Best Small Business Line of Credit Loan in 2018

This article compares the best small business line of credit providers readily accessible online. We also share what it will take to qualify and what to use a line of credit for.

Street Shares: Best Overall Small Business Line of Credit Provider

If you’re looking for the lowest APR, StreetShares is the newcomer that stands out as the best small business line of credit option with rates starting from 9%. When we took a close look at Street Shares, we were impressed by their modern take on peer-to-peer lending and their Trust Pilot score of 9.5.

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Best Small Business Line of Credit Summary

 Best forLoan $ APR* 
street-shares-logo-one-of-the-best-small-business-loans-optionsLow APR and lower limit line of credit$5-100K
9-40%Visit Site
fundbox-logo-one-of-the-best-small-business-loans-optionsBad credit and lower limit line of credit$1-100K15-59%Visit Site
image-of-ondeck-a-provider-of-fast-business-loansFast funding (most loans take 24-hours)$1-100K14-40%Visit Site
bluevine-logo-one-of-the-best-small-business-line-of-credit-providersLow APR and higher limit line of credit$6-200K15-78%Visit Site
kabbage-logo-one-of-the-best-small-business-loans-optionsBad credit and higher limit line of credit$2-250K24-99%Visit Site
* The APR will depend on how each online lender perceives the risk involved.
street-shares-logo-one-of-the-best-small-business-line-of-credit-options

Street Shares: Best for Low APR and Lower Limit Line of Credit

If you are looking for the lowest APR, StreetShares maybe a better option than Fundbox or OnDeck. Like OnDeck, you need a credit score of 600+ and at least a year in business to qualify. However, Your line of credit limit will be restricted to a maximum of 20% of your annual sales revenue. But for most early stage businesses, this is a sensible limit to set.

Visit Street Shares -logo-one-of-the-best-small-business-line-of-credit-options

Fundbox: Best for Bad Credit and Lower Limit Line of Credit

Like Street Shares, Fundbox is a viable option if your company is just getting started. This is because you can qualify after six months of trading with $25k of sales revenue. If you have bad credit and do not qualify for Street Shares, this option is a good solution as no minimum personal credit score is required to get approved.

Visit Fundbox ondeck-logo-one-of-the-best-small-business-loans-options

OnDeck: Best for Fast Funding and Lower Limit Line of Credit

As we mentioned above, OnDeck is a great option if you want to put a small business line of credit in place in a hurry. You can apply online in 10 minutes and most loans come online the next day. If you qualify, this option comes with the peace of mind of knowing OnDeck has a Trust Pilot customer rating of 9.6.

Visit OnDeck bluevine-logo-one-of-the-best-small-business-line-of-credit-providers

BlueVine: Best for Low APR and Higher Limit Line of Credit

BlueVine is a better option than Kabbage for a higher limit small business line of credit because of its lower APR. However, the bar is set higher in terms of what you need to qualify. You’ll need a personal credit score of 650+, $500,000 in annual sales revenue and two years of trading to be considered.

Visit BlueVine kabbage-logo-one-of-the-best-small-business-loans-options

Kabbage: Best for Bad Credit and Higher Limit Line of Credit

Kabbage is a great option for a higher limit line of credit if you have a bad credit. This is because no minimum personal credit score is required to get approved. However, your business will require at least $5ok in annual sales revenue and one year of trading to qualify.

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Do you Qualify?

You can turn to traditional lenders like banks or to online small business lenders like Fundbox, OnDeck and Kabbage. This article has focused on the online lenders because they are readily accessible to most startups and small businesses. However, it makes sense to explore a bank line of credit to get a lower APR if you qualify and can afford to wait 3-4 weeks for approval.

Online Lenders Make it Easier to Qualify

 Credit ScoreAnnual RevenueTime in Business 
fundbox-logo-one-of-the-best-small-business-loans-optionsNo minimum$25K6 monthsVisit Site
kabbage-logo-one-of-the-best-small-business-loans-optionsNo minimum$50K12 monthsVisit Site
street-shares-logo-one-of-the-best-small-business-loans-options600$25K12 monthsVisit Site
image-of-ondeck-a-provider-of-fast-business-loans600$100K12 monthsVisit Site
bluevine-logo-one-of-the-best-small-business-line-of-credit-providers650$500K24 monthsVisit Site
* The APR will depend on how each online lender perceives the risk involved.

Whereas online business lenders typically have lower qualifying criteria than banks and as a result they are more readily accessible to startups and small business owners. In the table above, we have summarised the main criteria. This should help you to see at a glance whether you qualify.

Traditional Lenders Deliver the Lowest APR

Banks generally expect small business owners to have good personal credit scores (700+). They also require you to have a good trading record for at least two years. As part of this, they will look to see that your sales revenue is regular and healthy. Larger small business lines of credit may require a lien over your business. If you cannot  pay back your line of credit, this can then be taken and sold instead of payment.

Setting up a small business line of credit with a bank will generally take 2-3 months to be approved. Banks will want to review: Your personal and business credit score, your business plan and financial statements, your personal and business tax returns. They will also want to understand exactly how you intend to use your line of credit.

 

Line of Credit vs Term Loan?

A line of credit works much like a credit card. It allows you to borrow money when you need it. The key benefits of a small business line of credit loan over a term loan are that you:

  • Are able borrow money “on demand” up to your agreed limit
  • Only pay interest on the amount outstanding
  • Can keep your line of credit open, (renewing it every 1-2 years)

Whereas, with a small business term loan you borrow a fixed sum of money for a fixed period of time. Often, term loans cannot be paid back early to reduce the cost of money.

As a result, term loans are good for “Known costs” that you wish to incur, like for instance, bulk buying stock to take advantage of lower supply prices. Whereas a small business line of credit is best suited to “Unforeseen costs” which may impact your short-term cash flow. These tend to resolve themselves or can be managed through given enough time to do so.

The Juice Press

This article has reviewed the best online small business lines of credit currently available. If time allows and you qualify for a traditional bank line of credit, we recommend pursuing this as your first option as the APR will be lower.

However, most startups and small businesses do not qualify for bank loans. As a result, online lenders have filled the gap in the market by providing small business line of credit loans to help manage unforeseen short-term cash flow issues.