What is a business line of credit in plain English?

A business line of credit is a pre-approved pool of money you can draw from, repay, and re-draw at will — like a credit card without the card. You only pay interest on the amount you've drawn, not the total limit. Most LOCs come with a 6–24 month draw period and a 6–60 month repayment period on each draw.

What APR can I expect on a business LOC?

Bank LOCs (BofA, Chase, Wells Fargo) run prime + 1.5% to 7% — currently around 10–15% APR. Fintech LOCs like Bluevine start at 6.2% but the average customer pays 15–27%. Higher-bar-passing-but-thinner-file LOCs like Fundbox often work out to 30–60% APR-equivalent on short draws.

How fast can I get a business line of credit?

Fintech LOCs (Bluevine, Fundbox, OnDeck) approve in 24 hours and fund the first draw in 1–3 business days. Amex Business Blueprint approves in minutes for existing cardholders. Traditional bank LOCs take 1–4 weeks from application to first draw.

What credit score do I need for a business LOC?

Fintech LOC minimums sit at 600–640. Bank LOCs typically want 670–700+. The lowest-bar option is Fundbox at 600. Anything below 600 you're usually pushed into an MCA, term loan, or revenue-based financing structure instead of a true revolving LOC.

Is an LOC better than an MCA?

Almost always yes if you qualify. An LOC at 15% APR costs ~$3,750 on a $25,000 draw over 12 months. The same $25,000 advance from an MCA at factor 1.32 costs $8,000 — over 2x the price. Plus the LOC is revolving, so you only borrow what you need when you need it.

Does an LOC build my business credit?

Yes — Bluevine, OnDeck, and traditional bank LOCs report to commercial credit bureaus (Dun & Bradstreet, Experian Business, Equifax Business). Consistent on-time payments on a revolving LOC are one of the fastest ways to build business credit scores like PAYDEX.

What's the difference between a secured and unsecured LOC?

An unsecured LOC has no specific collateral pledged — most fintech LOCs and small bank LOCs ($100K and under) are unsecured. A secured LOC pledges specific collateral (real estate, equipment, inventory, AR) and typically offers higher limits and lower APR in exchange. For $250K+ LOCs at the best rates, expect a collateral requirement.

Can I have a business LOC and an MCA at the same time?

Technically yes, but most MCA contracts have anti-stacking clauses that consider any new credit facility a default. If you have an active MCA, getting an LOC could trigger default. Conversely, having an existing LOC does not block an MCA application but funders may reduce the offered amount.

Business Line of Credit: Best LOCs, Real APRs & How to Qualify (2026)

A business line of credit is the cheapest flexible capital available to most established small businesses — revolving access at 6.2–30% APR, draw what you need, pay interest only on what you use. Here's how it works, who actually approves quickly in 2026, and how to pick between Bluevine, OnDeck, Fundbox, and the bank options.

TL;DR

A business line of credit is a pre-approved revolving pool of capital you can draw from, repay, and re-draw — paying interest only on what you use. Typical limit: $10K–$250K. APR ranges 6.2–30%. Approval in 24 hours to 4 weeks depending on lender. Best for established merchants (12+ months, 600+ credit) with fluctuating capital needs; almost always cheaper than an MCA and faster than an SBA loan.

What is a business line of credit?

A business line of credit (LOC) is a pre-approved pool of capital your lender makes available to your business. You can draw from it whenever you need cash, repay over time, and re-draw as the balance frees up — similar to a credit card, but without a physical card and usually with materially lower APR.

Two numbers define every LOC: the credit limit (the maximum you can have outstanding at any one time) and the APR (charged only on the amount currently drawn). A $100K LOC at 12% APR with $25K drawn costs roughly $250 in interest per month — you pay nothing on the unused $75K.

LOCs split into two structural flavors. A revolving LOC lets you draw and re-draw indefinitely (subject to periodic renewal). A non-revolving LOC (also called a draw line) lets you draw a fixed pool over a window — once drawn, you can't re-borrow that capital. Bluevine, OnDeck, Fundbox, and most bank LOCs are revolving. Some construction or growth lines are non-revolving.

