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Published: Jun 28, 2023 20 min read
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As your startup business continues to grow, so will your need to secure short-term funding. A startup business line of credit is a great way to cover expenses, such as payroll, accounts receivable and many other daily operating costs.

Your business's financial situation will vary greatly from those of other startups looking for funding, so it's important to find a lender that's right for you. We’ve identified reputable lenders that may align with your needs to help you find success and teach you what a business line of credit is. Read on to find the best business lines of credit for startups.

Our Top Picks for Best Startup Business Line of Credit

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Best Startup Business Line of Credit Reviews

  • Credit limits up to $250,000
  • Competitive interest rates
  • Quick application processing times
  • High minimum eligibility requirements
  • $15 same-day wire transfer fees
  • Not available in every state

Why we chose it: Bluevine provides applicants with a superior experience and high credit limits of up to $250,000. Its competitive interest rates, efficient application process and quick funding times make Bluevine a viable option for more established startup companies.

The costs of using Bluevine will consist largely of these interest rates, as it does not charge setup, subscription or maintenance fees.

Applicants will experience loan terms with repayment periods ranging from six to 12 months.

Bluevine may provide high credit limits, but it's because of its stiff minimum requirements for eligibility. Applicants must meet the following requirements:

  • Have a FICO score over 625
  • Have been in business for more than two years
  • Be incorporated in the United States
  • Be generating monthly revenue of at least $40,000

Those that meet these requirements will have access to credit lines up to $250,000. The Bluevine application process is quite intuitive and can be completed through its online portal. You'll need basic information about you and your business, three months of bank statements and a business that is in good standing. Decisions on your eligibility can be granted in as fast as five minutes, with access to funds 24 hours after approval. Businesses in Nevada, North Dakota and South Dakota are not eligible.

Other highlights:

  • A user-friendly mobile and desktop platform that provides an intuitive experience
  • A Better Business Bureau rating of A+
  • Access to a credit line that replenishes as you make payments

  • Approval for credit scores as low as 560
  • Loan amounts up to $500,000
  • Access to over 75 lenders
  • Not a direct lender
  • Large range of term information depending on the lender

Why we chose it: Lendio makes it easy for startup businesses to secure a valuable line of credit while they're still building toward profitability. Lendio can match you with more than 75 lending institutions to provide you with the most competitive rates and credit limits based on your situation.

Because Lendio is a loan aggregator and doesn't offer loans directly, the specific fees you may encounter will vary depending on the lender.

Applicants have access to a large range of loan terms depending on their needs. Lendio can match you with lenders offering repayment terms as short as six months or as long as 30 years.

The eligibility requirements for Lendio are as flexible as its rates and loan terms. Applicants may receive approval with a credit score as low as 560, but most of Lendio's partners require a score over 640. Businesses must also have been open for at least six months but will receive better rates if they have been in business for at least two years. In relation to annual revenue, Lendio requires a minimum of $50,000. However, it advises a revenue closer to $100,000 to secure better terms.

As with many other features offered by Lendio, applicants can secure flexible loan amounts ranging from $1,000 to $500,000.

Lendio makes the application process easy by providing a simple questionnaire on its website. On average, it takes about 15 minutes to complete. By providing basic information about your business and supporting documents, such as bank statements and identification, you can gain access to funding within two weeks of approval.

Other highlights:

  • Access to many other loan options besides a line of credit
  • Online review site rating of 4.8 out of five stars across 20,000 reviews
  • Over $12 billion in loans granted through Lendio

  • Approval for credit scores as low as 625
  • Intuitive SMART Box tool specifying loan terms
  • Lines of credit up to $100,000
  • High-interest rates and maintenance fees
  • Rigid repayment terms of 12 months
  • Not available in Nevada, North Dakota, or South Dakota

Why we chose it: OnDeck provides reasonable lines of credit to businesses that have yet to build strong credit. With customizable weekly payments, affordable rates and a simple application process, OnDeck is an option for those just starting out.

Although OnDeck is excellent for those businesses with subpar credit ratings, its lower eligibility requirements usually translate into higher interest rates. OnDeck also charges a one-time origination fee and a monthly maintenance cost of $20.

OnDeck uses its proprietary SMART Box Capital Comparison Tool to provide borrowers with simple information regarding their loan terms. Repayment terms for each loan are in 12-month periods that reset after each withdrawal.

The base requirements to secure a loan from OnDeck include the following:

  • A personal FICO score over 625
  • Annual business revenue over $100,000
  • In business at least one year

Companies that meet these requirements will have access to loan amounts ranging from $6,000 to $100,000.

The application process is quick, and you can expect to hear back with offers within one business day. You'll need to support your application with information and documents, such as tax identification numbers, gross annual revenue and three months of bank statements. OnDeck does not lend in Nevada, North Dakota or South Dakota.

Other highlights:

  • Over $15 billion in loans granted through OnDeck
  • A Better Business Bureau rating of A+
  • Online review site rating of 4.7 out of five stars across nearly 4,000 reviews

  • Minimum of six months in business for approval
  • Credit limits up to $150,000
  • User-friendly mobile application available on Apple App Store and Google Play Store
  • Short repayment periods of 12 and 24 weeks
  • Expensive interest rates

Why we chose it: Companies with a limited business history can find affordable funding through Fundbox. After six months in business, you can access quick and customizable loan terms after completing its three-minute application process.

