Best Working Capital Lines of Credit in March 2024

Working capital lines of credit can help you cover operating expenses like inventory or supplies.

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Best working capital lines of credit

By Tara Mastroeni | Edited By Abigail Bassett and Janet Schaaf | February 27, 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderUser ratingsBest for…Max. loan amountTerm lengthMin. interest rateTime in business
User ratings coming soonShort-term funding$250,0006, 12 or 24 months3.00% to 9% 6-month loans
6% to 18% for 12-month loans
9% to 27.00% for 18-month loans
12 monthsGet business loan offers
Not applicableSBA working capital line of credit$5,000,000120 monthsCapped at Prime +3.00%24 monthsGet business loan offers
User ratings coming soonHigh-revenue businesses$250,0006 or 12 months6.20% for 26-week term24 monthsGet business loan offers
5 starsSame-day funding$100,00012, 18 or 24 months39.90%*12 monthsGet business loan offers
Fundbox logo5 starsNewer businesses$150,00012 or 24 weeks4.66% for 12-week terms
8.99% for 24-week terms
6 monthsGet business loan offers
User ratings coming soonBusinesses seeking longer loan terms$100,000 for unsecured
$250,000 for secured
Up to 36 months for unsecured
Up to 60 months for secured
Not disclosedNoneGet business loan offers
Learn more about how we chose our picks.

Working capital line of credit lenders at a glance

American Express Business Line of Credit: Best working capital line of credit for short-term funding

Loan amounts$2,000 to $250,000
Starting interest rate
  • 3.00% for 6-month lines of credit
  • 6% for 12-month lines of credit
  • 9% for 18-month lines of credit
Term length (months)6, 12 and 24 months
Minimum credit score660
Minimum time in business12 months
ProsCons

 Quick application process

 No prepayment penalty

 Shorter time in business requirement

 Must link to a business bank account to determine eligibility

 Requires a personal guarantee

 Higher minimum credit score requirement

Small Business Administration: Best working capital line of credit for SBA products

Loan amountsUp to $5,000,000
Starting interest ratePrime + 3.00%
Term length (months)120 months
Minimum credit score680 (recommended)
Minimum time in business24 months (recommended)
ProsCons

 Ability to choose between a term loan and line of credit

 Capped interest rates

 Borrowers who wouldn’t be approved by traditional lenders may qualify.

 May require a personal guarantee

 Collateral may be required

 May have longer funding times than other lenders

Bluevine: Best working capital line of credit for high-revenue businesses

Loan amountsUp to $250,000
Starting interest rate6.20% for the 26-week period
Term length (months)6 or 12 months
Minimum credit score625
Minimum time in business24 months
ProsCons

 Same-day funding available

 Quick funding decision

 Decently competitive interest rate

 High annual revenue requirement

 Not available in all states

 Higher minimum credit score requirement

OnDeck: Best working capital line of credit for same-day funding

Loan amounts$6,000 to $100,000
Starting interest rate39.90%*
Term length (months)12, 18 or 24 months
Minimum credit score625
Minimum time in business12 months

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.
ProsCons

 Same-day funding available

 Shorter time in business requirement

 Lower annual revenue requirement

 Lower funding cap

 Doesn’t publish starting interest rate

 Requires a business bank account

Fundbox: Best working capital line of credit for newer businesses

Loan amountsUp to $150,000
Starting interest rate4.66%
Term length (months)3 or 6 months
Minimum credit score600
Minimum time in business6 months
ProsCons

 Shorter time in business requirement

 Relatively low starting interest rate

 Lower minimum credit score

 Lower funding cap

 Short loan terms

 Only available to businesses based in the U.S.

Truist: Best working capital line of credit for businesses seeking longer loan terms

Loan amounts$3,500 to $250,000
Starting interest rateNot disclosed
Term length (months)Up to 60 months
Minimum credit scoreNot disclosed
Minimum time in businessNone, but additional paperwork may apply if you’ve been in business less than 24 months
ProsCons

 Longer loan terms available

 No annual revenue requirement

 No time in business requirement

 Doesn’t disclose minimum credit score requirement

 Doesn’t disclose starting interest rate information

 Larger loan amounts will require collateral

What is a working capital line of credit?

