How do I get a business line of credit?

Reviewed by Turan Zeynal, Managing Partner, Outset Funding Partners · Last reviewed July 17, 2026

TL;DR

To get a business line of credit, you'll need at least 6 months in business (2+ years for bank LOCs), $100,000+ in annual revenue, a 600+ personal FICO (680+ for banks), and 3–12 months of business bank statements. Online LOCs can approve in 1–5 days; bank LOCs take 3–8 weeks. The single biggest lever is clean bank statements — no overdrafts, no NSFs, positive average daily balance.

Quick facts

Time in business: 6+ months (online) / 2+ years (bank)
Annual revenue: $100,000+
Personal FICO: 600+ (online) / 680+ (bank)
Bank statements: 3 – 12 months
Speed: 1 – 5 days (online) / 3 – 8 weeks (bank)
Typical limit: $10,000 – $500,000

The 60-second answer

Getting approved for a business line of credit comes down to five signals: time in business, revenue, personal credit, bank statement health, and existing debt. Every lender weights these differently — banks lead with credit, online lenders lead with revenue — but all five matter.

The single most controllable factor is bank statement quality. A borrower with 620 FICO and clean statements will out-approve a 680 FICO borrower with three NSFs in the last 60 days.

How it works, step by step

Clean up your bank statements
For 60–90 days before applying: no overdrafts, no NSFs, positive average daily balance. This is the single biggest lever.
Pull your personal and business credit
Get your FICO and D&B / Experian Business reports. Dispute errors before applying. Pay any personal credit balances below 30% utilization.
Assemble documents
Application, driver's license, EIN letter, void check, 3–6 months of business bank statements (12 for banks), and last year's tax return.
Apply to 2–3 matched lenders
Not 10. Multiple hard credit pulls in a short window damage your score. Work with a broker or marketplace that soft-pulls first, then submits to the right final lenders.
Compare offers on all-in cost
APR, draw fees, monthly maintenance fees, and prepayment penalties. A 12% APR with a 3% draw fee is often more expensive than a 15% APR with none.

What actually gets a business LOC approved

Three things move the needle far more than owners expect. First, the average daily balance in the business bank account over the last 90 days — not revenue, not top-line deposits, but the balance the underwriter sees when they sample the account. A business doing $60K a month that keeps a $4,000 average balance approves; one doing the same revenue with a $200 average balance often doesn't. Second, the ratio of deposits to withdrawals. Consistent inflow with disciplined outflow reads as a well-run business; a statement full of ATM cash and person-to-person transfers reads as messy and gets declined. Third, existing debt already reporting to business bureaus — one or two open, well-paid tradelines carry more weight than a decade of clean personal credit alone.

A tactical pre-application checklist: pull the last four months of business bank statements and remove any red flags you have time to fix (transfer personal expenses out of the account, cover any negative days, avoid new large one-time deposits that make revenue look inflated). Update your D-U-N-S profile so revenue and employee counts match your tax return. Have the last two years of business tax returns in PDF ready to attach. Lenders that ask for these upfront and get clean answers approve in 24–48 hours; ones that have to chase you for pieces take a week and often stall.

Pros and cons

Pros

✓Approval possible with 6 months in business and 600 FICO
✓Clean bank statements can offset middling credit
✓Multiple lenders — you have negotiating leverage
✓Some LOCs approve without collateral
✓Approval builds business credit for future funding

Cons

×Under 600 FICO, most LOC lenders decline
×Under $100K annual revenue, approved limits are small
×Hard credit pulls can add up if you apply everywhere
×Some lenders require a UCC-1 filing (blanket lien) even for unsecured LOCs
×Renewal is not automatic — declining revenue can shrink your limit

Who qualifies

•US-based business, 6+ months in operation
•$100,000+ in annual revenue
•600+ personal FICO (680+ for bank LOCs)
•Active US business bank account with 3+ months of history
•No active bankruptcy or open tax liens
•Positive average daily bank balance

Where to apply

Option	When to use	Watch out for
Your primary bank	You have 2+ years, strong credit, and want the lowest rate	Slowest process (3–8 weeks)
Online LOC lender	You need approval in days and have 600+ FICO	Higher APR than a bank
SBA CAPLines	You want SBA-backed pricing on a LOC	SBA timelines (45–90 days)
Credit union	You're already a member and want relationship pricing	Smaller limits typically
Funding marketplace / broker	You want to compare multiple lenders with one application	Verify the broker isn't running unnecessary hard pulls

Frequently asked questions

Can a new business get a line of credit?

Under 6 months in business, most LOC lenders will decline. If you have a strong personal FICO (700+), a secured LOC using personal collateral (a CD or savings) is often the only realistic path for a startup.

How much can I get approved for?

A common rule: 10–20% of annual revenue for an unsecured LOC. A $500K revenue business might see $50K–$100K in limit. Secured LOCs can go higher — up to the collateral value.

Does applying for a LOC hurt my credit?

Yes, if the lender does a hard credit pull. Each hard inquiry dings your score by 5–10 points and stays on your report for 2 years. Ask up front whether the pre-qualification is a soft pull.

Can I get a LOC without a personal guarantee?

Rarely for small business. Established businesses ($10M+ revenue, strong business credit) can sometimes qualify. Most small business LOCs require a personal guarantee from any owner with 20%+ equity.

What's a UCC-1 filing?

A UCC-1 is a public filing that gives the lender a security interest in your business assets. It doesn't take away your ownership — it just gives the lender first claim on your assets if you default. Many 'unsecured' LOCs still file a UCC-1.

Can I get multiple business LOCs?

Technically yes, but each lender will see the others on your business credit report and may reduce your approved limit. Total business debt affects your DSCR — stacking LOCs is a red flag.

Sources

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