Fundbox provides you with a transparent fee structure, allowing you to calculate exactly how much you'll be paying per week according to the terms of your loan. Fundbox offers rates as low as 10%, with no additional or hidden fees. Borrowers have access to repayment periods of 12 or 24 weeks, with weekly payments throughout.

Entrepreneurs can secure a line of credit from Fundbox with the minimum requirements:

  • In business six months
  • Personal FICO score over 600
  • Over $100,000 in annual revenue
  • Based in the United States

Companies that meet these requirements have access to a line of credit of up to $150,000.

You can complete the Fundbox application process in three minutes if you have all the required information and documents. Funds are available one business day after approval.

Other highlights:

  • Over $3 billion in loans secured through Fundbox
  • Online review site rating of 4.6 out of five stars across more than 3,500 reviews
  • Better Business Bureau rating of A+

  • Credit limit up to $150,000
  • Flexible term lengths of 6, 12 and 18 months
  • Monthly revenue requirement of only $3,000
  • Complicated fee structure
  • Must have been in business for at least one year

Why we chose it: American Express Business Line of Credit provides secured lines of credit to businesses at affordable costs and with reasonable minimum requirements. Its flexible plans, straightforward fees and quick application process make it an option for many small businesses.

With no application, maintenance or origination fees, American Express provides three repayment term options of six, 12 or 18 months.

Entrepreneurs can apply for a line of credit from American Express as long as they meet the minimum requirements:

  • At least 18 years old
  • FICO score over 640
  • Monthly revenue of at least $3,000
  • In business at least one year

Those that meet these requirements may have access to credit limits of up to $150,000. The application process takes only a few minutes through its online application portal. The required documents for completion include bank statements, personal information and a tax identification number.

Secured lines of credit will typically have more favorable terms than their unsecured counterparts. A secured line of credit is when a business is able to provide non-real estate assets as collateral, making it more creditworthy.

Other highlights:

  • Available in all 50 states
  • No prepayment penalties
  • Easy integration of all American Express accounts, including its high-yield savings accounts

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Other business lines of credit for startups we considered

Rapid Finance

  • Same-day funding
  • Relaxed eligibility requirements
  • Expensive interest rates

Rapid Finance provides competitive lines of credit available on the same day you send the application. They also offer relaxed eligibility requirements, including a minimum credit score of 550 and no specified time-in-business requirement. Rapid Finance also provides lines of credit up to $250,000.

Why Rapid Finance wasn’t chosen: Although Rapid Finance provides quick and easy funding, access to higher credit limits at favorable rates is only available to those with high monthly sales and credit scores. Therefore, this may not be an option for young or hard-pressed startups.

PNC Bank

  • Up to $3 million in secured loans
  • Competitive interest rates
  • Simple application process
  • Confusing fee structure
  • Stringent eligibility requirements

Small businesses can obtain lines of credit from PNC Bank ranging from $20,000 to $100,000 if unsecured and up to $3 million in secured loans. PNC also provides competitive interest rates depending on your specific situation, making the application process as easy as possible.

Why PNC Bank wasn’t chosen: Although PNC offers impressive credit limits at affordable prices, it's more focused on established businesses and therefore has tight minimum requirements for applying.

National Business Capital

  • Credit limits up to $5 million
  • Low credit score requirement of 600
  • Minimum requirement of $120,000 in annual revenue
  • Complicated application process

National Business Capital provides flexible and affordable lines of credit of up to $5 million. It has a 90% approval rate, and you can meet its minimum requirements with only a 600 FICO score and one year of business. However, they do require $120,000 in annual revenue.

Why National Business Capital wasn’t chosen: Although National Business Capital offers high credit maximums, those are typically reserved for the most established applicants. In addition to struggling with its complicated application process, many startups looking for capital have not yet crossed the threshold of $120,000 in annual revenue.

Business Line of Credit for Startups Guide

What is a business line of credit?

A business line of credit allows a business to borrow money from a qualified lender at rates proportional to the business's credit history. They function differently from small-business loans and are meant to be used for short-term funding, whereas business loans may be used to cover the cost of large purchases, often with longer loan terms. If you're looking to fund a large investment for your business, you should look into the best small business loans.

Business lines of credit are also different from working capital loans. Whereas business lines of credit are revolving, a working capital loan is typically received as one lump sum to cover short-term operating costs. The best working capital loans are another tool you can use to manage daily operating expenses effectively.

How do business lines of credit work?

Business lines of credit function similarly to credit cards. Businesses enter into an agreement with a lender to loan money to be repaid over a specific period at a predetermined interest rate. Just like with your credit card, you can only borrow so much at one time, at which point you have to pay down your debt before you can borrow more. A line of credit is revolving, meaning you'll have access to more credit as you pay back the amount you owe.

