The Best Lines Of Credit For Small Businesses In 2020
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A line of credit is one of the most useful tools at a business owner’s disposal. Merchants with a line of credit 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 reasons, such as working capital, business growth, or emergency funds.
Are you looking to gain access to a line of credit? Or do you have a line of credit already but want to know what your other options are? You’re in luck! We’ve searched out and evaluated the best credit lines currently available to businesses of all sizes — from startups and incubator businesses to stable and established operations.
Learn More About Our Top Picks
| Company | Summary | Next Steps |
|---|---|---|
 | Founded in 2013, BlueVine offers three services to solve cash flow problems: business loans, lines of credit, and invoice factoring. You have a fair chance at qualifying for a line of credit from BlueVine if you've been in business at least six months, have a credit score of at least 600, and make $120,000 or more per year. | |
 | OnDeck is known for offering fixed-term business loans, but it also offers business lines of credit. Although OnDeck's rates can get a little high, OnDeck has a fast application process and easy-to-meet borrower requirements. | |
 | Kabbage offers one of the most popular and well-known lines of credit available. This service is known for having a fast, easy application process and for being a convenient way to access funds. | |
 | 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. | |
 | StreetShares is a small business lender that offers many financial products to small businesses, including lines of credit. This lender has relatively low borrower requirements -- you might qualify if you have at least 12 months in business, make at least $100,000 annually, and have fair credit. |
Other Featured Options:
- Fundation: Fundation is an online lender that offers lines of credit and term loans to eligible businesses. Because of the employee requirement, Fundation might be a little more difficult to qualify for, but eligible borrowers will benefit from favorable terms and fees. Fundation offers credit lines between $20,000 and $150,000.
Read more below to learn why we chose these options.
How We Picked The Best Lines Of Credit
We review a lot of lenders here at Merchant Maverick, so what you see below is based on our reviews of each company in question.
We take the following into considering 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 up front, or does it try to hide them from prospective customers?
- User Reviews: What do customers have to say about the lender? Have there been numerous complaints filed?
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1. BlueVine
BlueVine
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Founded in 2013, BlueVine offers three services to solve cash flow problems: business loans, lines of credit, and invoice factoring.
You have a fair chance at qualifying for a line of credit from BlueVine if you’ve been in business at least six months, have a credit score of at least 600, and make $120,000 or more per year. Borrowers might be eligible for a credit line up to $250,000 with repayment terms of six months. (BlueVine also offers a line of credit with a 12-month repayment term, but the borrower requirements are more difficult to meet.) Or, if you invoice your customers, invoice factoring might be worth your consideration — BlueVine doesn’t require monthly minimums, factoring of specific invoices, or long-term contracts. For one-time funding needs, BlueVine also offers business term loans.
The application process for BlueVine is fast and straightforward. In most cases, you can expect to have a decision regarding your application within 24 hours. Unlike some other services, you will not have to submit a lot of documentation to be considered for a credit line.
As you might expect, larger organizations will want to give BlueVine a pass. With APRs that range from 15% – 78%, well-established businesses might be able to find lower rates elsewhere. However, smaller businesses will find this service worth considering.
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2. OnDeck
OnDeck
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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 19.9% - 61.9% 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.
OnDeck’s credit lines currently range from $6,000 to $100,000, with repayment terms of six 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.
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3. Kabbage
Kabbage
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Kabbage offers one of the most popular and well-known lines of credit available. This service is known for having a fast, easy application process and for being a convenient way to access funds.
Like Fundbox, Kabbage’s application process is completely automated. Most potential borrowers will be able to make an account, fill out an application, and check their eligibility within a few minutes. If you are approved (and you like your rates), you can start requesting funds from your line immediately. With relatively low revenue and time in business requirements, a lot of businesses will qualify for a credit line from Kabbage. This lender does not enforce a specific minimum credit score, but it will run a check on your credit before giving you a final decision on your eligibility, rates, and fees. You’ll also have some flexibility in choosing between six, 12, and 18 month draw periods.
Some merchants might also like that it’s very easy to request funds from your Kabbage account. In addition to having a mobile app, Kabbage offers a spending card, called the Kabbage Card, free of charge to all account holders. With a Kabbage Card, you can pay for goods and services right from your credit line — you don’t have to wait for Kabbage to send the funds to your bank account.
On the other hand, with APRs that range from approximately 24% - 99%, Kabbage lines of credit have the potential to be the most expensive on this list. However, your rates will depend on your creditworthiness, the strength of your financials, and some other factors. If you have an especially strong business, you might be eligible for lower rates. Regardless of the potentially high rates, Kabbage is worth checking out if you need fast access to a convenient line of credit.
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4. Fundbox
Fundbox
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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.
Certainly, Fundbox offers a useful service, but it’s not right for all businesses. The fees are higher than those of services that cater to more established businesses, so if you have been in business for a while and have strong financials, you might be able to find better rates elsewhere. Nonetheless, Fundbox is an invaluable source of financing for small businesses in need of short-term working capital.
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5. StreetShares
StreetShares
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StreetShares is a small business lender that offers many financial products to small businesses, including lines of credit. This lender has relatively low borrower requirements — you might qualify if you have at least 12 months in business, make at least $100,000 annually, and have fair credit.
StreetShares’ credit lines have a limit of $250,000, but the amount you will personally be offered will be about 20% of your annual revenue. StreetShares’ APRs range from 7% - 39.99%, which is competitive with many other online lines of credit. Draws from your line have a maximum repayment length of 36 months, which is the longest draw term length on this list.
The application process for StreetShares generally takes less than a week. Naturally, once you have access to a credit line, you can draw at any time without going through an application. That said, StreetShares will occasionally request to see your financials if you haven’t drawn from your line in a while.
