Advertiser Disclosure
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Business Line of Credit Reviews

buyers guide
Sort By
  • Lendio Review

    Read Review Visit Site

    Pros Relaxed credit score requirements 2-7 days time to funding Cons Opaque terms and fees Relatively slower time to funding compare to many alternative lenders Overview Lendio is a business financing platform that matches customers to funders. While Lendio does not originate loans directly, its network of over 75 business funders — including big names […]

  • OnDeck Review

    Read Review Visit Site

    Pros Relaxed borrower qualifications Relaxed credit score requirements Competitive terms and fees Short application process Excellent customer support Prepayment discounts Cons Potentially high factor rates Opaque advertising Overview OnDeck is a hugely prolific online small business lender. Founded back in 2007, OnDeck became one of the first lenders to rely primarily on technology to make their […]

  • Fundbox Review

    Read Review Visit Site

    Pros Relaxed borrower qualifications Short application process No credit score requirements Good customer support Cons Potentially high terms and fees Unsuited for large businesses Overview Fundbox is a business lender that specializes in offering financial products to small businesses. Founded in 2013, the company originally offered an invoice financing product for small businesses called Fundbox Credit. […]

  • BlueVine Review

    Read Review Visit Site

    BlueVine, an online lending service, was founded in 2013 after the founder watched his father, a physical therapist, struggle with inconsistent cash flow due to slow payouts by insurance companies. It shouldn't come as a surprise, then, that the company offers a number of services intended to help merchants overcome cash flow problems.

  • Kabbage Review

    Read Review Visit Site

    Pros Suited for small businesses Relaxed borrower qualifications No additional fees Fast application process Cons Unsuited for startups Potentially high APRs Overview Founded in 2009, Kabbage is a lender that offers lines of credit to eligible businesses. Finding a lender more convenient than Kabbage would be difficult. In most cases, business owners can apply, get a […]

  • Fundation Review

    Read Review Visit Site

    Pros Competitive terms and fees Few additional fees Typical time to funding: 2 – 7 days No prepayment penalty Excellent customer support Cons Stringent borrower qualifications Lengthy application process Unsuited for startups Overview Fundation is a business lender that offers installment loans and lines of credit to qualified borrowers. The company was founded in 2011 and has […]

  • Rapid Advance Review

    Read Review Apply Now

    Pros Low factor rates Low origination fees Cons Some additional fees Limited support materials Overview Rapid Advance is a Maryland-based alternative small business funder. It offers merchant cash advances (MCAs) and short-term business loans to small businesses seeking short-term funding. Unlike many of its competitors, it offers a number of variations on the typical MCA, leading […]

  • Fundwise Capital Review

    Read Review Qualify Now

    Pros No credit rating requirements Good public reputation Cons Opaque terms and fees Some additional fees Overview Fundwise Capital is a Utah-based financial service company that specializes in helping new businesses find funding. Fundwise does not directly lend to businesses. Instead, they’ll attempt to connect qualified customers with third-party funders. Fundwise makes their money through a […]

  • StreetShares Review

    Read Review Compare

    Pros Relaxed borrower qualifications Competitive terms and fees Easy application process Typical time to funding: 2 – 7 days No prepayment penalties Excellent customer service Cons Unsuited for large businesses Overview StreetShares is an online lender that offers business installment loans, lines of credit and, most recently, contract financing (a service similar to invoice factoring). This loan service was […]

  • Excel Capital Management Review

    Read Review Request Info

    Pros Relaxed loan qualifications Suited for new businesses Suited for small businesses Cons Opaque fees Overview Excel Capital Management in an online lender based in New York City offering unsecured business loans, business lines of credit, and other similar financial products. A prospective borrower will find a huge amount of options with Excel, making it […]

What is a Line of Credit?

A line of credit is a business financing arrangement between a funder and a business. Much like a credit card, a line of credit provides businesses with a maximum borrowing amount. The business can draw up to the maximum amount at any time, and it only pays interest and fees on the amount borrowed.

Credit lines are often called revolving lines of credit because, when your outstanding debt is paid down, you will be able to borrow from the full amount again.

For example, you might have a line of credit with a maximum limit of $100,000. You borrow $10,000 and have a repayment term length of six months. At this point, you have access to $90,000. In two months, you borrow another $30,000, so your credit line is down to $60,000 and you have $40,000 in debt (minus what you have already paid). When you repay the money you owe, you will have access to the full $100,000 again.

Some lines of credit are not backed by collateral (or, at least, not specific collateral). However, a common type of line of credit is an asset-backed line of credit. These lines are backed by forms of business revenue such as invoices, inventory, and monthly recurring revenue. The maximum available credit normally corresponds to the value of your assets. Because your loan is backed by collateral, these types of credit lines normally carry lower fees than credit lines that aren’t backed by collateral.

Lines of credit are available from a number of different sources, including online lenders and banks. Check out our article to find the best business line of credit provider for your enterprise. 

Who Should Use a Line of Credit?

Because you do not need to reapply every time you need funds, a line of credit can be useful for a number of scenarios. If your business is in any of these situations, you may want to consider getting a credit line:

  • Your business has inconsistent cash flow
  • You frequently need cash to capitalize on unexpected opportunities
  • You need additional capital, but you don’t know exactly how much
  • You want a financial safety net just in case the need arises