For example, if Company A has a line of credit from Big Bank Lenders with a limit of $100,000, they can borrow any amount at any time that doesn’t exceed $100,000 cumulatively. If the interest rate is calculated to be 10% APR, with a repayment period of 12 months, you must repay the amount you borrow before the end of 12 months with an additional 10% to avoid a penalty.

Although a business line of credit may function similarly to a credit card, it's not exactly a credit card. If you think a credit card would benefit your business, do your research on the best business credit cards before making a decision.

How to get a business line of credit for your startup

Finding a business line of credit for your startup requires a lot more than having a good credit score. Finding lenders that are a good fit for your business's credit situation can be difficult, so your research must be diligent. Understanding all the necessary steps to find and establish a quality line of credit will help you make the best decision for your business. You may also want to consider the best unsecured business loans for your startup business.

Check your business credit score

A good credit score is one of the most important metrics line-of-credit lenders will look for before extending credit to your company. That single score encompasses many of the factors the lender would otherwise assess to determine the financial security or risk of lending to you.

You can visit any number of free credit reporting companies. It may also be useful to learn how to improve your credit score to receive ideal credit lines in the future.

Research the business line of credit lenders

Although we've done some of the legwork for you, it's up to you to dig deeper into the specifics of each lender. Details can vary greatly, and you must scrutinize everything that could end up being counterproductive to your business.

Look deeper into the fees, levels of customer service and customer reviews of different lenders. Also, make sure you look at other lenders we may not have mentioned. While the line-of-credit lenders we have mentioned apply to all startup businesses, some may work specifically with businesses organized in a particular way. For example, if your business is set up as a limited liability company (LLC), you may want to research the best LLC loans.

Get pre-qualification offers

When a lender tells you you're pre-qualified for a line of credit, this means they have likely run your credit score and determined that you meet the criteria for a credit line. You may have seen such offers from your banking institutions, which are familiar with your financial standing and willing to extend a line of credit to you. In most situations, you will still have to formally apply to actually receive a line of credit.

Pre-qualification offers help you determine whether you qualify for a line of credit without going through the whole application process.

Review interest rates and loan terms

The interest rates and loan terms of a line of credit are critical elements to consider. The interest rates will determine how costly the loan amounts will be. If you sign up for a line of credit with extremely high interest rates, you may be unable to repay it, negatively impacting your company instead of helping it. Finding loan terms with repayment periods compatible with your financial timeline is equally important.

A business line of credit is typically established as a long-term relationship. If you're in a position where you need money fast, you may want to consider the best fast business loans for quick cash.

Choose your preferred lender and submit documentation with your application

Once you've conducted some research and selected a lender, you must complete the application. In most applications, you provide personal and business information with documentation to support it. Documentation can include tax identification numbers, bank statements and proof of revenue.

Many lenders will require you to have a devoted business bank account to receive these funds, so you'll want to be sure you know how to open a business bank account.

Wait for approval and funding

After you have submitted the required paperwork, there will be a short waiting period until you hear back from the lender. In most cases, you'll hear back within a few days, but it's not uncommon for a lender to take a week or two before they give you approval.

Once approved, you'll be able to access the funds within a week and, in most cases, within 24 hours.

Where to get a startup business line of credit

Over the last decade, there has been a rise in fintech companies that provide business lines of credit online. They often offer rates and loan terms that are competitive with those of traditional lenders.

Traditional lenders

Traditional lenders consist of legacy banking institutions that require you to visit a bank branch to complete paperwork. Although you have the opportunity for a face-to-face experience with personalized customer service, traditional lenders generally have much slower processing times and outdated mobile interfaces. These lenders are typically more suitable for larger companies that require larger lines of credit with a more personal experience.

Online lenders

Online lenders are platforms operating entirely online, typically with much quicker turnaround times for your application. They incorporate proprietary data models to help them determine creditworthiness and can calculate rates more efficiently. Online lenders will also provide a more user-friendly experience consisting of intuitive mobile and desktop platforms. These are more suitable for smaller companies that need credit fast or require a smaller line of credit.

Business Lines of Credit for Startups FAQs

How much business line of credit can I get?

How much your business can borrow with a line of credit completely depends on your creditworthiness and financial stability. Credit limits will be higher for those with higher credit scores, greater annual revenues and longer credit histories.

What is a business line of credit used for?

Business lines of credit are most commonly used for short-term funding. This can include things such as covering payroll, accounts receivable and other operational expenses. It's important to note that a business line of credit cannot be used to pay for long-term investments, such as real estate or equipment.

How much line of credit should a business have?

The amount of credit a business should have is calculated on a business-to-business basis. By taking into account your short-term needs, such as accounts receivable, inventory days and accounts payable, you can determine how much credit you need. It's important to determine these calculations accurately: Asking for too much money may result in your application being denied, and asking for too little may result in having to ask for more eventually.

How We Chose the Best Startup Business Lines of Credit

The methodology behind how we chose the best startup lines of credit includes these factors:

  • Interest rates and additional fees charged by the lenders
  • The flexibility of loan terms that borrowers can choose from
  • Eligibility requirements borrowers must meet to receive a line of credit
  • Maximum credit limits provided by the lenders
  • Complexity and efficiency of the application process

Summary of Money’s Best Startup Business Lines of Credit Review