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The following lenders offer a business line of credit for newer businesses.
A business line of credit operates similarly to a credit card. It provides your startup with a set amount of funds that you can access as needed. When you draw on this line of credit, you’ll pay interest only on the amount used. The rest stays available for future needs. Repayments are made over an agreed term, and as you repay, your available credit replenishes, allowing you to use it for future business expenses. This cyclical nature makes a business line of credit a versatile financing option for managing cash flow, handling unexpected expenses, or capitalizing on new business opportunities.
1. Flexibility – A startup business line of credit offers unparalleled financial flexibility, allowing you to withdraw funds whenever necessary within your credit limit.
2. Interest on borrowed amount only – Unlike traditional loans, with a business line of credit for a new business, you pay interest only on the amount you borrow, not on the entire credit line.
3. Easy access to funds – A business line of credit for startups provides quick and easy access to funds, ensuring you can meet your financial needs promptly.
4. Builds business credit – Regular and responsible usage of your line of credit helps establish and enhance your business credit score, facilitating future financing.
If your business doesn’t match some of the qualifiers below, it may be more challenging to receive funding from our lending partners.
Lendio’s mobile app can help get your business ready for financing. Open a business bank account, get cash flow insights and stay connected to get updated when you have offers available.
Sure, you can go the bank route with a long application process and 75% rejection rate. But if you’re looking for financing in this lifetime, Lendio offers a faster, easier application process.
It’s secured with bank-grade encryption and SSL technology, so you know your information is safe.
We pair you with loan options from our network of 75+ lenders. Our dedicated funding managers can help you weigh the pros and cons of each option.
Once you’re approved, you’ll be able to access your capital in as little as 24 hours.
funded through us
lenders in our network
Sterling HannemannCo-Owner of Seven Brothers
Chloria ChandlerOwner of Bobbee O’s BBQ
A business line of credit, ideal for startups, is a flexible lending option that functions much like a credit card. It provides businesses with a predetermined credit limit, and they can draw funds as required, up to the stated limit. Interest is charged only on the drawn amount, not on the entire credit limit. It’s a revolving source of funds, meaning once you repay the money you’ve borrowed, that amount is again available for you to use. It’s an excellent way to handle unexpected expenses, manage cash flow, or fund small projects.
While you will need at least some time in business under your belt before you will qualify for a line of credit, there are lenders that will work with businesses that are six months to one year old that meet minimum monthly revenue and credit score requirements.
An unsecured business line of credit does not require collateral, making it a desirable option for startups. However, it’s important to note that lenders typically require a higher credit score for unsecured credit lines, and interest rates may be higher compared to secured options. Always carefully read and understand the terms before proceeding with any kind of credit line.
A business line of credit for startups can be used for a variety of operational expenses, such as purchasing inventory, covering payroll, and handling unexpected costs or emergencies. It’s also an excellent resource for taking advantage of business growth opportunities such as expansion, marketing campaigns, or new project launches. The versatility of a business line of credit makes it a valuable financial tool for startups.
*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (October 27, 2023). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.
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