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Camino Financial
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Business Line of Credit: The 6 Best Options & Alternatives for 2023

If you’re looking for the best business line of credit, you’ve come to the right place. In this post, we’ll look at six top options and alternatives. Remember that the right for your business will depend on its unique needs and circumstances.

So read on to learn more about each option, how to apply, the requirements you will need, and the best tips for deciding which one is right for you.

Table of Contents
1. What is a business line of credit
2. How business lines of credit work
3. Why is a loan better than a business line of credit?
4. Top 6 best business lines of credit
5. How to choose lines of credit for businesses
6. Small business line of credit requirements
7. How to apply for a business line of credit
8. Best ways to use business credit lines
9. FAQs

What Is a Business Line of Credit?

A business line of credit is a form of financing that offers a revolving line of credit businesses can use for whatever they want.

Lines of credit allow businesses to borrow only the amount they need when needed. Interest is only paid on the portion of the loan used, making lines of credit an affordable financing option for start-up or established businesses.

Repayment terms work like a business credit card; you are only charged interest on the outstanding balance.

What is a business or commercial line of credit used for?

You can use business or commercial lines of credit to cover expenses such as inventory, payroll, or other business-related costs.

The credit line is typically revolving, meaning the business can borrow against it and repay the debt as needed.

This financing can be a helpful tool for businesses with irregular or seasonal income, as it provides them with a source of funding you can use when needed.

How Business Lines of Credit Work

A line of credit works like a lot of business credit cards do. This type of financing can give your business the flexibility to cover expenses as they come up.

A business owner will apply for a business line of credit, just like other forms of loans, and receive approval.

With this type of financing, you can borrow up to a certain amount and only pay interest on the amount you use.

The bank gives you a maximum credit line, and you can borrow any amount you wish, as long as you don’t exhaust the entire credit line.

You then make monthly payments based on the outstanding balance, and you’ll pay interest if you draw funds.

This makes lines of credit a good option for businesses with irregular cash flow or needs to cover unexpected costs.

You can use lines of credit for a variety of purposes, including:

  • Inventory purchase
  • Working capital
  • Expansion
  • Equipment purchase
  • Unexpected expenses

Apply for a business loan today

Type of business lines of credit

There are two common types of business lines of credit: secured and unsecured.

A secured business line of credit is backed by collateral, such as your company’s inventory or receivables.

This type of line of credit is generally easier to obtain than an unsecured line of credit, but it does require that you put up your company’s assets as collateral.

An unsecured business credit line is not backed by any collateral and is based on your company’s credit history and financial strength.

This type of line of credit is more difficult to obtain, but it can be a good option for companies that don’t have much in the way of assets to use as collateral.

Secured vs. unsecured business lines of credit: what’s the difference?

A secured business line of credit requires you to put up collateral to get it, such as a personal or business property you own.

Then, if you default on the loan, the financial institution takes possession of that collateral.

An unsecured line of credit doesn’t require collateral; you simply apply and get approved without having to put up any assets.

Why is a Loan Better Than a Business Line of Credit?

A business line of credit certainly has positives, but there are a lot of downsides, too. That’s why many businesses prefer to get small business loans.

Here’s a quick chart that can help you understand which one’s the best fit for you.

Business Line of CreditSmall Business Loan
Difficult qualification requirements.Easier qualification requirements.
Lower amounts are available.More loan amounts (and you receive a lump sum).
There is no technical repayment term.Flexible repayment terms that are easier to budget around.
You might be able to access a credit line increase.You might be able to access more capital.
Credit line interest rates are usually steeper.Small business loans tend to have lower interest rates.
You may need to put up collateral or a personal guarantee to secure the line.Some loan alternatives require collateral (Camino Financial doesn’t!).

One of the biggest downfalls of a business line of credit is the risk of gaining a lot of debt.

Just like a business credit card, it’s very easy to draw down more money from a line of credit.

However, since this isn’t a term loan, the outstanding balance keeps revolving and rolls over each month, with high interest charged.

