Best Working Capital Lines of Credit in 2025
We compared LOCs to find the best options for common working capital needs. For personalized results, get matched from LendingTree’s network of 30+ business lenders.
| Lender | Starting rate | Amount | Term | Time in business | |
|---|---|---|---|---|---|
|
13.70% (with) | Not specified | 12 – 24 years | Not specified | |
|
6% + prime rate | testing | 12 – 24 months | 25 months | |
|
4.66% (suffix) |
$1k – $1.5M |
Not specified | 3 months |
Working capital line of credit lenders: More details
Best for: High-revenue businesses – Bluevine
- Starting rate
- 13.70%
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- Quick funding options
- Accepts fair credit scores
- Offers high-yield business checking account
- High annual revenue requirement
- Not available in Nevada, North Dakota or South Dakota
- Doesn’t list maximum interest rates
If your business is registered as an LLC or corporation and generates at least $10,000 a month, Bluevine’s line of credit could be for you. With flexible terms, low starting interest rates and quick funding options, Bluevine can be a great option for businesses who qualify. You can access up to Not specified on an as-needed basis to tackle a range of business expenses.
Bluevine also offers term loans up to $500,000 through financing partners, plus a high-yield checking account with competitive APYs.
Note that Bluevine’s financing isn’t available for sole proprietors or businesses located in Nevada, North Dakota or South Dakota.
In order to qualify, you’ll need to meet Bluevine’s criteria of:
- Minimum credit score: 625
- Minimum time in business:
- Minimum annual revenue:
Best for: Same-day funding – OnDeck
- Starting rate
- 6% + prime rate
rate other disclaimer
- Same-day funding available
- Fair to low credit accepted
- Prepayment discount
- Average interest rates run high
- Charges origination fees
- High annual revenue requirement
As one of our top picks for fast business loans, OnDeck can help you access quick cash for your business — with options for same-day business financing. Its lenient eligibility criteria make it a solid choice for low-credit borrowers and early-stage businesses, though you must have a robust cash flow to qualify. Since OnDeck reports to the major credit bureaus, on-time payments can help boost your business credit profile.
But while OnDeck offers quick funding for a wide range of credit scores, that comes at a price, as rates tend to run on the high side.
In order to qualify, you’ll need to meet OnDeck’s criteria of:
- Minimum credit score:
- Minimum time in business: 25 months
- Minimum annual revenue: 800000
Best for: Startups – Fundbox
- Starting rate
- 4.66%
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- Fair to low credit accepted
- Short time-in-business requirement
- Available in all U.S. states and many territories
- Short repayment terms
- Lower funding cap
- Doesn’t list maximum interest rates
Fundbox’s flexible line of credit is ideal for early-stage businesses and entrepreneurs needing startup financing to cover a range of startup expenses. With a speedy online application, funds could hit your bank account as soon as the next business day. You can choose your repayment plan with each withdrawal, although terms are relatively short compared to other lines of credit.
Note Fundbox’s credit limit caps at $1,500,000. While this may be enough for many startups, you may need to consider additional options to cover any funding gaps.
In order to qualify, you’ll need to meet Fundbox’s criteria of:
- Minimum credit score: 600
- Minimum time in business: 3 months
- Minimum annual revenue:
What is a working capital line of credit?
The term “working capital” refers to the cash you have on hand to cover your business’s day-to-day operations. Having adequate working capital allows you to keep your business afloat, while a surplus can help you grow and expand your business or explore new opportunities.
A working capital line of credit is a type of business financing designed to cover short-term operating expenses, such as rent, utilities, inventory, supplies, payroll or seasonal fluctuations in revenue.
Typically, working capital lines of credit are not used to cover one-time purchases or more expensive projects. In that case, a long-term business loan may be a better fit.
How does a working capital line of credit work?
Similar to a standard business line of credit, a working capital line of credit typically approves a credit limit based on your criteria and creditworthiness. However, your lender may not allow you to borrow more than your business’s current working capital. You can calculate your working capital by subtracting your company’s liabilities from its assets. So, if your company has around $50,000 in available working capital, your working capital line of credit may be capped at $50,000.
