Best business lines of credit in June 2023

Written by
TJ Porter
Edited by
Helen Wilbers
Reviewed by
Kenneth Chavis IV
Jun 01, 2023
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If you own a business, you’re familiar with the cash flow challenges that a company can face. Even if you’re doing well and making sales, waiting for payments can leave you cash-poor when it comes time to pay the bills.

A business line of credit is a flexible financial tool that lets you deal with unexpected expenses and bridge the gap when waiting for customer payments. You can get them from traditional and online lenders.

We compared many lines of credit based on their availability, interest rates, fees and other features to help you find the best business line of credit for you. Before you apply, make sure you understand how lines of credit for businesses work, how they differ from typical loans and whether they’re the right fit for you.

 
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Best for established businesses

4.4

Bankrate Score
Loan amount
$5k- $250K
Term: 6 - 12 months
Interest rate
Starting at 6.20%
Fastest funding
1 business day

Best secured loan for the bank experience

4.3

Bankrate Score
Loan amount
Starting at $25k
Term: 6 - 18 months
Interest rate
Starting at 8.25%
Fastest funding
1 business day

Best unsecured loan for the bank experience

4.3

Bankrate Score
Loan amount
$10k- $250K
Term: 6 - 18 months
Interest rate
Starting at 9.00%
Fastest funding
1 business day

Best for secured line of credit

4.5

Bankrate Score
Loan amount
$2k- $250K
Term: 6 - 18 months
Interest rate
Varies
Fastest funding
Not disclosed

Best for fast funding

4.5

Bankrate Score
Loan amount
$1k- $150K
Term: 3 - 6 months
Interest rate
Starting at 4.66%
Weekly Fee
Fastest funding
1 business day
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Compare the best business lines of credit in June 2023

LENDER BEST FOR MIN. FICO CREDIT SCORE LOAN AMOUNT MIN. TIME IN BUSINESS
Bluevine (unsecured) Established businesses 625 $5,000 to $250,000 2 years
Bank of America (secured) Secured loan for the bank experience Not disclosed $25,000 and up 2 years
Bank of America (unsecured) Unsecured loan for the bank experience Not disclosed $10,000 to $250,000 2 years
Fundbox (unsecured) Fast funding 600 $1,000 to $250,000 2 years
American Express Business Blueprint™️ (secured)* Secured line of credit 640 $2,000 to $250,000 12 months

A closer look at our top business lines of credit

Bluevine: Best for established businesses

 

Overview: Bluevine is an online business bank that offers business checking and loans. Its starting interest rate is relatively low. Applications are processed in as little as five minutes, and businesses can start drawing on funds as soon as the same day. 

Payments on borrowed funds are made weekly.

Why Bluevine is best for established businesses: If your business is well-established and has good cash flow but weak credit, you may find Bluevine appealing. Bluevine’s minimum credit score is only 625. 

Who Bluevine is good for: Bluevine is best for established companies such as brick-and-mortar retailers or restaurants, large-scale e-businesses or shipping companies that need fast cash flow. 
 

Bank of America: Best for the bank experience

 
Overview: Bank of America offers both secured and unsecured lines of credit that you can renew each year. The lender doesn’t disclose credit requirements, but has high minimums for revenue and time in business, making it best-suited for more established companies. Payments are made monthly. 
 
Bank of America also offers a cash-secured Business Advantage Credit Line with lower qualification requirements but a limit of $50,000.
 
To apply for Bank of America’s secured business line of credit or unsecured Business Advantage Credit Line, you will have to make a phone appointment or visit a branch in person. Following approval, borrowers can receive funds within 24 hours. 
 
Why Bank of America best for the bank experience: It offers every kind of business banking service you could need. Plus, qualification requirements are transparent compared to many other banks.
 
Who Bank of America is good for: Like most bank lenders, Bank of America may be best for businesses that have been operating for years and have consistently high revenue.

Fundbox: Best for fast funding

 

Overview: Fundbox is an online business lender that focuses on speed. It boasts approval times as short as three minutes and funding as soon as the next business day. 

Fundbox does not charge interest on its unsecured lines of credit, instead charging fees on the amount you borrow. It has moderate revenue requirements, but does not let you borrow money for long, with loan terms of only 12 or 24 weeks. You need to be able to handle large weekly payments until you repay the loan.

Why Fundbox is best for fast funding: Get a decision in minutes and funds in your account as soon the next day.

Who Fundbox is good for: Fundbox may fit businesses that regularly need fast cash, like shipping or food industry ventures. Its short terms mean high weekly payments, so a more established business with stable clients would be good for this loan type.

