Average Business Line of Credit Rates in 2026
Median interest rates on new business lines of credit have decreased year-over-year, with some benchmarks falling by more than a full percentage point.
As of Q1 2026 — the most recent data available from the Federal Reserve Bank of Kansas City (Kansas City Fed) — new fixed-rate business lines of credit from urban banks are being offered at a median rate of 6.90% APR, while urban variable-rate business lines of credit clock in at a median of 7.27%.
Actual offers on business lines of credit and small business loans vary substantially based on the lender you choose, your business’s financial standing and credit profile and other factors including collateral and fees.
Below, learn more about current business line of credit rates, factors affecting the rate for which you might qualify and what other factors to consider when comparing offers.
- The median rate for a new fixed-interest business line of credit from an urban bank is 6.90% per Q1 2026.
- Factors like the type of lender you work with and the operational history of your business can impact the rates you qualify for.
- Keep an eye out for additional costs, such as draw fees, origination fees or maintenance fees.
What is the average business line of credit interest rate?
As of Q1 2026, the median rate on a fixed-rate business line of credit from an urban bank is 6.90%. For variable-rate loans, that median rate increases to 7.27%.
| Rate type | Current rate | Data period | What it represents |
|---|---|---|---|
| Fixed-rate business line of credit from an urban bank | 6.90% | Q1 2026 | New business lines reported by 96 surveyed banks |
| Variable-rate business line of credit from an urban bank | 7.27% | Q1 2026 | New business lines reported by 96 surveyed banks |
These benchmarks, sourced from the Kansas City Fed’s most recent small business lending survey, may differ from the rates advertised by lenders online. Lender advertisements sometimes use different pricing formats, such as prime-plus rates or factor rates.
Additionally, businesses with limited operating history or weaker credit profiles might receive higher-cost offers. (More on how to score a lower rate below.)
Current business line of credit rates
Rates can change frequently based on the prime interest rate, the specific line of credit product on offer (including whether it’s a secured or unsecured line of credit), whether you’re shopping with traditional versus online lenders, whether rates listed are APR or factor rates and more.
This sampling of current rates from popular lenders is far from comprehensive. As you can see, rates vary widely — and, again, are subject to change.
| American Express Business LOC | 0.55% |
| BlueVine | 7.80% |
| Fora Financial | 3.00% (factor rate) |
| Fundible | 7.00% |
| iAdvance Now | 4.99% |
| OnDeck | 39.60% |
| SBG Funding | 4.50% |
| Taycor FInancial | 1.01% (factor rate) |
| TD Bank | 6.50% |
| U.S. Bank | 9.99% |
| Wells Fargo | 7.50% |
What affects your business line of credit rate?
While the prime rate and benchmark rates provide a starting point, the offers your business might receive depend on a variety of factors. These include both business-specific considerations, such as how long you’ve been operating, and external influences, like the type of lender you choose and market conditions.
- Lender type: Traditional banks, credit unions, SBA lenders and online lenders may all price their lines of credit differently. Respondents to the Small Business Credit Survey cite higher interest rates among online lenders as a factor decreasing their satisfaction, for example; meanwhile, SBA lenders may be able to help businesses access loans at a lower cost than commercial alternatives.
- Credit and business finances: Lenders are likely to consider both personal and business credit history, as well as the company’s cash flow, revenue and existing debt.
- Time in business: Time in business is another important factor for lenders. Many have minimum time-in-business thresholds (often six to 12 months, but sometimes more) and, in general, more operating history may translate to higher chances of qualifying and better loan terms.
- Collateral: A secured business line of credit, in which you put down collateral, may come with lower interest rates and less-stringent requirements than an unsecured line of credit, which is a riskier prospect for the lender.
- Variable-rate terms: Variable rates can, as their name suggests, change over time. While that means rates may drop if the prime rate drops, it also means they can increase if the prime rate increases.
Look beyond the interest rate when comparing offers
While shopping for the lowest rate is intuitive (and can legitimately save you money), the lowest advertised rate isn’t always the least expensive option. It’s important to consider all of the costs of a loan before making a decision.
| Cost or term to compare | Why it matters |
|---|---|
| APR or interest rate | Confirm what fees the lender includes and whether the rate is fixed or variable |
| Draw fees | Frequent draws can increase total borrowing costs |
| Annual or maintenance fees | May apply even when the line is unused |
| Repayment structure | Some lenders treat each draw as a separate loan, while others use one revolving balance |
| Rate type | Factor rates and periodic fees should be evaluated by total repayment cost, not compared directly with APR |
When negotiating with lenders and considering a new business line of credit:
- Ask for the full fee schedule, including interest as well as any maintenance, origination or draw fees
- Double-check the quoted rate type, whether it’s expressed as an APR or factor rate
- Confirm whether the rate can change or if it’s a fixed-rate line of credit
- Compare offers, keeping in mind structure variances such as draw amounts and repayment timelines
How to get a lower business line of credit rate
Some factors affecting the interest rates on business lines of credit, like market conditions, are outside of your control. But others, like your personal and business credit score, offer you agency in improving your qualification chances and offers.
Here are some simple tips for increasing your odds of getting a lower business line of credit rate.
- Compare offers from multiple lender types. As mentioned above, different types of lenders offer different fee schedules. Shopping around can help you understand what’s available.
- Build personal and business credit before applying, if possible. Both credit histories can improve your odds of qualifying for a loan at a lower interest rate.
- Consider whether a secured line or existing banking relationship is appropriate. A line of credit secured by collateral may carry lower interest rates than an unsecured loan, and banks sometimes offer incentives and discounts to existing customers or members considering a new line of credit.
- Consider an SBA loan or line of credit. These government-backed financing products may come at a lower cost than other types of business funding.
- Match the product to the need. While a business line of credit offers flexible funding as needed, a term loan may be more cost-effective for a single large purchase. Along with their lower benchmark interest rates, term business loans can also help borrowers avoid slipping into a debt cycle with a revolving balance.
Frequently asked questions
The median interest rate on a new business line of credit is 6.90% as of the first quarter of 2026. Maintaining a strong borrower portfolio, including steady business revenue and good personal credit, can help businesses qualify for the best possible rates.
In a business line of credit, interest usually applies only to borrowed, or “drawn,” funds. However, other fees, such as annual or maintenance fees, may apply to the account in general. Additionally, some lenders charge draw fees for each instance funding is borrowed from the line.
Business lines of credit are available with both fixed and variable interest rates. Many are variable — and borrowers considering a variable-rate business line of credit should review the index the lender uses (often the prime rate), the margin (usually a percentage amount added to the index) and adjustment timing, as well as any rate caps or floors.
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