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Business Line of Credit Reviews

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  • Newtek Small Business Finance Review

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    Newtek is a direct lender that provides personalized solutions to fit the specific needs of each small business that seeks financing. Newtek is ideal for small businesses but be wary of their opaque rates and terms.

  • P2Binvestor Review

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    P2Binvestor is a peer-to-peer lender that offers asset-backed lines of credit to qualified B2B businesses. The initial application is fast and easy, and the company is transparent and communicative. They are competitively priced and solves problems commonly experienced by mid-sized B2B businesses.

  • PNC Bank Small Business Loans Review

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    PNC offers small businesses loans or lines of credit to their business banking customers in the Mid-Atlantic, Southeast, or Upper Midwest. It is suited for small to large businesses. Even though their interest rates are low, PNC Bank Small Business Loans have stringent borrower qualifications.

  • Reliant Funding Review

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    Reliant Funding is an alternative business funder that provides short-term loans and merchant cash advances (MCAs). There is no credit rating requirement to access their loans. Be cautious of Reliant’s transparency regarding their terms and fees.

  • TD Bank Business Loans Review

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    TD offers short-term loans and lines of credit to small businesses. East Coasters with excellent credit and branches in their area can take advantage of TD’s origination fee-free loans if they’re seeking less than $100,000. Be aware of their stringent borrower qualifications.

  • U.S. Bank Business Loans Review

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    U.S. Bank offers business term loans, lines of credit, and SBA loans to small businesses. They have stringent borrower qualifications but their interest rates are usually lower. U.S. Bank Business Loans are suited for small to large businesses.

  • Wells Fargo Business Loans Review

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    Wells Fargo offers unsecured business loans, lines of credit, and SBA loans to its business customers. Wells Fargo’s rates, terms, and fees are significantly better than you’ll find in most of the alternative market. But they have strict borrower qualifications and businesses with revenue problems will probably have a hard time meeting them.

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