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Best Small Business Lines of Credit: How They Work, Rates & Lenders

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$6,000 - $100,000
  • Flexible borrowing
  • Lower interest rates
  • Improves cash flow
  • Difficult to qualify
  • Can be expensive
  • Requires discipline and careful budgeting

Best Small Business Lines of Credit: How They Work, Rates & Lenders

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How Do Business Lines of Credit Work

Businesses constantly battle cash flow challenges. While cash flow challenges keep your attention focused on keeping accounts healthy and bills paid, it can interfere with growing your business. The solution? A business line of credit. Keep reading to learn more. 

What is a business line of credit?

A business line of credit is a flexible and convenient way of borrowing money with many benefits. Typically, once approved by a lender, a business is given a specific amount of credit known as a credit limit. The business can borrow as little or as much of that credit limit as they want for as long as the line of credit stays open. You are only charged interest on the amount that you borrow. Also, as you make payments on the amount you borrowed from the line of credit, the amount paid then replenishes and you can borrow it again at a future date. 

Business lines of credit are ideal for business owners who may not know exactly how much money they will need. They are also a good source of working capital you can borrow against using a business checking account. Simply use a debit card or write checks from the business checking account attached to the business line of credit. You can also withdraw cash from a bank branch or use an ATM to take funds from the business line of credit if you need to pay for anything in cash. 

When it comes to how much of a credit limit your business can get for a business line of credit, a lender will look at your credit scores, annual revenue, and years of business operation to determine how much they are willing to allow you to access. A business line of credit may or may not be backed by an asset. If backed by an asset, they can come with lower rates than other options.

Business Line of Credit Lenders


A business line of credit is a valuable resource for businesses. Hence why Bluevine specializes in business lines of credit up to $250,000. With a business line of credit being in high demand, Bluevine is a competitive lender that offers a streamlined application process and fast funding. As a financial technology company, you can access offers online and get a decision in minutes. Backed by Celtic Bank, a member of the FDIC (Federal Deposit Insurance Corporation), Bluevine business lines of credit can help build business credit. Plus, most credit lines come with a simple interest rate, which can make them more straightforward and easier to compare. Bluevine shines for fast funding, flexible requirements and large credit lines with limited fees. 

  • Funding in as little as 24 hours deposited directly to your account 
  • Low minimum credit score requirement compared to other lenders
  • Focus on business cash flow and credit score 
  • High credit limits (up to $250,000) with no prepayment penalties or monthly maintenance fees 

On the downside, Bluevine may be more expensive than competitors. Additionally they may require more frequent repayments, typically weekly or monthly. Before taking out business credit, explore your options and evaluate how it will impact your business, both positively and negatively. You may also want to consider what you can qualify for. To learn how to improve your position and return more competitive offers, visit mySMBscore. We can help position you for success.


OnDeck is a Bluevine competitor that also offers business lines of credit. With lines of credit up to $100,000 available, OnDeck offers customizable repayments in which you only pay for what you borrow. While this may sound enticing, remember, with a line of credit the industry standard is that you only pay for what you borrow. However, some business lines of credit may have more fees than others. At OnDeck you can find out what you’re eligible for with no hard credit pull, which can allow the opportunity to evaluate your decision before taking the plunge. If you don’t love the offer you receive you may want to check with another lender or source or consider evaluating business financials and credit score. Turn to mySMBscore to learn more about how to increase your chance of qualifying for a business loan or line of credit. 

To qualify for OnDeck you should have at least one year of business with an annual business revenue of at least $100,000. Similar to Bluevine, OnDeck may have high interest rates coupled with fees that can drive up the cost of borrowing. OnDeck does charge a monthly maintenance fee, and while it’s not a lot of money, it can add up over time. While a convenient option, you will want to consider the bottom line and what’s most important to the business. Some of the highlights of working with OnDeck include…

  • Fast funding times
  • Large borrowing amounts 
  • Flexible requirements to qualify

How to get a business line of credit

To get a business line of credit, you’ll need to qualify. Qualification requirements can vary depending on the lender, but you should have healthy financials before applying. As a business owner, you should always monitor business finances. At mySMBscore you can glimpse how likely your business is to qualify for a line of credit or loan. With access to data, lenders use to approve loans, you can intelligently find ways to improve financials. At mySMBscore you can access information such as credit usage, credit age, inquiries, account mix, and more. Plus, you’ll even be able to unlock personalized loan offers. 

Here are some things you may want to consider when reviewing these three most important criteria lenders use to determine eligibility.

  • Credit history

Before applying for a business line of credit, you will want to review your credit scores, your personal and business ones. If you have a good business credit score, great. Lenders will consider your business credit score and the underlying business financials, this would be considered “ability to pay”. However, they are going to look into your personal credit history as well to determine if you are responsible for debt, this is called “willingness to pay”. Most lenders are going to want to see a personal  credit score of at least 680, and some are going to want to see a score of 700 or more. You may be able to find lenders that offer business lines of credit to credit scores as low as 600 or even 580.  The reason for this is that without collateral for the loan, your personal credit score tells lenders your willingness to repay debt.  However, if you have low personal credit, no collateral and decent cash flow, the loan will  often come with higher interest rates and more fees. 

Before applying for your business line of credit, consider obtaining a free credit report to see if everything on there is accurate and if there is any way you can quickly increase your personal credit score. Even paying down some debt on a personal credit card could be enough to boost your credit score to the point that it can help you qualify for a higher credit limit for your business line of credit. At mySMBscore you can monitor your business credit score and history and access information that will improve your chance of qualifying for a loan with a competitive rate and terms. 

