To get a business line of credit, estimate the amount you need, check your credit and repayment capacity, gather business and owner records, compare lenders’ terms, and apply directly with the lender. Requirements vary by lender and product: there is no universal minimum credit score, revenue level, or time-in-business threshold.
How to get a business line of credit
- Estimate the amount and explain its use. Identify the working-capital gap the line will cover, such as timing differences between paying suppliers and collecting invoices. Estimate a limit based on that need rather than borrowing the largest amount offered. The SBA advises applicants to know how much they need and how they will use it before approaching lenders (SBA Lender Match).
- Review credit and repayment capacity. Check personal and business credit histories for payment problems, judgments, and existing debt. Prepare to show how the business will repay draws from its cash flow. Lenders may also consider revenue, time operating, debt use, collateral, ownership and management, industry, and intended use. For SBA 7(a), the business must be creditworthy and demonstrate a reasonable ability to repay (SBA 7(a) loans).
- Gather the likely records. Compile the business identity and ownership information, financial statements, tax records, and owner or guarantor details described below. A lender will give you its actual checklist.
- Compare lenders and products. Ask about the interest rate and whether it can change, fees, collateral, personal guarantees, draw access, repayment schedule, maturity, renewal, grace periods, prepayment terms, and whether the lender can demand repayment. SBA recommends asking prospective lenders about rates, credit-score and cash-flow requirements, prepayment penalties, grace periods, and demand rights (SBA Lender Match).
- Apply through the lender. Conventional lenders set their own application processes. To pursue an SBA 7(a) line, apply through a participating lender; SBA does not lend directly to the borrower. SBA Lender Match can help identify interested lenders, but it is not an application and does not guarantee a match, offer, or approval.
- Read the agreement before drawing. Confirm the approved limit, rate basis, fees, maturity, repayment terms, guarantee and security documents, and how to access funds. A preliminary match or apparent fit with published eligibility criteria is not loan approval.
What lenders consider when deciding whether you qualify
Underwriting is lender- and product-specific. Common considerations include personal and business credit, payment history, revenue and cash flow, existing debt, time operating, collateral for secured products, ownership and management, industry, and the planned use of funds. Wells Fargo describes its assessment in terms of character, collateral, capital, conditions, and capacity; this is a framework, not a universal scoring formula (Wells Fargo business lines of credit).
Published minimums are examples of one lender’s current criteria, not market-wide rules. Chase lists at least $100,000 in annual business revenue and a FICO score of 660 for its Business Line of Credit. It also considers business location, ownership and management continuity, credit history, payment behavior, and business-only use; meeting its stated factors does not guarantee approval (Chase Business Line of Credit).
A traditional bank may expect a substantial operating history, but that is not a universal requirement. In a January 21, 2020 SBA blog post, contributor Marco Carbajo wrote that traditional banks typically require good personal credit and two years of business history with healthy revenue. Treat that as general guidance, not a current rule for every lender or product (SBA blog: What Is a Business Line of Credit and How Can You Get One?).
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SBA 7(a) eligibility
An SBA 7(a) borrower must be an operating, for-profit small business in the United States, fall outside SBA’s ineligible categories, be unable to obtain the desired credit on reasonable terms from other non-government sources, and be creditworthy with a reasonable ability to repay. The participating lender reviews the application and determines which documents the individual case requires (SBA 7(a) loans).
What documents and information to prepare
Start with this working checklist. A lender may request only some items or ask for additional information depending on the product, amount, and your relationship with it.
- Legal business name, address, phone number, tax ID, formation type, and ownership structure.
- Owners’ and guarantors’ identities, ownership percentages, personal-credit authorizations, and relevant personal financial information.
- Business start date, worker count, previous fiscal-year gross revenue, and requested credit amount.
- Current income statement and balance sheet; business and personal tax returns may also be requested.
- Formation documents and evidence that the business is in good standing.
- For some working-capital or asset-based facilities, accounts-receivable and accounts-payable aging reports and inventory reports.
For example, Chase says applicants may need a tax ID or SSN, good-standing documentation, financial statements, formation documents, tax transcripts, and business and personal tax returns; requirements can vary by amount and banking relationship. Wells Fargo lists two years of tax returns and year-end financial statements for its Prime Line. Neither lender’s document list should be treated as every lender’s checklist (Chase Business Line of Credit; Wells Fargo business lines of credit).
How to compare business line of credit offers
Compare the written terms for the actual offer, not just an advertised starting rate or maximum limit. A line of credit is revolving: it lets a business draw funds when needed, repay them, and potentially draw again subject to the agreement. Chase describes its product as “a revolving credit account that gives you access to cash to use when you need it” (Chase Business Line of Credit).
| What to compare | What to confirm |
|---|---|
| Rate | Interest rate, benchmark or index, margin, and whether the rate can change. |
| Fees | Annual, booking, draw, or other fees, including when they are charged and how they are calculated. |
| Collateral | Whether the line is secured, which business assets are pledged, and what happens if the business defaults. |
| Personal guarantees | Whether owners must guarantee repayment and which ownership percentages trigger a signature. |
| Access and limit | Approved limit, draw methods, availability rules, and whether access can be restricted. |
| Repayment and term | Payment schedule, maturity, renewals, grace period, prepayment terms, and any demand provisions. |
Published lender terms illustrate why details matter, but they can change and do not predict another applicant’s offer. Chase lists an annual fee of 0.25% of the approved line, with a $200 minimum and $750 maximum, and says owners or entities with 20% or more ownership must personally guarantee its line. Wells Fargo says its BusinessLine requires guarantees from owners at 25% or more, with a 51% combined minimum; its Prime Line is secured by specified business assets. Wells Fargo publishes a BusinessLine rate range of Prime + 1.75% to Prime + 9.75%, subject to credit evaluation. Check each lender’s current terms and your agreement before relying on these examples (Chase Business Line of Credit; Wells Fargo business lines of credit).
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When an SBA working-capital line may fit
The SBA 7(a) Working Capital Pilot is a monitored line-of-credit option for domestic and/or export financing. It may suit businesses with at least one year of operating history that can provide timely financial statements, receivable and payable aging reports, and inventory reports. The SBA identifies businesses fulfilling large contracts or borrowing against receivables or inventory as potential fits.
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As published on the SBA’s current program page, the Working Capital Pilot has a maximum loan amount of $5 million and a maximum maturity of 60 months. SBA’s guarantee is 85% for amounts of $150,000 or less and 75% for amounts above $150,000. These are program terms, not the borrower’s interest rate or a promise of approval; consult the SBA 7(a) program page for current terms and apply through a participating lender.
When a line of credit is the wrong tool
A revolving line can fit expenses that rise and fall or a temporary cash-flow gap because the business can draw what it needs rather than take one lump sum at once. If you need one fixed amount for a defined purchase or project, compare a term loan: its structure may better match a one-time expense and planned repayment. In either case, make sure expected business cash flow can support repayment before borrowing.
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