What is a business line of credit?
A business line of credit is a revolving loan that lets businesses borrow up to a set limit, repay, and borrow again; interest is charged only on the amount drawn.
How does revolving credit for business differ from a term loan?
Revolving credit provides flexible access and interest on outstanding balances only, while term loans give a lump sum repaid over fixed installments with interest on the full amount.
What are typical business LOC rates?
Rates vary. Secured lines often track prime with a lower spread; unsecured lines can range higher (commonly mid-single digits to double digits APR). Exact pricing depends on creditworthiness, revenue, and collateral.
Can I get an unsecured business line of credit?
Yes, many lenders offer unsecured business lines, but they usually require stronger credit, higher revenue, and charge higher interest than secured options.
What are the basic business credit line requirements?
Common requirements include time in business (6–24 months), minimum revenue thresholds, business and personal credit checks, financial documents, and often a personal guarantee.
How do I compare lines of credit?
Compare interest structure (fixed vs variable), APR, fees, collateral, renewal terms, access methods, and customer service. Request fee schedules and sample statements from lenders.
Who are the best business line of credit lenders?
There is no single best lender—traditional banks, credit unions, and online lenders each serve different needs. Choose based on rate, speed, collateral needs, and your business profile.
