How does a business line of credit work, and can your business get one?
A business line of credit is a revolving limit that you draw against when you need cash. You pay interest only on the amount drawn, and what you repay becomes available again. Typical lines run $10,000 to $250,000, and lines rarely go past $500,000 (typical ranges, not offers). Online lines can open in 1 to 3 business days. Pricing sits close to an online term loan, and fees are common. A line saves money only while part of it stays untouched. Draw the whole limit and carry it, and you have a term loan, often at a higher rate.
Part of our guide to Small Business Loans: Types, Costs and What It Takes to Qualify.
How does a business line of credit work?
A lender approves a limit, you take money out in draws, and you repay each draw on a schedule. What you repay becomes available again, and the lender usually reviews or renews the line each year.
Five terms cover most of it:
- The limit is the most you can owe at one time.
- A draw is each time you take money out.
- The repayment schedule belongs to each draw. Some lenders fix equal monthly payments per draw, and others ask only for minimum payments. Ask which applies.
- The revolving balance is what you owe now. Repay $20,000 and $20,000 is available again without a new application.
- Renewal is the lender's periodic review, often each year.
Say a lender approves a $50,000 limit and you draw $20,000 to buy materials for a large job, repaying it over 6 months. At an example 12% APR that is $3,451 a month and $706 in interest. At an example 30% APR it is $3,631 a month and $1,786. You paid no interest on the $30,000 you left alone, though fees may still apply.
What types of business lines of credit are there?
Four: an online lender line, a bank line, an SBA Express line and the SBA 7(a) Working Capital Pilot. Online lines are the quickest to open, while banks and the SBA usually cost less and ask for more.
Business lines of credit compared (typical ranges, not offers)
| Type | Typical limit | Cost | Typical speed to open | Typical published floor (lenders' own sites, last checked September 24, 2026) | Best when |
|---|---|---|---|---|---|
| Online lender line | $10,000 to $250,000 is typical; lines rarely go past $500,000 (typical range) | Priced like an online term loan, typically 15% to 45% APR, plus fees (typical range) | 1 to 3 business days (typical range) | Published by online lenders: about 12 months in business and a personal score of about 625; revenue floors from about $3,000 to $10,000 a month across published lines | The need recurs or comes in uneven amounts, and speed matters |
| Bank line | Varies widely; lines rarely go past $500,000 (typical range) | Usually below an online line; for comparison, bank term loans run 6% to 20% APR (typical range), plus fees | 1 to 2 weeks (typical range) | Published by banks: a personal score of 660 to 680 or higher and 6 months to 2 years in business depending on the bank; a bank publishes $100,000 a year in revenue | You have trading history and clean statements, and can wait for a lower price |
| SBA Express line | Up to $500,000, per the SBA | Negotiated with the lender and capped by the SBA at 10% to 13.5% on variable rates as of September 2026, per the SBA | Set by the lender's own process; the SBA lists no separate review time | The SBA publishes no minimum score; the lender sets its own, and many SBA lenders look for about 650 (typical lender practice, not an SBA rule) | You meet SBA eligibility rules and want a long revolving term, up to 10 years per the SBA. Guide: SBA Express Loan: Limits, Rates and Terms (2026) |
| SBA 7(a) Working Capital Pilot | Up to $5,000,000, per the SBA | Set within the 7(a) program; see the SBA's 7(a) page for the Pilot's rate rules | Weeks to months for SBA lending (typical range, not an SBA timeline) | At least one year of operating history, per the SBA; the SBA publishes no minimum score and the lender sets its own | The line is large, you can use up to 60 months per the SBA, and you are in an industry such as manufacturing, wholesale or professional services. Guide: SBA 7(a) Loan Requirements, Rates and Terms (2026) |
Typical ranges, not offers. Only the SBA figures come from a published source. Floors are the minimums lenders publish on their own sites, last checked September 24, 2026, and they change. Business Loan Requirements by Lender (2026) lists them lender by lender.
