SMB Business Line of Credit
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BUSINESS LINE OF CREDIT
A line of credit could offer flexible financing for your business.
Find out if a business line of credit or other funding
options may be available to you—all with a single
search on our marketplace.
Search for financing
(without impacting your credit score)†
SoFi’s marketplace is owned and operated by SoFi Lending Corp. Expand for Advertising Disclosures.
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Advertising Disclosures: The
preliminary options presented on this
site are from lenders and providers
that pay SoFi compensation for
marketing their products and services.
This affects whether a product or
service is presented on this site. SoFi
does not include all products and
services in the market. All rates, terms,
and conditions vary by provider. See
SoFi Lending Corp. licensing
information below.
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Why shop SoFi’s marketplace for business financing?
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One simple search.
Explore your options in one place with no impact to your credit score.†
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Get up to $2 million.
Large or small, grow your business with funding that’s a fit for you.
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Fast funding.
Receive funds as soon as the same day you’re approved.*
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Save time.
Shop for quotes in minutes with just one
simple search.
Search for financing
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See if a business line of credit could be an option for you.
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Shop in one place.
Use our marketplace search to look for small business financing quotes.
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Discover your options.
Financing quotes may include lines of credit, term loans, and other options.
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Get funded.
You could receive funds as soon as the same day you’re approved.*
Search for financing
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What is a small business line of credit?
A small business line of credit, like a small business loan, is a flexible way
to cover short-term business expenses as needed. A line of credit works more like a credit card than a traditional loan. You can access financing through revolving credit up to an approved limit, rather than receiving an initial lump sum. You then make monthly payments on what you borrow and are only charged interest on what you owe.
With SoFi’s marketplace, one search could match you with a provider
and let you see if they offer a business line of credit.
Search for financing
(without impacting your credit score)†
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What’s the difference between secured and unsecured business lines of credit?
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‘Unsecured’,
‘No’,
‘Often higher’,
‘Frequently shorter-term; perhaps revolving’,
‘Typically smaller due
to risk for the lender’,
‘Usually harder’,
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Revolving versus nonrevolving lines of credit.
When you choose a business line of credit, you may be presented with
two options:
a revolving or nonrevolving line of credit.
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Revolving lines of credit
Revolving credit refers to a line of credit that you can access over and over again, subject to a total credit limit. Credit cards are one type of revolving credit.
Usually, revolving lines of credit have a higher interest rate and generally lower credit limit. The risk is typically higher for the lender. Once the credit is fully repaid, the account stays open and you can continue to use it as needed.
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Nonrevolving lines of credit
Nonrevolving credit allows you to access a specific amount of money
up front. Then you pay down your balance until it’s gone.
Usually, nonrevolving lines of credit have a lower interest rate and generally higher credit limit. The risk is typically higher for the borrower. Once the credit is fully repaid, the account closes and the borrower will need to reapply if they still need the credit line.
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FAQs
A business line of credit, sometimes called a commercial line of credit, like a small business loan is a flexible way to cover business expenses like working capital, bills, inventory, or any other business needs.
Unlike a business loan, where you receive a lump-sum disbursement upon account opening, small business lines of credit provide as-needed access to financing through a revolving line, similar to a credit card. Monthly payments are made on what you borrow.
A small business line of credit is similar to a credit card, but interest rates are usually lower and the funds must be used for business purposes. Like a credit card, you can borrow up to your approved credit limit and are only charged interest on what you borrow. There is a minimum repayment each month.
Once you repay the borrowed funds, you can continue to draw on the line up to your approved credit limit. A small business line of credit is subject to annual credit review.
Once you open your line of credit, you can use the money for almost any business expense. Most business lines of credit are used for short-term needs such as buying inventory, managing cash flow, or covering payroll. There is a minimum repayment plus interest every month, just as a credit card company would charge.
A secured line of credit uses an asset you already have, like company real estate, as collateral to secure the loan. If you default on payments, the lender has the right to seize that piece of collateral to offset their losses. In general, a secured line of credit puts the lender at less risk, but can result in higher approval rates or more favorable terms for you, such as lower interest rates.
With an unsecured line of credit, the lender takes more risk. If you default, there is no collateral to recoup the losses. Since this puts the lender at greater risk, an unsecured line of credit may be more challenging to obtain and carry higher interest rates.
To obtain a business line of credit, lenders are going to evaluate your business financials, including your business credit score, monthly (or yearly) revenue, and your time in business. Most lenders will want to see a minimum credit score of 600, annual revenues of $50,000 or more, and at least six months of business history. However, individual lender requirements may vary, so it is beneficial to shop your options.
It’s uncommon. Lenders generally prefer at least two years of operation and steady revenue before approving a business line of credit.
It varies by lender and their underwriting processes, with some applicants getting approved and receiving funds in less than a week, and others waiting for up to a month.
You can ask for a credit line increase after the account has been open for at least a few months. However, you may not be approved if any payments have been late.
Most lenders are wary of an applicant with bad credit because they fear you won’t be able to pay back any capital. However, if you have been in business for several years and can show consistent revenue, you could qualify.
SoFi now offers business credit cards to qualified applicants, pending credit approval.
See all FAQs
{/* What is SoFi’s marketplace? */}
What is SoFi’s marketplace?
SoFi’s marketplace is our way to help
members shop for business financing. While SoFi doesn’t provide business
loans directly, our marketplace may
help you quickly find the financing
solutions you need. You could find
quotes from providers in minutes with
one easy search.
Search for financing
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Search business financing options in minutes.
Your time matters. That’s why we
made it fast and easy to look for
quotes in minutes.
Search for financing
(without impacting your credit score)†