American Express Business Blueprint™️: Best for secured line of credit

Overview: Business Blueprint, formerly Kabbage, is a service from American Express offering lines of credit. This secured line of credit is unusual in that it doesn’t charge interest — which can make comparing it to other lines of credit tricky. Instead, you pay a monthly fee equal to a percentage of your outstanding balance. Those fees can be high, so it’s best to pay down your balance quickly.

Payments on borrowed funds are made monthly.

Why Business Blueprint is best for secured lines of credit: Business Blueprint offers an online application and reasonable qualification requirements. Its flexible term lengths and monthly (rather than weekly or daily) payment schedule may be appealing to business owners. Plus Amex is currently offering an incentive not found with most lines of credit: If you become an American Express® Business Line of Credit customer, you may be eligible to earn $250. Here’s how:

  • Apply for an American Express® Business Line of Credit between 6/1/2023 and 8/31/2023 at 11:59pm ET.
  • If your application is approved, and you add and verify your Funding primary account on or before 8/31/2023, $250 will be deposited into the verified account.*

Who Business Blueprint is good for: This business line of credit may be best for newer or smaller businesses that would otherwise face higher interest rates. Since the fee is a percentage of the outstanding balance, it might also be good for anyone looking for a microloan-like option. 

* All businesses are unique and are subject to approval and review.

 

What is a business line of credit?

A business line of credit is a flexible loan for businesses that works like a credit card. Companies draw money from their credit lines as needed, only paying interest on the portion of money borrowed. For revolving lines of credit, as the borrower repays the amount borrowed, they replenish the funds available. These funds can typically be accessed using a business checking account or mobile app.

How does a business line of credit work?

Business lines of credit are similar to business credit cards. Both allow small businesses to access funds when needs arise instead of the lump sum a business loan would provide. Interest rates on business lines of credit are typically lower than those of a business credit card. 

Lenders set credit limits and interest rates based on factors like how long the current owner has been in place and what the company’s annual revenue is. A line of credit typically requires renewal annually.

The repayment process varies from lender to lender. With some lines, you can make interest-only payments during your draw period. A repayment period of up to five years follows the draw periods. Other lenders treat each draw like an individual term loan — you have a set period to repay each draw you make, which could be weeks or months long.

Business line of credit vs. business credit card

Business lines of credit and business credit cards both let companies draw funds from a pool of credit on an as-needed basis. However, they fit very different roles.

Lines of credit usually have much higher loan amounts and typically have lower interest rates. Borrowing amounts tend to be flexible and can range from a few thousand dollars to hundreds of thousands. Lines of credit can be used however a business sees fit. They’re most useful for when a company needs to pay employees, make payments on the location’s real estate, or purchase equipment or supplies to run the business. They’re also a better choice if you need to carry a balance for a longer period.

Repayment terms for lines of credit for businesses can be generous. Many can go up to five years, and the line of credit can be accessed for the draw period, usually for 12 to 24 months. The amount you can borrow can also replenish when you pay down the balance. 

Credit cards, on the other hand, have no set terms. You need to make at least minimum payments on time, and that could still result in years or decades of debt.     

Credit cards usually have lower credit limits and higher rates, meaning you want to use them for smaller purchases and pay them off quickly. They’re best used when your company needs to do things like pay for travel or make purchases from retailers.

One perk of business credit cards is that you may be able to earn cash back or other rewards when you use one.

Business line of credit vs. business loan

A business line of credit is a type of revolving credit; a business can withdraw funds whenever the need arises, as long as the credit limit isn’t exceeded. Interest then accumulates on the funds that are drawn, usually at a variable rate. Repayments are made daily, weekly or monthly. For these reasons, a business line of credit can be useful for small business owners looking to cover short-term needs.

In contrast, a small business term loan is a lump sum of money given with a fixed interest rate and paid back through fixed monthly payments. Loan payments start immediately, whether a business uses the money right away or not. 

Borrowing limits are often lower on a line of credit than on a business loan, typically ranging from $2,000 to $250,000. However, some lenders offer secured lines of credit, which offer higher limits. Secured lines of credit require that you provide collateral.

Additionally, business loans are typically limited to predetermined uses, like purchasing new equipment, while lines of credit are more flexible, allowing you to use the money for whatever business expense you choose.

Types of lines of credit

There are two main types of business lines of credit: secured and unsecured. 

Secured lines of credit are typically easier to qualify for and have lower interest rates. However, they require collateral that the lender can repossess if you are unable to make your required payments. Often this will be physical property, such as a piece of real estate your business owns or valuable equipment.

Unsecured lines of credit don’t require collateral. That means you can qualify even if you don’t have anything to put up to secure the loan. However, they tend to have stricter eligibility and credit requirements and charge higher interest rates or fees.

 

Pros and cons of lines of credit

There are reasons to get lines of credit for businesses and situations where you might want to look into other borrowing options.
 