That’s why many small businesses find that a small business loan is a much better option.

Small business loans could offer much better terms and financial certainty depending on the financial institution you choose; that’s why it is the best business line of credit alternative.

While a line of credit can benefit some businesses, they aren’t always a great fit.

A small business loan is the best business line of credit alternative for most business owners.

Apply for a business loan today

Top 6 Best Business Lines of Credit

There are many business lines of credit options—both secured and unsecured. Business owners will find various options for a business line of credit, from major banks and credit unions to online lenders.

Here are some of the best business lines of credit lenders, with full details on their offers.

Wells Fargo

Wells Fargo has two business lines of credit, both unsecured.

The first type, called the BusinessLine, is available for any business established for two years at least. This type has a higher borrowing credit limit of up to $100,000.

Wells Fargo also offers a start-up business line of credit. It’s called the Small Business Advantage and offers up to $50,000. They also provide a smaller business line of credit of up to $10,000 that doesn’t have an annual fee.

The terms available are up to five years for their revolving lines of credit. The interest rates on business lines of credit through Wells Fargo start at the current Prime Rate plus 1.75%.

Bank of America

Bank of America offers a secured line of credit starting at $25,000. Most of their lines of credit don’t require collateral unless they’re $100,000 or more.

All of their funding offerings are subject to an annual review period.

You can also get a discount on your interest rate if you have a business deposit account with either Bank of America or Merrill Edge or a Merrill Lynch business investment account.

To qualify, you have to be in business for two years. In addition, for unsecured credit lines, you have to have annual sales of at least $100,000. For secured lines, your annual sales must be at least $250,000.

PNC Bank

PNC Bank offers a few different secured business line of credit options.

The first offers a long seven-year repayment period where you only have to make payments on the interest. After that period, you’ll have an additional 10 years to repay the amount of money you drew down from the line of credit.

The amount offered through this secured line of credit ranges from $10,000 up to $1 million. You can use a commercial property the business owns and occupies or a personal residence as collateral.

They also offer other secured credit lines for small businesses with even higher maximums if that’s something you need. These lines are subject to annual renewal reviews as well as collateral that can include things such as business equipment.


Fundbox is an online lender that provides an alternative option for small business lines of credit to some of the big financial institutions.

One of the most significant advantages to a line of credit with Fundbox is they try to work with newer businesses, accepting applications from companies that have been in operation for six months or more.

They offer a credit line for anywhere between $1,000 and $150,000, which provides flexibility for small business owners when they need funding. The interest rate on their lines of credit ranges between 4.66% and 8.99%.

One of the most significant downsides to a line of credit with Fundbox is they don’t have a long term: they only offer 24 or 12-week repayment periods, with the longer period offering a higher interest rate.

What’s more, you have to pay the money you borrow weekly, with Fundbox charging interest every week.


Another online funding option is a company called Credibly.

They specialize in offering a business line of credit for small business owners who don’t have great credit. They accept applications from people with a minimum credit score of 560.

They offer business lines of credit of up to $250,000, with interest rates as low as 4.80%. Their repayment terms are typically 26 weeks, though they may offer alternative options for repayment.

Another downside is that they could require you to pay what’s known as an origination fee just to open your line of credit. Whether you pay this expensive fee will likely depend on your credit score.


OnDeck is an online financing company that offers quick online business lines of credit.

When you request to draw down money from your small business line of credit, the company will transfer the funds into your account the next day. This is a huge advantage.

Their credit line can range between $6,000 and $100,000, which is excellent for small businesses especially. However, their interest rates are rather high, ranging from 35.9% to 48.06%.

In addition, their repayment period can be as much as 12 months.

How to Choose Lines Of Credit For Businesses

There are a few key things to remember if you want to get a line of credit for business.

Consider the interest rate and fees associated with the loan.

Finding a low-interest rate loan is essential to save money on your monthly payments.

You should also look for a loan with flexible repayment terms so you can make payments on time and avoid defaulting on the loan.

Another thing is the collateral requirements of the loan.

