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Business Line of Credit Reviews

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  • Fundation Review

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    Highlights Business installment loans Working capital loans Business expansion loans Lines of credit Competitive interest rates No prepayment penalty Excellent customer service 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 quickly become one of the top funders in the alternative […]

  • BlueVine Review

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    Highlights Invoice factoring Lines of credit Low entry qualifications No maintenance fees No lockbox fees No long-term contracts Fast time to funding Excellent customer service Overview 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 […]

  • OnDeck Review

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    Highlights Short-term loans Lines of credit Business expansion loans Fast time to funding Proactive customer service Overview OnDeck is a hugely prolific online lender. Founded back in 2007, OnDeck became one of the first lenders to rely primarily on technology to make their lending decisions. With their algorithms, decisions that used to take days or weeks can […]

  • P2Binvestor Review

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    Highlights Asset-backed lines of credit No draw fees No maintenance fees No lockbox fees Fast time to funding Transparent service Overview P2Binvestor, known as P2Bi for short, is a peer-to-peer lender that offers asset-backed lines of credit to qualified B2B businesses. The company was founded in 2012, before opening its doors to customers in 2014. […]

  • Fundbox Review

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    Highlights Invoice financing Lines of credit Young business friendly Low entry qualifications No origination fee No maintenance fee No lock box fee No prepayment penalty Fast time to funding 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 (a […]

  • American Express Merchant Financing Review

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    Highlights Short-term loans Settlement advances Working capital loans Fast application process Low rates and fees No origination fee Excellent customer service Overview Founded in 2011, American Express Merchant Financing is Amex’s contribution to the world of online lending. The company offers term loans with lengths of one- or two-years and settlement advances that are dispersed and repaid […]

  • Kabbage Review

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    Highlights: Lines of credit Fast application process No draw fee No maintenance fees No prepayment penalty Monthly repayments Good customer service Overview Founded in 2009, Kabbage is an online lender that offers lines of credit to eligible businesses. Originally, the company only worked with online retailers, but they’ve expanded their reach to service brick-and-mortar businesses as well. Finding […]

  • Dealstruck Review

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    Note: Dealstruck is no longer originating new loans (though they are continuing to service borrowers who already have a loan). For lenders similar to Dealstruck, take a look at StreetShares or Fundation. Highlights Mid-prime business lender Term loans Working capital loans Asset based lines of credit Inventory lines of credit Competitive rates and fees Excellent customer […]

  • Rapid Advance Review

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    Highlights Merchant cash advances Short term loans Daily repayments Credit rating deemphasized 4 – 18 month term lengths Fast application and processing No collateral Overview Rapid Advance is a Maryland-based non-traditional 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 […]

  • Lending Club Business Loans Review

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    Highlights Business installment loans Business lines of credit Competitive interest rates Monthly repayments No prepayment penalties Great customer service Overview Founded way back in 2006, Lending Club is credited as one of the first companies to kick off the alternative lending movement (non-bank financiers that offer fast, flexible products online). This lender originally offered only personal loans, but […]

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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.

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
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