Business Line of Credit

A business line of credit provides access to capital as needed, with interest charged only on the amount borrowed.

Qualifications for a Business Line of Credit

1+ Year in Business

Assets or Collateral

Lowest Rates, Longest Terms, & Highest Amounts

Funding Amount

Up to $100MM


Up to 25 years

Time to Fund

1 to 7 days

Questions to Ask Before Applying for a Business Line of Credit

You only pay on the amount you draw – not your total credit line. That means that – if you draw $50,000 from your $100,000 credit line – you’re only paying interest on the $50,000.

This structure allows you to keep your line of credit on the sideline for when you need it without worrying about unnecessary interest.

If your lender reports to a business credit bureau, then timely and consistent payments will work toward strengthening your credit score. Otherwise, your timely repayment will build “credibility” and “creditworthiness” with your lender, which can help you secure better terms in the future.

Interest rates range from 5% to 60%, depending on your business credit score, annual revenue, your time in business, and your willingness/ability to offer collateral.

Collateral, which can be equipment, real estate, or strong receivables, serves as an extra layer of protection against defaults for the lender. By offering an asset to secure your financing, you reduce the level of risk for the lender and, in turn, decrease the interest rate you’ll receive.

Yes, you can secure a business line of credit with a lower FICO score, but you should also be realistic about the terms you qualify for.

Lower FICO scores are seen as “risky” by lenders, so they’ll offer higher interest rates and lower credit limits as a result. You may have to offer collateral, too, as a method of securing the financing.

If your credit score is less than favorable, it’s worthwhile to consider proactively strengthening it before applying for financing. Not everyone has enough time to do this, of course, but even minor increases can yield big savings when it comes to interest rates.

Unsecured lines of credit require no collateral backing, whereas a secured line of credit comes with a collateral requirement. If you default on secured financing, the lender can seize the collateralized assets to recoup their lost cost.

Although unsecured credit lines don’t need collateral, some lenders require a personal guarantee or lien to approve your application. These give your lender the right to target your personal assets if you’re unable to repay your loan.

It’s important to understand whether your contract requires collateral, a personal guarantee, or a lien before you finalize it. Never be afraid to ask your lender questions or walk away if a contract doesn’t make sense.

If you’re looking to get a business line of credit, you’ll need to approach the situation strategically. Here are some steps to take.

  • Evaluate Your Funding Need: First and foremost, you’ll need to understand why you need business funding and how fast you need it to meet your goals. You should also review your business finances and determine a safe level of debt to take on.
  • Review Lender Requirements: From one to another, each lender has different requirements, preferred industries, and nuances that affect your benefits. Understand the qualifications of multiple lenders, so you can apply with more than one and give yourself options to choose from.
  • Proactively Gather Documentation: Coming prepared with all the information your lender needs is one of the best ways to speed up the funding process. If you’re unsure of what documents you need to bring, don’t be afraid to reach out directly to the lender and ask.
  • Apply and Compare Your Options: Once you have a list of a few top lenders where you either meet or exceed the minimum qualifications, you’ll apply with each and compare your approvals. Having options at this stage gives you negotiating power, which can serve to improve your offered terms.

At National Business Capital, you can simplify the process above and gain a financing partner simultaneously. With one easy application, you unlock all the most competitive offers you qualify for within our diverse lender platform. Your personal Business Finance Advisor helps you select the best one with your best interest placed at the forefront.

Although your specific interest rate depends on a variety of factors, business lines of credit generally carry lesser interest rates than business credit cards. They also feature higher credit limits, which allows borrowers an entirely different level of flexibility and financial power.


It all depends on your business and goals. For some, the flexibility of a line of credit makes it a better option than a business loan, while others prefer the lump sum format of standard term loans.

There are many businesses that need a specific format of credit. For example, a business seeking to begin a major renovation of multiple storefronts would benefit more from a longer-term, more substantial lump-sum product. If they had leveraged a business line of credit, they’d likely have their entire line drawn, which would significantly raise what they’re paying in interest.

If you’re unsure of which financing option is right for your unique circumstances, our Business Finance Advisors can help. Complete our digital application today to start the process with our team.

Here are a few of the many benefits of a business line of credit.

  • Flexible access to capital
  • Streamlined cash flow
  • Interest applies only to the amount drawn
  • Can build business credit/creditworthiness
  • Easy to use
  • Ability to use the financing as an emergency fund

The flexibility of business lines of credit is the most prominent benefit. Unlike other financing options, you’re able to draw funds whenever necessary and enjoy an extended repayment schedule.

Secure the Best Business Line of Credit in 2024

  • Paperwork
  • Application
  • Number of Lenders
  • Service Level
  • Approval Process
  • Speed to Funding
  • Collateral Requirements
  • Business Profitability
  • Credit Score
  • Credit Check
Successful Funds  
  • 3 Months Bank Statements
    No Tax Returns Required
  • One Page – One Minute
  • 75+
  • Business Advisor
  • Hours/Days
  • Hours/Days
  • Not Necessary
  • Not Necessary
  • No Minimum FICO
  • Soft Pull
  • 2-3 Years Tax Return
    2-3 Years Financials
  • Lengthy
    Paper Intensive
  • 1
  • Processor
  • Weeks/Months
  • Months
  • Always
  • Last 2 Years
  • 680+ FICO
  • Hard Pull
Direct Lenders  
  • 2-3 Years Tax Return
    2-3 Years Financials
  • Lengthy
    Paper Intensive
  • 1
  • Processor
  • Weeks/Months
  • Months
  • Always
  • Last 2 Years
  • 680+ FICO
  • Hard Pull

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