How a business line of credit works

You apply once with business bank statements, EIN, owner info, and (for bank LOCs) tax returns and a business plan.
The lender approves a credit limit based on revenue, time in business, credit, and existing debt. Typical limits: $10K–$250K for fintech LOCs, $25K–$500K for bank LOCs, $500K+ with collateral.
You draw funds as needed via dashboard transfer (Bluevine, Fundbox), debit card (OnDeck), or check (bank LOCs). Funds usually hit your account same-day or next-day.
You make scheduled payments on the drawn balance — typically weekly (fintech) or monthly (bank). Each draw has its own repayment schedule, commonly 6–24 months.
The credit refreshes as you repay principal. The available balance restores; you can re-draw immediately on most revolving LOCs.
The line renews periodically — bank LOCs annually, fintech LOCs every 6–12 months. Renewal sometimes increases your limit based on payment history.

How much does a business LOC cost?

Pricing varies by lender type and your qualifying profile. Below: real APR ranges across the major LOC categories.

LOC type	Typical APR	Origination fee	Min credit
Bank LOC (BofA, Chase, Wells)	10 – 17%	0 – 1%	670+
SBA Express LOC	Prime + 4.5–6.5%	2 – 3.5%	680+
Fintech LOC (Bluevine)	6.2 – 27%	0 – 1.5%	625+
Lower-bar fintech LOC (Fundbox)	30 – 60% equiv.	0%	600+
Embedded (Amex Business Blueprint)	3–9% monthly fee	0%	640+

On top of APR, watch for: annual maintenance fees ($150–$300 on bank LOCs), draw fees (1.5% per draw on some fintech lines), and inactivity fees if you don't use the line over a 6–12 month window.

The honest cost comparison: a $50,000 LOC drawn fully for 12 months at 15% APR costs ~$7,500. The same $50,000 advance from a typical B-paper MCA at factor 1.32 costs $16,000. That's why qualifying for an LOC, even at 27% APR, is almost always better than an MCA.

Best for / Not best for

Best for

Established merchants (12+ months, 600+ credit, $8K+/mo)
Fluctuating cash needs — inventory cycles, seasonal swings
Short bridge financing (30–180 day cash gaps)
Anyone considering an MCA who hasn't tried qualifying for an LOC first
Building business credit via on-time payment history

Not best for

Newer businesses (under 6 months in business)
Lump-sum capex with multi-year payback (use SBA or term loan)
Buying real estate or acquiring a business (use SBA 7(a) or 504)
Equipment purchases (cheaper via equipment financing)
Businesses with very poor cash flow or active MCAs (stacking risk)

Top business LOC providers for 2026

We rank LOC providers on: APR ranges actually offered (not just published floors), speed to first draw, ease of re-draw, qualifying bar, and quality of dashboard / draw experience.

Lender	Best for	Limit	APR	Speed	Min credit
Bluevine	Cheapest revolving capital for established merchants	$10K – $250K	APR 6.2% – 27%	1 – 3 business days	625+	Apply →
OnDeck	Same-day funding from a known direct lender	$6K – $200K (LOC)	APR 30%+ on LOC	Same-day approved files	600+	Apply →
Fundbox	Lower bar — newer businesses + thinner files	$1K – $150K	APR-equivalent typically 30–60%	As fast as 1 day	600+	Apply →
Amex Business Blueprint	Existing Amex Business cardholders	$2K – $250K	Monthly fee 3 – 9%	Approval in minutes	640+	Apply →
Bank of America Small Business	Bank-relationship LOC at lowest non-SBA rates	$10K – $100K+	Prime + 1.50% to 6.50%	1 – 4 weeks	670+	Apply →
Wells Fargo Small Business	Unsecured LOC for Wells Fargo customers	$5K – $100K	Prime + 1.75% to 7%	1 – 4 weeks	680+	Apply →
Capital One Business	Capital One business cardholders	$10K – $5M (varies by program)	Prime + 2% to 8%	1 – 3 weeks	660+	Apply →

Advertiser disclosure: Fundnode may earn referral fees from funders listed when you apply through us. This does not affect editorial rankings — see our methodology.

How to apply for a business LOC

The fintech LOC application takes 15 minutes. The bank LOC application takes 1–3 hours of doc gathering plus an in-person or video meeting.

