Business Line of Credit Lenders for 2020 That Can Boost Your Business

Top10.com Staff
Compare the best business line of credit lenders
A business line of credit provides flexibility that a typical business loan doesn’t. Pay interest only on the money you use and withdraw funds when you need it.

Here is a short list of the top line of credit providers for your business funding needs. Compare them, and choose the one that’s right for your business. 

Lender
APR
Min. Credit Score
Time to Funding
4.8% +
600 
1 day
8% +
Varies
1-2 weeks
Varies
600
Varies
Varies
Varies
3 hours +

1. BlueVine

  • Borrowing limits: $5,000  to $250,000
  • Credit score requirements: 600+
  • Minimum annual revenue: $100,000
  • Repayment terms: 6 or 12 months
  • APR: Starts from 4.8%
  • Fees: No origination fees or prepayment fees
  • Time until funding: 1 day

Bluevine has 2 business lending products: lines of credit and invoice factoring. It’s the most appropriate lender for business lines of credit for 2 main reasons: low rates and quick funding. With APRs starting at 4.8%, BlueVine is just about the best in the business. It promises to approve businesses within 24 hours, although in most cases it makes a decision in around 20 minutes. Once approved, your business can make a withdrawal with a single click and receive the funds within a few hours. In return for its low rates, BlueVine requires collateral. This takes the form of a general lien on the business’ assets, backed by a personal guarantee from the business owner. 

Read the full BlueVine review.

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2. Lendio

  • Borrowing limits: $1,000 - $500,000
  • Credit score requirements: Varies
  • Minimum annual revenue: $100,000
  • Repayment terms: 1 or 2 years
  • APR: 8% – 24%
  • Fees: None
  • Time until funding: 1-2 weeks

Lendio is an online marketplace that connects users with top small business lenders in the United States. Through its platform, users can find business lines of credit and other products like terms loans and SBA loans. The platform is easy to use. Just fill out info about yourself and your business and upload supporting documentation. Within a few minutes, you’ll see a list of the best lenders offering business line of credit needs. Lendio doesn’t charge a dime for using its service. Fees and conditions vary by partnering lender.

Read the full Lendio review.

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3. LendingTree

  • Borrowing limits: $3,000 - $500,000
  • Credit score requirements: 600+
  • Minimum annual revenue: $24,000 - $144,000
  • Repayment terms: 1-5 years
  • APR: Not listed
  • Fees: None
  • Time until funding: Varies

LendingTree is the biggest lending marketplace in the business, partnering with hundreds of lenders around the US to connect borrowers with competitive rates. It works with consumers and businesses, offering dozens of lending products, including business lines of credit. To access top rates, simply fill out information about yourself and your business. LendingTree’s automated search tool will then reveal the best business lines of credit. Select your preferred lender to complete an application.

Read the full LendingTree business loans review.

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4. LendingExpress

  • Borrowing limits: $5,000 - $500,000
  • Credit score requirements: Varies
  • Minimum annual revenue: $24,000 - $120,000
  • Repayment terms: 1-3 years
  • APR: Not listed
  • Fees: No origination fees or prepayment fees
  • Time until funding: 3 hours +

LendingExpress connects businesses with lines of credit, loans, and other lending products from top American lenders. It promises some of the quickest turnaround times in the businesses, with application to funding in as little as 3 hours. LendingExpress is free to use. It’s a marketplace, not a direct lender. Therefore, fees and conditions vary between LendingExpress’ various partnering lenders.

Read the full LendingExpress review.

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How to Choose the Right Company for Your Business Line of Credit

Online lenders provide a simplified path to receiving a line of credit and are often willing to approve small businesses that may be rejected by traditional lenders. Funding is usually much quicker with online lenders than it is with banks. When choosing a lender or lending platform to provide you with a business line of credit, there are several key factors to consider.

  • Funding limits. 

The best thing about a business line of credit is you can borrow at any time, up to a maximum amount. A scan of online lenders shows credit limits ranging from as low as $2,000 to as high as $500,000.

  • Funding speed. 

With a line of credit, there are 2 things to consider: speed of approval, and speed of funding. Lenders can take anywhere from a couple of hours to a couple of weeks to approve applicants. The best ones stand out by getting funds to their customers within a few hours of a request for withdrawal.

