Last reviewed by:
Brynne Conroy
July 27, 2022
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
| Pros | Cons |
|---|---|
Long repayment terms for a line of credit. No prepayment penalties. No credit score requirement. Relatively low annual revenue requirements. | High starting APRs Not available in all states. Only one lending product available: business lines of credit. |
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Headway Capital is an online lender who offers business lines of credit. Its lines of credit come with remarkably few fees and are available to those with less-than-perfect credit, but they are expensive in terms of APR. You may consider applying to Headway Capital if your business is relatively new with modest annual revenue.
Who is Headway Capital for?
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Business line of Credit | $5,000-$100,000 | 12, 18 or 24 months | Starting at 40.00% APR | 2% draw fee in most states |
The only product Headway Capital offers is a business line of credit. These lines of credit have long repayment terms, but high starting APRs. You can opt to make your payments weekly or monthly, and there are no prepayment penalties should you choose to pay your debt off early. In fact, the only fee you could end up paying is a 2% draw fee, but that only applies to certain states.
Minimum credit line amounts and fees vary by state. In most states, the minimum line of credit amount is $5,000, and your initial draw must be $500 or more. Applicants in the vast majority of states will also pay a 2% draw fee.
As of July 7, 2022, the following states have different terms for a Headway Capital line of credit:
| State | Draw fee | Loan amounts | Minimum first draw amount |
|---|---|---|---|
| Alabama | 2% | $5,000-$100,000 | $2,000 |
| Alaska | 2% | $25,100-$100,000 | $25,100 |
| California | 2% | $5,000-$100,000 | $5,000 |
| Colorado | None | $5,000-$100,000 | $500 |
| District of Columbia | 2% | $25,100-$100,000 | $25,100 |
| Florida | 2% | $25,100-$100,000 | $500 |
| Georgia | None | $5,000-$100,000 | $3,100 |
| Indiana | None | $5,000-$100,000 | $500 |
| Kentucky | 2% | $15,100-$100,000 | $15,100 |
| Maryland | 2% | $15,100-$100,000 | $15,100 |
| Massachusetts | 2% | $6,100-$100,000 | $1,000 |
| Mississippi | 2% | $5,000-$100,000 | $2,100 |
| Missouri | 2% | $5,000-$100,000 | $5,000 |
| New Jersey | None | $5,000-$100,000 | $500 |
| New Mexico | 2% | $5,100-$100,000 | $5,100 |
| Ohio | 2% | $5,100-$100,000 | $5,100 |
| Oklahoma | None | $5,000-$100,000 | $500 |
| Oregon | 2% | $50,100-$100,000 | $50,100 |
| South Carolina | 2% | $7,600-$100,000 | $7,600 |
| Virginia | 2% | $5,000-$100,000 | $5,000 |
| Headway Capital | OnDeck | Funding Circle | |
|---|---|---|---|
| Minimum credit score | None | 600 | 660 |
| Loan products offered |
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| Time to funding | As soon as the next day. | As soon as the same day. | As soon as the next day. |
| Starting APR | 40.00% APR | 29.90% APR | 10.99% APR |
| Maximum loan size | $100,000 | $100,000 | $100,000 |
| Minimum annual revenue | $50,000 | $100,000 | $120,000 |
There are many online lenders that offer business lines of credit, and many of these lenders offer a wider range of business loan options than Headway Capital. Headway Capital tends to have less fees than other lenders and more flexible credit history requirements, but it also charges noticeably higher ARPs than the competition.
At first glance, OnDeck may look cheaper than Headway Capital with its lower APRs. It may well be, depending on how much you’re borrowing against your line of credit and your creditworthiness. But OnDeck business lines of credit come with an additional $20 monthly fee, in addition to requiring double the annual revenue. Terms are only 12 months compared to terms of up to 24 months at Headway Capital. OnDeck does offer term business loans where Headway Capital does not.
Funding Circle has much stricter lending requirements than Headway Capital in terms of credit score and annual revenue requirements, but it also offers dramatically lower APRs. If you qualify, Funding Circle could be a less expensive way to borrow. However, like OnDeck, Funding Circle charges a $20 per month fee, and a 5% late fee if you are late on any payments. These fees could eat into your APR savings, but you’d have to run the math on the specific offers you receive from each lender based on your credit profile. Funding Circle not only offers term loans, but also SBA 7(a) loans which tend to have lower interest rates.