Gather your last 6 months of business bank statements. Both fintech and bank LOCs underwrite primarily against deposit patterns and ending balances. Print clean PDFs from your bank — no screenshots.
For bank LOCs, pull 2 years of business tax returns (Form 1120, 1120S, or 1065 + K-1) plus a YTD P&L and balance sheet. Bluevine, Fundbox, OnDeck don't usually require tax returns.
Know your business credit position. Pull your D&B, Experian Business, Equifax Business reports — most LOC underwriters check at least one. Free pulls via Nav.
Apply at 1–2 lenders, not 5. Multiple hard inquiries within 30 days can ding your personal credit. Use our matching quiz to narrow first.
For Bluevine/OnDeck: connect your business bank account via Plaid for instant verification. This shortens underwrite from 2 days to a few hours.
Negotiate the limit, not just the rate. A higher limit you don't use is free; a higher APR you do pay isn't. Ask for 25% above your typical need.

Alternatives to a business line of credit

If you can't qualify for an LOC, or an LOC doesn't fit the use case, here are the next-best options:

SBA 7(a) loan — for $250K+ at the lowest possible APR. Takes 30–90 days but cheaper than any LOC for large amounts.
Merchant cash advance — only if you can't qualify for an LOC. Credibly, Forward Financing, Greenbox. Factor 1.18–1.45.
Equipment financing — for specific titled equipment. Lower APR than LOC because the equipment is collateral.
Invoice factoring — for B2B businesses with creditworthy customers and slow-paying invoices.
Business credit cards — Amex Business Platinum, Capital One Spark. 0% intro APR on purchases for 9–15 months is sometimes cheaper than any LOC for short-term spend.

See our full breakdown of MCA vs line of credit for the head-to-head economics.

Frequently asked questions

What is a business line of credit in plain English?: A business line of credit is a pre-approved pool of money you can draw from, repay, and re-draw at will — like a credit card without the card. You only pay interest on the amount you've drawn, not the total limit. Most LOCs come with a 6–24 month draw period and a 6–60 month repayment period on each draw.
What APR can I expect on a business LOC?: Bank LOCs (BofA, Chase, Wells Fargo) run prime + 1.5% to 7% — currently around 10–15% APR. Fintech LOCs like Bluevine start at 6.2% but the average customer pays 15–27%. Higher-bar-passing-but-thinner-file LOCs like Fundbox often work out to 30–60% APR-equivalent on short draws.
How fast can I get a business line of credit?: Fintech LOCs (Bluevine, Fundbox, OnDeck) approve in 24 hours and fund the first draw in 1–3 business days. Amex Business Blueprint approves in minutes for existing cardholders. Traditional bank LOCs take 1–4 weeks from application to first draw.
What credit score do I need for a business LOC?: Fintech LOC minimums sit at 600–640. Bank LOCs typically want 670–700+. The lowest-bar option is Fundbox at 600. Anything below 600 you're usually pushed into an MCA, term loan, or revenue-based financing structure instead of a true revolving LOC.
Is an LOC better than an MCA?: Almost always yes if you qualify. An LOC at 15% APR costs ~$3,750 on a $25,000 draw over 12 months. The same $25,000 advance from an MCA at factor 1.32 costs $8,000 — over 2x the price. Plus the LOC is revolving, so you only borrow what you need when you need it.
Does an LOC build my business credit?: Yes — Bluevine, OnDeck, and traditional bank LOCs report to commercial credit bureaus (Dun & Bradstreet, Experian Business, Equifax Business). Consistent on-time payments on a revolving LOC are one of the fastest ways to build business credit scores like PAYDEX.
What's the difference between a secured and unsecured LOC?: An unsecured LOC has no specific collateral pledged — most fintech LOCs and small bank LOCs ($100K and under) are unsecured. A secured LOC pledges specific collateral (real estate, equipment, inventory, AR) and typically offers higher limits and lower APR in exchange. For $250K+ LOCs at the best rates, expect a collateral requirement.
Can I have a business LOC and an MCA at the same time?: Technically yes, but most MCA contracts have anti-stacking clauses that consider any new credit facility a default. If you have an active MCA, getting an LOC could trigger default. Conversely, having an existing LOC does not block an MCA application but funders may reduce the offered amount.