Some lenders may require you to put up collateral, such as your home or business, to qualify for the loan.

This means that if you default on the loan, the lender could seize your property.

Make sure you understand the collateral requirements before signing any loan documents.

You’ll want to shop around and compare different lenders before choosing a line of credit for your business.

Each lender has different eligibility requirements, interest rates, and fees. Finding a loan that fits your needs and offers the best terms is important.

By shopping around, you can save money and get the best deal on loans for your business.

Tips for Comparing Business Lines of Credit

Business lines of credit provide working capital that you can use for various purposes, such as inventory purchases, equipment upgrades, or emergency expenses.

When comparing business lines of credit, there are several key factors to consider, including the interest rate, credit limit, repayment terms, and fees.

Interest Rate

A lower interest rate will save you money on interest payments, so shopping around and comparing rates from different lenders is essential.

Credit Limit

This is the maximum amount of money you can borrow from the lender. Make sure to choose a lender with a credit limit that meets your business’s needs.

Repayment Terms

Repayment terms vary from lender to lender, so comparing these is important before selecting a business line of credit.

Some lenders may require weekly or monthly repayments, while others may offer more flexible repayment terms. Choose a repayment schedule that works best for your business.

You can use a business line of credit calculator to estimate your payments.


Some lenders charge fees for their business lines of credit, such as annual or maintenance fees. Be sure to compare the fees charged by different lenders before selecting a business line of credit.

Small Business Line of Credit Requirements

If you want to get a business credit line, you’ll find the requirements and steps in this section.

How to Get a Business Line of Credit

Approval processes for each small business line of credit are different, and each lender will have its own.

However, there are some general requirements that most financial institutions abide by.

Time in business

While many lenders will cater to newer businesses, almost all of them will require the business to have been open and operating for at least six months.

This means that a line of credit is typically not a good fit for a start-up company that is still in the organization stages.

Annual revenue

Most lenders will also require that the business has at least $25,000 of annual revenue to qualify.

If you’re applying with a bank, they will most likely require you to have a business bank account with them.

Credit score

Many will have a minimum acceptable credit score for the applicant.

For example, online lenders may have lower requirements (like a minimum personal credit score of 550 or higher), while traditional financial institutions may require personal credit scores of 650 or higher.

Many other lenders will also review your business credit scores.


This one depends on the type of line of credit you get.

A secured business line of credit will require collateral to open. This guarantee could be in the form of assets, like your home or other physical, tangible assets the business owns.

If you default on your loan, the lender will take the collateral to recoup their losses.

On the other hand, when you apply for an unsecured business line of credit, the lender won’t require you to put up any collateral, just like most business credit cards.

Camino Financial small business loans have fewer requirements than many line-of-credit issuers.

How To Apply For a Business Line of Credit

The process for applying for a line of credit is very similar to any other personal or business loan type.

  1. The first step is to decide how much you think your business would need in terms of a credit limit.
  2. Then, research the various companies that offer a business line of credit that would meet your requirements.
  3. Make sure also to check the fees they charge (like a late payment or monthly maintenance fee).
  4. Once you have selected a company, it’s time to start the application process. Today, much of this process you can complete online, although you may have to go into a local branch to show proof of documents.
  5. After you have filled in all of the pertinent and basic information about your business and yourself, the financial institution will often require you to provide documentation as proof that you are worthy of the business line of credit.
  6. You may have to provide copies of your business and personal tax returns, business financial statements and bank account, a balance sheet, and maybe even some profit-loss statements from recent years.
  7. The financial institution will also likely run a credit history check on the business and you personally.
  8. Once you submit all of this, you should receive an official decision in a few business days.
  9. Some online lenders will work a little quicker than traditional financial institutions for the approval process and availability of the business line of credit.

Camino Financial has a much easier lending process. Try it for yourself!

Best Ways to Use Business Credit Lines

This financing is an excellent way to get the cash you need to grow your business.

