Best Line Of Credit Options For Small Businesses

Line Of Credit

A line of credit is one of the most useful tools at a business owner’s disposal. Merchants with a credit line can have short-term funds available within a few days without going through a lengthy application process every time. These funds can be used for many business purposes, such as working capital, business growth, or emergency funds.

Are you looking to gain access to a business average line of credit interest rate? Or do you have a line of credit already but want to know what your other options are? Either way, you’re in luck! We’ve sought out and evaluated the best credit lines currently available to businesses of all sizes — from startups and incubator businesses to stable and established companies.

How We Picked The Best Business Line Of Credit Lenders

We review numerous lenders here at Merchant Maverick, so what you see below is based on our reviews of each company in question.

We consider the following factors when writing our reviews:

  • Rates & Fees: How much will it cost you?
  • Borrower Requirements: Who qualifies? And are the requirements reasonable given the rates?
  • Borrowing Amounts: Can the lender service typical expenses? Is it aiming for small or large businesses?
  • Application Process: How much of a hassle is it to apply, and how quickly can you expect your money?
  • Transparency: Does the lender reveal its rates and fees upfront, or does it try to hide them from prospective customers?
  • User Reviews: What do customers think about the lender? Have there been a lot of complaints filed?

The Best Business Lines Of Credit

Having examined the top providers of business lines of credit and evaluated them according to our criteria, we’re now going to name the lenders whose lines of credit best fit your business. No lender is best for every business, so we’re tailoring our list to fit different business needs.

1. Lendio: Best Business Line Of Credit Overall

Lendio is not an originator of loans. Rather, the company provides a platform for business financing that matches businesses to funders. Just tell Lendio about your business and the type of funding you’re looking for, and Lendio will (hopefully!) take care of the rest.

Lendio works with over 300 different lenders, so it doesn’t have a single set of qualifications for funding that a business must meet. However, it does recommend that a business applying for a revolving line of credit (or another financing product) have at least six months of business history, a personal credit score of at least 560, and at least $50,000 in annual revenue.

2. OnDeck: Best Immediate Line Of Credit

OnDeck is known for offering fixed-term business loans, but it also offers business lines of credit.

Although OnDeck’s rates (which currently range from Average 47.14% APR) can get a little high, OnDeck has a fast application process and easy-to-meet borrower requirements. Most borrowers will have a final decision within 24 hours after applying. If approved, borrowers can start requesting funds from their credit line immediately. That’s why we’ve designated OnDeck as the best choice for businesses needing an immediate unsecured line of credit.

OnDeck’s credit limits currently range from $6,000 to $100,000, with repayment terms of 12 months. Unlike the lender’s short-term loans, which are usually repaid daily, draws from your credit line are repaid weekly. OnDeck does not charge a fee for drawing from your line, but it does charge a $20 maintenance fee, which adds to the overall cost.

3. National Business Capital: Best For Bad Credit

Like Lendio, National Business Capital is a business funding platform that matches you to the lenders best suited to your funding needs from its network of loan originators. There are over 75 lenders in National Business Capital’s lender marketplace.

National Business Capital does not require its line of credit applicants to have a minimum credit score — hence our designation of National Business Capital as the business line of credit lender best suited to those with bad credit. Plus, it only requires three months of business history, making it easier for certain business types to quality. However, you will need at least $120,000 in annual gross sales to qualify. What’s more, larger businesses will be happy to learn of the high potential credit limit of $5 million.

4. Fundbox: Best Start Up Business Line Of Credit

Gone are the days when you had to have a large, well-established business to qualify for a credit line. With Fundbox, you might qualify even if you’ve only been in business for three months. This service offers invoice-backed and traditional lines of credit to eligible businesses.

Fundbox currently offers the most accessible business lines of credit available. To qualify, you must have been using a compatible business account (with one of over 12,000 banking institutions in the US) for at least three months or compatible accounting or invoicing software for two months. You’ll also need a credit score of at least 500, which, hopefully, should be doable for just about everyone.

Fundbox also has one of the fastest applications available. Typically, you can create an account, apply, and get a decision within a few minutes. Borrowers might be eligible for a credit line up to $100,000 with repayment term lengths up to 24 weeks.

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