Is there an SBA line of credit? Yes, two kinds. SBA Express permits revolving lines up to $500,000, and the lender makes the credit decision without SBA review. The 7(a) Working Capital Pilot offers monitored lines of credit within 7(a), up to $5,000,000 and 60 months.
A line can also be secured or unsecured. A secured line is backed by an asset such as property or equipment and usually prices lower. An unsecured line pledges nothing, but most lenders still ask for a personal guarantee, which makes you personally responsible if the business cannot repay.
What does a business line of credit cost?
Interest on what you draw, plus fees. Online lines are priced like online term loans, typically 15% to 45% APR, and bank lines usually cost less, closer to bank term loans at 6% to 20% APR (typical ranges, not quotes).
Maintenance, draw and non-use fees are common, and not always inside the advertised APR. Ask each lender what it charges in dollars and whether the quoted APR includes it. Add the fees to the interest before you compare two lines, because a lower rate with heavy fees can cost more than a higher rate with none.
Here is what one draw costs at two example rates, repaid in equal monthly payments:
| Example only, not an offer, fees left out | Repaid over | APR (example rate) | Monthly payment | Total interest |
|---|---|---|---|---|
| $20,000 draw | 6 months | 12% | $3,451 | $706 |
| $20,000 draw | 6 months | 30% | $3,631 | $1,786 |
| $20,000 draw | 12 months | 12% | $1,777 | $1,324 |
| $20,000 draw | 12 months | 30% | $1,950 | $3,397 |
| $50,000 draw (a full draw of a $50,000 line) | 12 months | 12% | $4,442 | $3,309 |
| $50,000 draw (a full draw of a $50,000 line) | 12 months | 30% | $4,874 | $8,492 |
The real saving comes from what you do not borrow. Say you need $30,000, and the alternative is taking a $100,000 term loan to be safe. Over 24 months at 30%, the two compare like this:
| Example only, not an offer, fees left out (24 months, 30% APR, example rate) | Monthly payment | Total interest |
|---|---|---|
| $30,000 drawn on a line | $1,677 | $10,257 |
| $100,000 term loan, taken in full | $5,591 | $34,191 |
The term loan charges interest on the full $100,000 from day one, and the line only on the $30,000 you drew. That gap closes as you draw more. Take the whole limit and carry it, and you pay term loan costs on a product that often prices higher on paper.
What Business Financing Costs explains how to compare offers, and the Business Loan Calculator: Monthly Payments and How Much You Can Borrow runs your own amount, rate and term.
What do you need to qualify for a business line of credit?
Lenders publish different minimums by type, and a published minimum only means you can apply. Online lenders publish about 12 months in business and a personal credit score of about 625. Banks publish a score of 660 to 680 or higher and 6 months to 2 years in business, depending on the bank. The SBA publishes no minimum score, and the lender sets its own bar.
Published revenue floors on lines run from about $3,000 to $10,000 a month, and a bank publishes $100,000 a year. Floors were last checked September 24, 2026.
Past the floor, lenders look at cash flow, existing debt and how steady your deposits are. A line is a little harder to get than a term loan, and harder to keep: the lender plans for you drawing the whole limit, and many review a line from time to time and can reduce or freeze it if your results slip. Business Loan Requirements by Lender (2026) has the full list.
Is it hard to get a business line of credit?
It is harder than a term loan of the same size, because the lender prices the chance that you draw the whole limit. Your odds improve with 12 months or more in business, steady monthly deposits and a personal score of 625 or better.
Open the line before you need it, because asking in a weak month means asking from your worst position. Order matters too: a term loan payment already uses up cash flow, so a line you apply for afterward can come out smaller.
Can an LLC get a business line of credit?
Yes. Some online lenders publish that they lend only to corporations or LLCs. The LLC does not replace you, though: lenders weigh time in business, revenue and the owner's personal credit more than the entity, and most ask for a personal guarantee.
A new LLC still has to meet time in business floors, and many online lenders publish about 12 months. Can you get a business loan in your first year? shows what is reachable early.
How fast can you open a line and draw on it?
Two clocks run. Opening the line can take 1 to 3 business days online, and each draw after that is usually much quicker. Banks typically take 1 to 2 weeks to open a line, and SBA lending typically runs weeks to months (typical ranges, not commitments).