StreetShares also offers traditional business term loans.
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6. Fundation
Fundation
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Fundation is an online lender that offers lines of credit and term loans to eligible businesses.
Because of the employee requirement, Fundation might be a little more difficult to qualify for, but eligible borrowers will benefit from favorable terms and fees. Fundation offers credit lines between $20,000 and $150,000. Draws have repayment terms of 18 months, which is longer than most other lenders on this list. Additionally, with APRs that range from 7.99% – 29.99%, Fundation’s rates are lower than those of most of the above lenders.
The application process to gain access to a line of credit is short, and most applicants can expect a decision in fewer than seven days. Between the low rates and the fast application process, this is, without a doubt, a lender worth checking out if your business isn’t yet big enough to get a line of credit from a bank or the SBA.
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When You Should Get A Business Line Of Credit
Business lines of credit aren’t necessarily the cheapest or easiest way to borrow money, so why would you want one?
The most significant advantage offered by a line of credit is flexibility. Here’s Pegah Saeedi of BlueVine on her company’s lines of credit:
A BlueVine Line of Credit is a great tool for businesses when they need quick access to revolving credit. It allows for a one time use or multiple uses of the line, depending on what their business need is at the time. A BlueVine Line of Credit can help when you have unexpected cash flow gaps, and can also be used for expansion, new projects, new equipment, and more.
Aditya Narula, head of the customer service department at Kabbage, has a similar take:
Lines of credit give small business owners greater control over their cash flow. With the flexibility to take only what they need and instant deposits, small business owners can rely on their Kabbage line of credit to help with rent, payroll, inventory and invest in their business. Flexible funding is especially critical to growth and strategic business management. To capitalize on opportunities, small business owners need to be able to access capital quickly – they can’t afford to wait weeks or months for loan approvals. So, a line of credit is important to staying ahead.
A business line of credit allows you to draw money as you need it, rather than taking out a large lump sum and immediately paying back interest on it. It can also serve as a rainy day fund for unexpected expenses, granting your business some additional security.
And best of all, they’re (usually) reusable!
“Due to the revolving nature of our line of credit,” says Saeedi, “the credit line will replenish as you make payments.”
You won’t find too many other types of lending that allow that other than credit cards, which are, you guessed it, a form of revolving credit.
How To Choose The Right Line Of Credit
Choosing the right line of credit means taking stock of your needs as a company as well as understanding what you actually qualify for.
Consider the following when you’re choosing a lender:
- Cost: Quite simply, can you afford to service the debt you’re taking on? Are cheaper options available?
- Terms: How long do you have between payments? How long will your line of credit be available?
- Qualifications: How long does the lender expect you to have been in business? What’s their minimum credit rating? Minimum revenue?
- Reputation: Does the lender have mostly positive or negative reviews? Do you see common themes between negative reviews?
You’ll also want to consider how quickly you’ll need the funds.
Saeedi, again:
A business owner should consider their eligibility as well as the lender when looking for a line of credit to see what would work best for their situation. Traditional lenders, like banks, can take weeks and sometimes months to get an approval, and therefore aren’t a good fit if you want access to quick and flexible funding.
On the other hand, if you have good credit and can spare the time, you’ll usually get better rates with a bank.
Final Thoughts
Between the options above, most business owners will be able to find financing to suit their needs. All these lines of credit have relatively quick and easy applications and will ensure that you have the capital you need to weather rough patches or grow your business.
Note that many banks and credit unions offer business financing, such as lines of credit. When it comes to business financing, banks and credit unions generally offer the best rates and fees. On the other hand, they are usually difficult to qualify for. However, if you have good credit and a stable business generating consistent revenue, you might have a chance at qualifying. Head over to the Best Banks For Small Business Loans to learn about our favorite banks for business financing.
If you don’t yet qualify, don’t forget that a business credit card fulfills many of the same needs as a line of credit. With a business credit card, you will have immediate access to an additional source of funds and can defer payments to a more convenient time. Additionally, business credit cards offer grace periods, signup bonuses, and savings via rewards, which are not provided by business lines of credit. Just be aware that credit cards typically have higher interest rates than lines of credit. Check out our favorite business credit cards to learn about the cards that might be right for your business.
A Last Look At Our Top Picks
- BlueVine
Summary - Founded in 2013, BlueVine offers three services to solve cash flow problems: business loans, lines of credit, and invoice factoring. You have a fair chance at qualifying for a line of credit from BlueVine if you've been in business at least six months, have a credit score of at least 600, and make $120,000 or more per year. - OnDeck
Summary - OnDeck is known for offering fixed-term business loans, but it also offers business lines of credit. Although OnDeck's rates can get a little high, OnDeck has a fast application process and easy-to-meet borrower requirements. - Kabbage
Summary - Kabbage offers one of the most popular and well-known lines of credit available. This service is known for having a fast, easy application process and for being a convenient way to access funds. - Fundbox
Summary - 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. - StreetShares
Summary - StreetShares is a small business lender that offers many financial products to small businesses, including lines of credit. This lender has relatively low borrower requirements -- you might qualify if you have at least 12 months in business, make at least $100,000 annually, and have fair credit. - Fundation
Summary - Fundation is an online lender that offers lines of credit and term loans to eligible businesses. Because of the employee requirement, Fundation might be a little more difficult to qualify for, but eligible borrowers will benefit from favorable terms and fees. Fundation offers credit lines between $20,000 and $150,000.
Bianca Crouse
Bianca Crouse has been writing about business loans and finance for three years. In addition to Merchant Maverick, she has appeared in Startup Nation and Business.com, among others. She has a BA in English from George Fox University and lives in the Pacific Northwest.
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Very interesting. This information is very helpful, are you in the business; What is your core business?
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