  • APR.

As with a loan, comparing lines of credit will help you get the lowest APR for your business. The APR takes into account the annual cost of your line of credit, comprising interest rate plus fees.

  • Minimum Credit Requirements. 

Whenever you apply for a business line of credit, your lender will run a credit check. Many lenders publish the minimum credit requirement on their website. With lending marketplaces, the minimum score can vary. Most online lenders have a minimum credit score of 600 or 620, although a handful go even lower.

  • Reputation. 

While online lenders haven’t been around as long as the banks, many of them have built strong reputations among business customers. When selecting a lender, read expert reviews and customer feedback to find out about their level of service and reliability.

The 5 Best Practices for a Business Line of Credit

Making a credit line work for you requires an understanding of your company’s cash flow cycle and how best to apply the available funds to support operations during slow seasons. Think about these 5 things before taking out a line of credit: 

1. Take Stock of Your Needs

A line of credit isn’t always the best choice to bring in the cash you need. If you’re facing a large one-time payment or planning an expensive purchase, a traditional loan will serve you better, and can often provide lower rates, especially if you qualify for a Small Business Administration (SBA) loan. Lines of credit typically cover up to $100,000, so if you're looking to borrow a larger amount, consider a term loan or other type of working capital loan.

2. Identify Cash Flow Challenges

Recognizing where and when potential budget problems may arise can help you determine how to use a line of credit. Ask yourself:

  • What times of year are the hardest?
  • Where do I need extra money most often?
  • What other payments am I making right now?

Common budget challenges for businesses include payroll, inventory, rent, utilities, and marketing. Go over past cash flow trends to find where a credit line can be most helpful. If you just want some extra cash to fall back on during the hard months or quarters, a credit line could be right for you. If your business is looking to grow with a large purchase or large marketing campaign, those cash flow issues might be better suited for other types of business loans. 

3. Plan for Emergencies

It isn’t possible to anticipate every unexpected problem, but you can prepare yourself for the most likely emergencies your business might encounter. Whether it’s equipment failure, the need to replenish inventory in the middle of a holiday rush, or a sudden change in market conditions, a line of credit can be there to cover the costs. Your credit will need to be solid to qualify for a line of credit with good terms though, so plan ahead to be able to show your lenders that you're prepared to pay back the loan on time and you've thought ahead. 

4. Spend Wisely

Although it may seem like obvious advice, it’s critical to exercise smart spending habits after qualifying for a credit line. Having a certain amount of money to draw from doesn’t mean you should take as much as you can. “Maxing out” the given amount leaves you no recourse for emergencies or growth opportunities. It’s important to know your needs, challenges, and potential emergency situations in advance so that you can plan to have enough credit available. If you see yourself making one large purchase and maxing out your credit line, you may pay less interest and have better repayment terms with another kind of loan. 

5. Make Consistent Payments

Just like with a traditional loan, making timely payments on your credit line improves your overall business credit score and can increase your chances of qualifying for other (possibly larger) financial help in the future. You can also use your credit line to stay current with other payments, including invoices, credit cards, loans, and basic monthly obligations. Aim to pay down the balance on your credit line to zero at least once a year to maintain trust between your business and the lender. Adopting these best practices can help your business thrive when you're taking out a line of credit. Learn about some of the best small business loan lenders, and increase your chances of qualifying before you apply.

Let's Get Down to Business

If your business has trouble managing cash-flow or needs to cover a large, unscheduled expense, then a business line of credit might be your best option. Lines of credit offer greater flexibility than loans. They are useful when your business:

  • Is subject to seasonal variations in sales
  • Requires a short-term boost in working capital
  • Is unable to meet a payroll or invoice deadline
  • Needs to replenish inventory
  • Needs to hire temp workers during a busy period
  • Needs to boost marketing spend ahead of a special event

Before applying for a business line of credit, do your research to find out what each lender requires. The better your business conditions, the more likely your business will be approved for a business line of credit. Since most lenders are requiring personal guarantees for loans, the responsible party taking out the loan should have good credit with no negative activities such as foreclosure or bankruptcy.

Top10.com Staff
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