An online lender's published best case is a decision in as fast as five minutes and draws in as fast as 24 hours, with draws still subject to review. The clock starts at a full application with bank statements. Business Loan Approval Times by Product (2026) goes product by product.
Should you choose a line of credit or a term loan?
Choose a line when the amount or timing is uncertain, and a term loan when you can name the figure and spend it at once. A line charges interest only on what you draw, while a term loan charges on the whole amount from the first day. Business Loan vs Line of Credit: Which Is Better for Your Small Business? compares the two in full.
For everyday costs in any form, What is a working capital loan, and which kind fits your business? covers the options.
How do you get a business line of credit?
Check your numbers, collect your statements, pick a lender type, compare the full cost and draw only what you need. In order:
- Check your numbers. Use the Business Loan Calculator: Monthly Payments and How Much You Can Borrow to see what a draw costs a month. Many lenders look for cash flow of about 1.25 times the payment.
- Collect recent bank statements. Ask each lender how many months it wants, because it varies.
- Pick a lender type by speed against price. Online lines open fastest and cost more, while banks and the SBA usually cost less and take longer.
- Compare the total cost with fees included. Get the maintenance, draw and non-use fees in dollars, and ask whether the quoted APR includes them.
- Draw only what you need. Interest runs only on the dollars you draw, though fees may still apply.
Frequently asked questions
What is a business line of credit?
A business line of credit is a revolving limit you draw against as needed. You pay interest on the amount drawn, repaid money becomes available again, and fees such as maintenance, draw and non-use fees are common. Typical lines run $10,000 to $250,000 (a typical range, not an offer).
Is it hard to get a business line of credit?
It is harder than a term loan of the same size, because the lender allows for you drawing the whole limit. Many online lenders look for about 12 months in business, steady deposits and a score near 625.
Can an LLC get a business line of credit?
Yes. Some online lenders lend only to corporations or LLCs. The LLC does not replace the owner's credit, though: most lenders still check personal credit and ask for a personal guarantee, and a new LLC still has to meet the time in business floors lenders publish.
What credit score do you need for a business line of credit?
It depends on the lender type, because lenders publish different minimums. Online lenders publish about 625, and banks 660 to 680 or higher. The SBA publishes no minimum score for 7(a) loans, and each lender sets its own. Floors were last checked September 24, 2026.
What is the monthly payment on a $50,000 line of credit?
Fully drawn and repaid over 12 months, a $50,000 line costs $4,442 a month at an example 12% APR and $4,874 at 30%. Total interest is $3,309 and $8,492. These are examples, not offers, and fees are extra. The calculator runs your own numbers.
Does a line of credit hurt your credit?
A lender's formal application can trigger a hard inquiry, which typically lowers a score by a few points. Checking your options with us doesn't affect your credit. We cannot say how any one lender reports a line or how a balance would move your score.
What fees come with a business line of credit?
Maintenance, draw and non-use fees are common, and they are not always in the advertised APR. Ask each lender for the fees in dollars, then add them to the interest before you compare.
Not sure whether a line of credit fits your business?
Answer a few questions and see the lending partners ready to make your business an offer. Checking your options doesn't affect your credit. TopFunders.ai is not a lender and not a loan broker, and the partners you see depend on your answers.
See the lending partners ready to make your business an offer
TopFunders.ai is not a lender, not a loan broker, and does not originate, underwrite, price or fund loans. We make no credit decisions. A match is not an approval: each partner makes its own decision and sets any amount, rate and terms. Costs, speeds and amounts are typical ranges unless marked as published, and lenders change their terms. Payments shown are examples with fees left out. Minimum scores, time in business and revenue are as published by lenders and last checked September 24, 2026.
Sources
- SBA, 7(a) loan program, including the 7(a) Working Capital Pilot (read October 4, 2026)
- SBA, types of 7(a) loans, including SBA Express (read October 4, 2026)
- Lender minimums: each lender's own website, read September 24, 2026 (named table in Business Loan Requirements by Lender (2026))