Get a Business Line of Credit
Frequently Asked Questions
What Can You Use a Business Line of Credit for?
Can You Get a Business Line of Credit With Bad Credit?
How Do Business Lines of Credit Compare to Credit Cards?
What Credit Score Do You Need for a Business Line of Credit?
Methodology
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See Also
What is a business line of credit and how does it work? | BankrateSmall Business Line of Credit: How to Choose the Right OptionElevate Your Business with a Line of Credit | BluevineHow To Get A Business Line Of Credit In 5 Steps Best Small Business Loans for Women Best Online Business Loans Best Fast Business Loans of 2024 Best Credit Builder Loans of 2024 Best Personal Loans With a Co-Signer or Co-Borrower for March 2024 Best Home Improvement Loans for March 2024
FAQs
What is the SBA rate for 2024? ›
The current prime rate (as of April 2, 2024) is 8.5%. That means SBA 7(a) loan fixed rates can range between 13.5% and 16.5% depending on your loan terms.
What is a good line of credit interest rate for business? ›The business line of credit interest rate depends on the amount and terms you choose, your credit score and the lender's current offerings. Typically, rates can range between 3% to 39% or higher. In addition, some lenders may charge the following fees: Origination fee: $0 to 2% of the loan amount.
Who has the best lines of credit? ›Best Personal Lines of Credit
- Best for credit card consolidation: Tally.
- Best for no annual fees: U.S. Bank.
- Best for a large line of credit: Truist.
- Best for added benefits: Elastic.
Apr 11, 2024
The number one reason to open a business line of credit is to gain access to short-term funding. Most businesses use these funds to support financing for operational expenses like supplies and payroll or for increasing inventory.
Will interest rates go down in 2024? ›“The early 2024 expectations for sharp Fed rate cuts are now highly unlikely to happen,” says Selma Hepp, chief economist at CoreLogic. “As the economy continues to grow, we expect the Fed to keep rates higher for longer.
What is the SBA 7a interest rate? ›9.50% - 11.25%
Best Business Loans Of May 2024
- QuickBridge – Best for Fast Business Loans.
- OnDeck – Best for Short-Term Business Loans.
- American Express® Business Line of Credit – Best for Business Lines of Credit.
- Wells Fargo – Best for Business Lines of Credit From a Bank.
- Fora Financial – Best for Large Business Loans.
Two factors that contribute to your credit score are the number and type of credit accounts. If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended.
Can you negotiate interest rate on line of credit? ›Negotiate the interest rate you have to pay. Be reasonable in your demands and prepared to go to a different bank if you can't get the rate you want. No bank will lend you money at less than the prime rate. Many will try to charge you prime plus 2%.
What is the easiest line of credit to get approved for? ›Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Personal loans with essentially no approval requirements typically charge the highest interest rates and loan fees.
Is there a downside to a line of credit? ›
Lines of credit can be used to cover unexpected expenses that do not fit your budget. Potential downsides include high interest rates, late payment fees, and the potential to spend more than you can afford to repay.
What is the maximum business line of credit? ›A typical business line of credit ranges from $5,000 to $500,000, but the amount a business is approved for varies based on its financial history and creditworthiness.
Can I use a business line of credit to buy a car? ›Dealerships are often able to finance vehicle purchases with business credit. However, since the process is more complicated than using personal credit, some dealerships may try to retain the title of the vehicle, which can put you at risk.
Is it better to get a business credit card or line of credit? ›The bottom line
It may be beneficial to use an LOC to pay for expensive items over time. On the other hand, using one of the best business credit cards for everyday business expenses is often a sound strategy. With either option, you will only pay interest on the money you use.
To be eligible for a business line of credit, applicants must have a minimum personal FICO credit score of at least 660 at the time of application, have been in business for at least one year, have a valid business checking account and have an average monthly revenue of at least $3,000.
What is the SBA 25 year fixed rate? ›2021
| 2021 | Jan | Dec |
|---|---|---|
| 25 Year SBA 504 | 2.692 | 3.023 |
| 20 Year SBA 504 | 2.653 | 2.875 |
| 10 Year SBA 504 | 2.438 | 2.793 |
| 25 Year Refi SBA 504 | 2.733 | 3.036 |
Because SBA loans' interest rates are tied to the WSJ Prime, both for fixed- and variable-interest loans, the higher the WSJ Prime, the higher the interest rates for SBA 7(a), 504, and Express loans. See the table below for current rates for SBA-backed small business loans.
What is the current base rate? ›The current base rate is 5.25%.
What is the current interest rate? ›Current mortgage and refinance interest rates
| Product | Interest Rate | APR |
|---|---|---|
| 20-Year Fixed Rate | 7.18% | 7.23% |
| 15-Year Fixed Rate | 6.73% | 6.81% |
| 10-Year Fixed Rate | 6.73% | 6.80% |
| 5-1 ARM | 6.58% | 7.89% |