A working capital line of credit is a type of business line of credit that’s meant to cover short-term operating expenses. You can use a working capital line of credit to cover costs, such as rent and utilities, inventory, supplies, emergency expenses or payroll.

Typically, working capital lines of credit are not used to cover large one-time purchases. If you need that type of funding, a business term loan is likely going to be a better fit instead.

How does a working capital line of credit work?

A working capital line of credit is a type of revolving business funding. Unlike a working capital loan, where you receive the funds in a single, lump-sum payment, this type of financing allows you to borrow money on an as-needed basis, up to a set credit limit.

After you borrow the funds and repay the borrowed amount, you can withdraw against the line of credit again. Additionally, you’ll only pay interest on the amount that you’ve borrowed.

How to get a working capital line of credit

Here’s how to get a working capital line of credit in five steps:

1. Determine how much you need to borrow

Start by making a list of your company’s current operating expenses, plus any emergent costs that you need to cover in the near future. Then, use a business loan calculator to estimate your borrowing power and make sure that a new regular payment will fit comfortably within your budget.

2. Evaluate your eligibility

Each lender will have their own business loan requirements. However, as a rule of thumb, your loan application will typically be evaluated based on your personal credit score and business credit score, the amount of time that your company has been in business, and the amount of annual revenue you bring in each year.

3. Research potential lenders

Both traditional banks and online business lenders offer lines of credit. Be sure to research a few different options to find the lender that works best for you. Take some time to compare their interest rates, repayment terms and fees.

The list above should help you get started, but feel free to browse our library of small business lender reviews if you need more inspiration.

4. Gather the required documentation

Next, it’s time to pull together some financial documentation. Having all your paperwork on hand will go a long way toward speeding up the application process. Typically, you’ll need a copy of your business plan, your business bank statements, your business tax returns, your governing documents and any applicable business licenses. If you’re planning on choosing a secured loan, you’ll also need paperwork for the asset that you plan to use as collateral.

5. Apply for the line of credit

Applying for a working capital line of credit is usually fairly simple. It can often be done online and sometimes you’ll receive a lending decision just minutes after submitting your paperwork. In other cases, the lender may reach out to you later to ask questions or request additional paperwork.

How to compare working capital lines of credit

Shopping around for a working capital line of credit is essential to finding one with terms that work well for you. Here’s a look at what to compare as you sort through your different lending options.

Rates: Business loan interest rates are based on the strength of your business’s financial profile and can vary from lender to lender. Sometimes lenders may charge a factor rate instead.

Added fees: You’ll want to be sure to ask each lender what fees they charge. Working capital lines of credit often come with draw fees or monthly maintenance fees, which can add to your cost of borrowing.

Repayment terms: With working capital lines of credit, repayment can happen on either a monthly or weekly basis. Make sure you can afford to make the repayments on time to reduce the risk of default.

Credit limit: Some lenders offer higher credit limits than others. Make sure that you pick a lender who will lend you enough funding to meet your needs.

Funding time: A few lenders have the ability to deposit funds into your account the same day your application is approved. For others, the process can take a few days to complete.

Pros and cons of a working capital line of credit

Like any financial decision, taking out a working capital line of credit has its own advantages and disadvantages. Let’s take a look at what to expect.

ProsCons

 Ability to withdraw funds as needed to cover expenses

 Only pay interest on the amount that you borrow rather than the total credit limit

 May offer a higher credit limit than a business credit card

 Not meant for large purchases or long-term expenses

 May need to provide collateral or a personal guarantee

 Additional fees can increase the cost of borrowing

How we chose the best working capital line of credit

We reviewed more than 15 lenders to determine the overall best six working capital lines of credit. To make our list, lenders must meet the following criteria:

  • Minimum time in business of six months
  • Minimum credit score of 600
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Best working capital line of credit summary

Frequently asked questions

A working capital line of credit is a type of business line of credit that’s meant to cover operating expenses, like inventory, supplies, utilities, and payroll.

Most lenders prefer that you have a two-year business history before they approve you for a working capital line of credit. But it’s possible to find lenders with a shorter time in business requirement or even no firm requirement at all.

If you have an established business and a strong credit profile, you’ll have an easier time qualifying for a working capital line of credit. Startups and those with bad credit may need to choose their lenders carefully. Be sure to evaluate each lender’s requirements before applying to increase your odds of being approved.