Here are some of the top ways businesses can use lines of credit:

  • Inventory expansion: Finance expansion allows you to take advantage of bulk discounts and keep your shelves stocked.
  • Accounts receivable financing: Finance accounts receivable, providing you with the working capital you need to keep your business running smoothly.
  • Equipment financing: You can finance the purchase of new equipment, ensuring that your shelves are stocked with the latest and greatest.
  • Marketing and advertising campaigns: Use it to finance marketing and advertising campaigns, helping you reach new customers and grow your business.
  • Seasonal expenses: Use it for seasonal expenses, such as inventory for the holiday season or additional staff during

Grow Your Business with the Best Funding

A business loan is one of the best financing available to small businesses because you receive a lump sum, which has more investment flexibility.

At Camino Financial, we do our best to serve the small business community by offering financial products that help them succeed. We designed our loans to help you finance your business expenses.

Camino Financial’s small business loans are a great example. If you need money to help fund your business or help it grow, our small business loans can help you along the way.

We offer a straightforward application process and a quick decision—which is entirely online. You can apply anytime, anywhere.

We offer small business loans from $5,000 and up to $400,000, with flexible payment options and affordable interest rates.

Finally, we don’t require our applicants to have a Social Security number to apply. An ITIN is all you need.

Apply for a business loan today

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What is revolving credit?

Revolving credit means there is no set end date and definitive payment to the line of credit.

Unlike a small business loan with monthly payments and an end date, the outstanding balance with revolving credit rolls over from month to month.

This means if you don’t pay down enough each month, it could continue rolling over into eternity.

What’s the average interest rate on a business line of credit?

The interest rates for a business line of credit can vary greatly. They can start as low as 8% but can go all the way up to more than 50% in some cases.

Remember that you only pay interest on the financing you used, not on the credit limit.

Even when you have a lower interest rate, though, it can be pretty expensive, as the lender charges the interest on the revolving balance each month.

Should I get a business loan or line of credit?

There are some instances in which a business line of credit could benefit your business.

However, in most cases, a small business loan is much preferable.

They have better terms, offer more money, have easier qualification requirements, and cost less in the long run.

Where to get a business line of credit?

The best place to get a business line of credit is from a local financial institution. Credit unions and banks are typically the most likely sources of this type of financing.

However, many online lenders also provide business lines of credit.

What is the best business line of credit?

There are a few different things to consider when determining the best business line of credit. First, you’ll want to think about what your specific needs are.

Do you need a lot of money right away, or can you really make do with a smaller amount? How much can you afford to pay back each month? What is your overall creditworthiness?

Once you have a good idea of your needs, you can choose the one that fits.

What credit score do you need for a business line of credit?

A business line of credit typically needs a minimum credit score of 680 or higher. This is typically based on the business’s cash flow and credit score, not the individual owner.

A high credit score and a positive cash flow are important factors in determining whether or not a lender will approve a business for a line of credit.

Is it difficult to get a business line of credit?

Getting a business line of credit can be difficult, but it’s not impossible.

The first step is to make sure you have a good personal or business credit score. If it’s good, the next step is to find a lender that offers business lines of credit.

A few lenders that offer business lines of credit include Wells Fargo, Chase, traditional banks, and American Express.

What are the easiest lines of credit to get?

There is no definitive answer to this question as it varies depending on each individual’s creditworthiness. However, some of the easier lines of credit to obtain would be through a secured credit card or a sheltered line of credit from a financial institution.

What is a business line of credit good for?

Some common reasons include needing access to quick cash to make inventory purchases, cover unexpected expenses, or take advantage of opportunities as they arise.

How do I get a business line of credit for my LLC?

You will need to have good credit and collateral. You can start by applying for a Business Credit Card which will help build your business credit.

Another option is to apply for a business line of credit from your local bank or financial institution.

If you have good personal credit, you may be able to get an unsecured business line of credit. However, if you have bad personal credit or no collateral, you will likely need to pledge collateral in order to get approved.

The best way to build business credit is by paying your invoices on time and in full, maintaining a good balance on your credit cards, and not applying for new lines of credit too frequently.

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