Once approved, you can use your working capital line of credit as you would a business credit card: You withdraw what you need, as often as you need it, up to your credit limit. In general, interest is only charged on the withdrawn amounts, although some lenders may charge additional withdrawal, maintenance or annual fees.
Since the credit line has a fixed limit, you do not need to fully pay off your balance to borrow again. Instead, once you make a payment, the available funds open up again. Some businesses choose to carry a balance during slow months, and then repay the debt during high-revenue seasons.
The advantage of a working capital line of credit versus a working capital loan is that you aren’t locked into a regular repayment schedule, nor do you have to use all of the available funds. You can keep your line of credit open for emergency expenses, avoiding ongoing interest charges as you would incur with a traditional term loan.
How to get a working capital line of credit
If you are ready to apply for small business financing, here are five steps to help you open a working capital line of credit.
1. Determine how much you need
Start by creating a business budget, listing your company’s current operating expenses and any anticipated costs you need to cover in the near future. Then, use a business loan calculator to estimate your borrowing power. Make sure that you can afford to repay the debt.
2. Evaluate your eligibility
While business loan requirements will vary by lender and loan type, you can expect to be evaluated based on your personal credit score and business credit score, how long your company has been operating 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. You can browse our library of small business lender reviews to get started.
4. Gather the required documentation
Having all your paperwork on hand can help speed along the application process. While the exact documents will vary, here’s a general idea of what you might need:
- A copy of your business plan
- Your business bank statements
- Your business tax returns
- Your governing documents and any applicable business licenses
- Collateral, if applying for secured financing
5. Apply for the line of credit
Applying for a working capital line of credit can usually be completed online, with a decision often made within minutes. In some cases, the lender may reach out to you to ask questions or request additional paperwork.
How to compare working capital lines of credit
You can usually apply to multiple lenders within a two-week period without further impact to your credit score. Additionally, you can consider using a marketplace platform, such as LendingTree or SmartBiz to see all your options listed in one place. Once you have several quotes or prequalification offers, take a look at the factors below to select the best option for your business needs.
Rates
Working capital interest rates can vary by lender, typically calculated based on your business’s financial profile. Some lines of credit charge a fixed, monthly fee, while others charge fixed or variable interest. Sometimes lenders may charge a factor rate instead.
Added fees
Extra fees can add to your cost of borrowing, such as draw fees or monthly maintenance fees. Some lenders may charge a prepayment penalty if you repay your debt early, while lenders like OnDeck offer a prepayment discount.
Repayment terms
With working capital lines of credit, repayment can happen on either a monthly or weekly basis. Make sure you can afford the repayments on time to reduce the risk of default.
Credit limit
Some lenders offer higher credit limits than others. Start with what you need and see if you can increase your credit limit down the road. If you need more substantial funds, such as if buying a franchise, you will likely need to consider an SBA loan or traditional bank loan.
Funding time
Some 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
Pros
- Ability to withdraw funds as needed to cover short-term or emergency expenses
- Only pay interest on withdrawn amounts rather than the total credit limit
- May offer a higher credit limit than a business credit card
- Options to help cover initial expenses when starting a business
Cons
- 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
Frequently asked questions
A working capital line of credit is a type of flexible funding meant to cover your business’s ongoing operating expenses, like inventory, supplies, utilities and payroll services. You can also use other types of business financing for working capital expenses, like an SBA 7(a) loan or a short-term business loan.
In general, lenders prefer for businesses to operate for one to two years before extending them credit. That said, many alternative lenders now work with startups after just several months of business history, with some even waiving the business history requirement altogether.
If you have an established business and a robust 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 improve your chances of approval. You can also use LendingTree Spring to monitor and boost your credit score, which may help secure a more competitive rate.
For those who can’t qualify for a line of credit, here are a some alternatives to consider:
Our methodology: How we chose the best working capital line of credit
We reviewed more than 20 lenders to determine the overall best seven working capital lines of credit. To make our list, lenders must meet the following criteria:
- Minimum credit score: Lenders on our list have minimum credit scores ranging from 560 to 680.
- 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 business coaching.