  • Business revenue

Before applying for a business line of credit, it’s important to take a look at your books to see what kind of revenues your business is pulling in. Many lenders will have a minimum revenue amount that they want their business customers to be pulling in each month. Business revenue minimums vary from lender to lender. For example, one lender may require a minimum of $10,000 a month in revenue to qualify for a business line of credit. In contrast, another may want a minimum annual revenue of $250,000 or $350,000.

  • Time in business

Another factor that banks, credit unions, and online lenders look at before giving an open line of credit to a business is how long they have been in operation. The longer they have been operating, the more likely a lender will see the business as stable. Some lenders may require 2 or 3 years of continuous operation for a credit line, while others only require 6 months. The amount of time in business required by each lender can vary; however, the longer the better. 

Where can you get a business line of credit?

There are a few different options you may want to consider when shopping around for a business line of credit. If you do most of your business banking with a bank or credit union in your area, you could always start there. Banks and credit unions can offer both secured and unsecured business lines of credit with competitive interest rates based on your creditworthiness and revenue. 

Aside from banks and credit unions, you may want to consider checking out the online lending market. There are several online lenders who offer business credit lines to those who qualify. The online lending market has become fiercely competitive in recent years, which has helped borrowers find competitive offers.

Last, there are also SBA lines of credit to consider. Obtaining an SBA line of credit may take longer and require more strict requirements. However, they often come with higher credit limits, lower interest rates, and more generous terms. 

Before applying for a business line of credit, you should create an account with mySMBscore to review business creditworthiness. This will help you identify ways to improve your eligibility which in turn can help you lock in more favorable terms. We can even help match you with lenders that want to earn your business. 

Business line of credit requirements 

If you’re looking for a business line of credit to help finance your business and its operations, you need three basic things. You should have a good to excellent business and personal credit score. Next, lenders are going to want to see that you are bringing in enough revenue to pay back the amount of money you intend to borrow. Last, they may want to see somewhere between 6 months and 3 years of successful business operation.

If you meet these three criteria, your chances of being approved for a business line of credit are significantly higher. While requirements can vary and go beyond these three main things, these are the core of most qualification requirements. 

What is the difference between a secured and unsecured business line of credit?

The main difference between a secured and unsecured business line of credit is that a secured line of credit is backed by collateral. Collateral can include real estate, investments, inventory, and more. Ultimately, the lender will tell you what’s acceptable collateral and what’s not. 

If your business is fairly new or lacking in any qualifications, the lender may require that you secure the line of credit with collateral. Some business owners prefer a secured line of credit as it usually comes with more favorable terms. Since it’s backed by collateral, the risk is reduced for the lender. Therefore, they can loan you money at a better rate. It may also come with a higher credit limit, depending on the value of the collateral. The downside to a secured loan is that in the event you default, you risk losing the collateral and damaging your credit history.

Unsecured business lines of credit are easier to qualify for because they don’t require collateral. Still, you’ll need solid revenue, a good credit score, and an established business to qualify. An unsecured line of credit usually has a lower credit limit and higher rate than a secured line of credit, but it can still help your business. Although a business may not be in danger of losing valuable assets if they default, there can still be much damage done to their credit scores. 

Can I get a line of credit on business?

Yes, business lines of credit are a common and convenient source of financing for many businesses in the United States. The process of obtaining a business line of credit is typically pretty straightforward; however, obtaining an SBA business line of credit can be a bit more complicated and require more time. 

However, obtaining a business line of credit through a bank,  credit union, or online lender can be done in a few business days. As long as you meet the requirements and operate a legitimate business, you should qualify for a business line of credit.

How long does it take to get a business line of credit?

Obtaining a business line of credit through a bank, credit union, or online lender can take as little as 24 hours or a few business days. Obtaining a business line of credit through the SBA can sometimes take up to 2 months. Funding times can vary depending on the lender. If you’re in a time crunch, ask the lender what funding times to expect and how you can expedite the process. 

What credit score do you need for a business line of credit?

The vast majority of lenders will want to see a personal credit score of 680, 700, or sometimes even higher, depending on the credit limit you are hoping to receive. However, there are some lenders out there that specialize in helping borrowers with less-than-perfect credit. Those lenders may work with someone to get them a business line of credit even with a credit score as low as 600 or 580. 

When is it a good idea to get a business line of credit?

If you’re struggling with cash flow, a business line of credit can be a good idea. Businesses with inventory, expensive equipment, or other large expenses may need a line of credit more so than a service-based business or similar. If you’ve researched a business line of credit and feel you can benefit, you should take the next step and ensure your finances are as healthy as possible before applying. At mySMBscore, business owners can check their scores and unlock key financial drivers lenders use, all with no credit impact. Our user-friendly platform allows business owners to monitor credit activity while identifying ways to improve credit scores and gauge the likelihood of qualifying for a line of credit. Through the mySMBscore platform, you can unlock offers for a business line of credit, business term loan, and more. The SMBscore was developed to create an industry-specific, tailor-made risk assessment that can be used to determine the financial stability of small and medium-sized businesses (SMBs). Our score represents the risk of a company having financial difficulties in the next three years. With access to key lending metrics, you can use the knowledge to unlock the best loan offers for your business.

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