Pros:

  • Can generally use lines of credit how you see fit for your business. Some loan options only allow you to put the money to certain purposes, such as equipment or labor/material costs 
  • Replenishes as you use it
  • Only pay interest on what you use 
  • Online lenders tend to approve applications and disburse funds quickly

Cons:

  • Some lenders have strict requirements around time in business, minimum credit scores or annual revenue 
  • Some loans use collateral, so you could lose assets if you default on the loan 
  • Unsecured loans could mean being taken to court to recoup losses, and can have higher fees 
  • You still might pay a maintenance fee if you do not use the line of credit, as well as annual renewal fees

Who should get a line of credit?

Your specific business needs will determine if a business line of credit is right for you. A line of credit is a good fit for businesses that:

  • Are looking for extra cash flow.
  • Don't have a specific purpose in mind.
  • Experience seasonal fluctuations.
  • Have increased short-term expenses, like replacing inventory or paying for unexpected costs.
  • Have customers who take longer than 30 days to pay.
  • Want easy access to extra funds.

Business lines of credit offer flexibility and usually have fewer requirements than business loans.

However, keep in mind that lines of credit often come with variable interest rates, meaning that your initial rate may rise over the course of your repayment. 

There are also usually fees that can quickly add up, costing you more than you may have initially expected. These lines of credit can also be much harder to qualify for. Lenders often restrict the amount that you can borrow, generally allowing smaller amounts than the typical business loan.

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Bankrate Insight

If the line of credit you’re considering presents the following red flags, consider going with a different option.
 
  • Vague wording around fees and other aspects of the loan agreement
  • An unusually short draw period
  • Prepayment fees preventing you from repaying your balance early
  • Renewal wording is vague, or it will be difficult to renew the line of credit 
  • The amount you can borrow is much smaller than you need, even if you repay the borrowed amount

Alternatives to lines of credit

If you aren’t sure if a business line of credit is for you, alternative funding options include:
 

Where to get a line of credit

You can find lines of credit with both traditional and online lenders.

Traditional banks or credit unions: At these lenders, you can talk to an employee face-to-face and get all your questions answered. However, these places have more strict requirements, like a long time in business, higher annual revenue or credit score. These may offer more traditional secured loan types, which can lead to potentially lower rates. 

Online banks/financial services companies: These are online lenders that work entirely digitally. You often manage your loan through apps or online portals. They can offer more convenience and have more relaxed requirements. They just don’t offer the face-to-face experience some people prefer.  

To choose the lender that’s right for you, ask how your business measures up against its requirements. For instance, if you’re a newer business, have lower credit or have smaller annual revenue, online lenders may have be best for your situation. It’s also important to assess if you value an office right up the road or an online-only experience. 

FAQs about business lines of credit

Methodology

To choose the best business lines of credit, we ensured all loans featured are broadly available across the United States. We then considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, whether the loans are secured or unsecured, minimum annual revenue and fees.
 
Additionally, we use a 22-point scale to evaluate lenders in five key areas: Accessibility, affordability, transparency, customer service and flexibility. Based on the results, lenders are given a rating between 1 and 5:
 
  • 4.5 or higher: Outstanding
  • 4 to 4.5: Excellent
  • 3.5 to 4: Good
  • 3.5 and under: Average

*Terms and Conditions:

This offer is provided by American Express® Business Line of Credit (“we”, “us” or “our”). American Express® Business Line of Credit loans are issued by American Express National Bank (AENB). To be eligible to earn the $250 associated with this offer, you must 1) apply and be approved for a line of credit between 6/1/2022 and 8/31/2023 at 11:59pm ET and 2) add and verify your designated business bank account (hereafter defined as “Funding primary account”) on or before 8/31/2023 at 11:59pm ET. AENB will deposit $250 into the Funding primary account you've successfully linked to American Express® Business Line of Credit within 30 calendar days from the date the account is verified. Limit one offer per new American Express® Business Line of Credit account. This offer (i) is not available to existing American Express® Business Line of Credit customers, (ii) is non-transferable, and (iii) cannot be combined with any other offer except as permitted by American Express. We reserve the right to modify or revoke this offer at any time. You may not receive the offer, if we determine in our sole discretion that your account is not in good standing, has a disconnected bank account, and/or you have engaged in abuse, misuse, fraudulent activity, or gaming in connection with the offer in any way or that you intend to do so. We may also cancel your American Express® Business Line of Credit account and other accounts you may have with us. The offer may be taxable income to you and may be reported on IRS Form 1099. You are responsible for any federal or state taxes resulting from the offer. Please consult your tax advisor if you have questions about the tax treatment of the offer. If you have any questions regarding this offer, please call 1 888986 8263 Monday – Friday 8 A.M. to 9 P.M. EST.