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Business Line of Credit Reviews

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  • OnDeck Review

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    OnDeck is a hugely prolific online small business lender and offers two types of business loans: short term loans and revolving lines of credit. Despite potential drawbacks, if you need a fast loan or don’t qualify elsewhere, its hard to beat OnDeck.

  • Lendio Review

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    Lendio is a business financing platform that matches customers to funders. It has a relaxed credit score requirement and there’s no fee for using the service.

  • Fundbox Review

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    Fundbox is a business lender that specializes in offering financial products to small businesses. It provides invoice financing and line of credit. Fundbox does not require a specific credit score or time in business.

  • BlueVine Review

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    BlueVine is an online lending service suited for small businesses. It offers invoice factoring and line of credit. BlueVine is one of the most accessible invoice factors available and a good choice for B2B businesses.

  • Kabbage Review

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    Kabbage is a lender that offers lines of credit to eligible businesses. Kabbage is very transparent and has a fast application process but their fees can get expensive. It is suitable for small businesses but not a good fit for startups.

  • Fundation Review

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    Fundation is a business lender that offers installment loans and lines of credit to qualified borrowers. If you have an established business and don’t want to go through a lengthy loan application process, Fundation is an excellent choice.

  • Rapid Advance Review

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    Rapid Advance is an alternative small business funder offerinf merchant cash advances (MCAs) and short-term business loans to small businesses seeking short-term funding. Rapid has a quick and easy application and approval process. It is still an expensive way to borrow money.

  • Fundwise Capital Review

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    Fundwise Capital is a financial service company that specializes in connecting qualified customers with third-party funders. For new entrepreneurs with good credit, Fundwise can make a significant impact, especially if you qualify for zero interest during your first year. Beware of being upsold on credit counseling.

  • StreetShares Review

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    StreetShares is an online lender that offers business installment loans, lines of credit and contract financing. It has very low borrower requirements. If you have an existing, mature business in need of capital, StreetShares is definitely worth considering.

  • Excel Capital Management Review

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    Excel Capital Management in an online lender offering unsecured business loans, business lines of credit, and other similar financial products. Their rates on unsecured business loans are reasonable but the line of credit fee structure can pile up the costs. Excel is not the most transparent lender

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