Small business line of credit*

A revolving line of credit provides a flexible option for business capital, giving you access to funds when you need them without having to pay for what you don’t use.

Get a Small Business Line of Credit in 3 Easy Steps

Step 1
Pre-qualify online

To get prequalified, follow the “Get Started” button and enter some basic business information.

Step 2
Online approval

After your submission has been processed, a Business Consultant will reach out to discuss the options you qualify for.

Step 3
Receive secure funding

Upon approval and accepting the offer, funds are deposited directly into your bank account so you can use the money immediately.

Easy Approach to Business Line of Credit Requirements

A business line of credit is a flexible business loan that allows you to borrow up to a certain amount, or credit limit, to cover short-term working capital requirements. When you get a business line of credit, the lender approves you to borrow up to a certain amount of money and you’re able to access some or all of that money as you need it. After you fully pay off a portion you’ve used, the full amount of your line of credit is available for you to use again.

Although business lines of credit do operate very similarly to a credit card, they are not the same thing. Credit cards typically have higher interest rates and in many cases, a line of credit does not have a mandatory monthly payment system.

How does a line of credit for small business work?

Unlike a term loan, a business line of credit allows you to only pay interest on the amount you actually use. For example, if a business owner has a credit limit of $150,000 but only uses $40,000, they only have to pay interest on the $40,000 draw. Once the amount has been repaid ($40,000), the business owner can draw additional funds up to the amount of their credit limit ($150,000).

Access Both Secured and Unsecured Business Lines of Credit

There are several different types of business lines of credit. Just like a regular business loan, a business line of credit can be either secured or unsecured. A secured business line of credit requires the borrower to put up an asset to be used as collateral while an unsecured line of credit doesn’t. Since an unsecured line of credit involves a higher risk on the part of the lender, the borrower needs to have a higher business credit score to be approved for one.

Business lines of credit also come in different term lengths: short term and medium term. Unlike with loans, term lengths have nothing to do with how long you have to make payments on it or how long it’s available to you. Instead, the different terms indicate things like interest rates and spending limits. For example, a short-term line of credit has higher interest rates, lower limits, and lower revenue requirements, similar to short-term loans. Conversely, medium-term lines of credit have lower interest rates and higher borrowing limits, much like a medium-term loan does.

Credibly provides access to both secured and unsecured business lines of credit through our lending partner network with a maximum credit limit of $300,000.

Is a line of credit right for my business?

As a business owner, there are often times when working capital is tight. Without ample liquidity to cover business expenses like payroll, inventory, rent, and utilities it can be difficult to maintain operations. As one of the most flexible financing options, lines of credit are great for ensuring that you have the necessary working capital to meet your business needs and have access to emergency funds if needed.

For many businesses, a line of credit is the go-to solution for stabilizing cash flows as borrowers can secure access to funds and then draw at a later time when additional working capital is needed. It’s also a great option for those who need to remain adaptable. After all, small business owners often have a limited window of time to seize the opportunity when it arises. A line of credit allows you to quickly access the funding you need to pursue the initiative.

Because you only pay for what you use, lines of credit are also great emergency funds. That said, a line of credit would not be the right option in certain scenarios, such as trying to open a startup. This is because the total cost of capital is typically lower with a term loan.

Other financing options*

Working capital loan

Always have enough cash flow to seize opportunity.

Long term loan

Long-term loans to help your business grow and expand

Merchant cash advance

Flexible financing and repayment based on what you can afford

See all financing options

Still looking for the right fit? Check out all of Credibly’s business financing options.

FAQs about business line of credit requirements

Does opening a small business loan line of credit hurt your credit score?

Opening a new business line of credit may lower your credit score in the short term if the lender makes a hard inquiry on your credit. While this may cause your credit score to drop a few points temporarily, repaying your line of credit in a timely manner can actually help you build your credit.

How to apply for a small business line of credit?

Much like any other type of business funding, a lender will want to see proof that your business has been doing well and is capable of turning a profit. You may be asked to provide things such as:

  • Past bank statements and business tax returns
  • Your resumé and resumés for any business partners or other essential employees
  • Business plan and your business history
  • Revenue projections
  • Avoided business check
  • A copy of your driver’s license
  • P&L statements

Lenders who offer business lines of credit will also want to know that you would only be using it for purposes that would help your business grow and continue to turn a profit, not for things like paying off past losses.

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*Some products are made available through Credibly’s network of external funding partners.