Lines of Credit

Small Business Line of Credit - Access Cash When You Need It

What is a business line of credit, and how does it work?

A business line of credit is a revolving loan that allows you access to fixed capital. You can use a business Line of Credit to meet short-term business needs. A business line of credit is the best financing option when you need extra working capital to cover recurring business expenses or bridge cash flow gaps. 

With ongoing access to funds, you have the flexibility to withdraw only what you need, when you need it—and pay for only what you use. This will help protect yourself against whatever challenges and opportunities come your way.

Benefits of Line of Credit

  • Revolving lines of credit from $6k-100k

  • 12-month repayment term resets after each withdrawal

  • Automatic weekly payments

  • Instant Funding: Get money in your account within seconds every time you make a withdrawal—24/7, even on nights and weekends.*

  • Only pay for what you borrow: Withdraw what you need, when you need it. And pay interest just on the financing you use.

  • Consolidated payment for all withdrawals: Make one weekly payment on all withdrawals, avoiding the headache of multiple payment schedules.

  • Access more funds automatically: Receive automatic credit limit increases when reviewing your credit profile and determining if you qualify. We do this on an ongoing basis, so the opportunity is often there.

  • Business credit building: We report to the credit bureau to help build your business's credit by making on-time payments.

  • Revolving credit: Apply once, and funds replenish when you pay them back, so long as you make timely payments.

  • No prepayment penalties: Get more flexibility by paying off your line of credit anytime you’d like, with no penalty or fee.

  • Transparent pricing: Use our SMART Box® Capital Comparison Tool to get a comprehensive breakdown of your line of credit’s cost—including all the key terms you need to evaluate potential loan offers.

 

Minimum eligibility requirements for a Line of Credit

  • Time in business: 1 year

  • Personal FICO Score: 600

  • Business Annual Revenue: $100k

  • Business Bank Account: Yes

Ways to use a business line of credit

Unlike a term loan, a business line of credit allows you to run your business without having to apply for a new loan every time you need a bit of extra cash. With ongoing access to working capital, you can plan and manage your business’s future cash flow more efficiently. Your line of credit can give you the boost you need to take advantage of opportunities when they arise.

One of the main benefits to having a business a line of credit is that it is revolving. That means you can access the credit line when you need it, pay down the balance, and use the line again as funds replenish. There are many ways you can use business lines of credit. Here are some popular reasons why other small business owners use credit lines.

Top ways to use a line of credit:

  1. Reopening your business

  2. Bridging cash flow gaps

  3. Covering payroll

  4. Hiring more employees

FAQs: OnDeck Business Line of Credit

What is Instant Funding*?

Instant Funding is the fastest and easiest way for small business owners to access working capital to run their business. OnDeck is one of the only lenders to offer business lines of credit with instant access to your funds.

Draw from your line of credit when you need it and see the funds in your account in seconds. The service is available 24/7 even when the banks are closed – so you can get back to business as fast as you can click “draw funds.” And the best part is Instant Funding is available at no extra cost.*

How does my line of credit payback work?

Unlike other online lenders – our line of credit is revolving with no draw fees (just a monthly maintenance fee).  Funds replenish as you pay them back – and additional draws are consolidated into one loan with one easy weekly payment.

Can I get a credit line increase?

There are times when you can really use access to additional funds. You may be eligible for a credit line increase based on your cash flow, net income, and payback history. All you need to do is call your dedicated loan advisor to learn more.

How much will it cost? 

Interest rates start at a 35.9% annual percentage rate (APR). The total cost of your line of credit will vary based on several factors, including your personal and business credit scores, time in business, and annual revenue and cash flow*.

What other small business loans can I get in addition to my line of credit?

You may have a project that could benefit from funds beyond the capabilities of your business line of credit. At OnDeck we understand and our term loans are available in addition to your business line of credit. 

Reach out to your dedicated loan advisor to explore some of your available options. In addition to OnDeck’s Term Loan and Line of Credit, check out this page for other types of small business loans.

What is the SMART Box®?

Transparency is key to choosing a lender. That is why OnDeck developed the SMART Box Capital Comparison Tool. Simply put, this tool shows key terms you need to evaluate potential short-term loan offers. This helps you have a comprehensive, standardized breakdown of your cost of capital. All members of the Innovative Lending Platform Association use the SMART Box.

How does business credit building work?

Unlike most online lenders, we use soft pulls of personal credit reports, which do not affect your credit score. We report your payments to business credit bureaus so that every time you pay on time, you’re helping your business build a strong credit profile.

Business Line of Credit vs. Business Credit Card

A line of credit is a revolving loan that provides a fixed amount of working capital to be accessed as needed. You can access all or part of the credit line at any given time up to the fixed limit, repaid, and used again. 

You only pay interest on the amount of credit used. A business credit card is also very popular and flexible financing and purchasing tool. It can help in times when your business needs quick access to cash.

While business credit cards are similar to business lines of credit, small business owners can use both options on a regular basis. However, there are some purchases or payments you cannot make with a business credit card. 

For example, you may not be able to make certain payments, including your property lease, payroll, and invoices from vendors. However, you can use the funds from your business line of credit. Additionally, some business credit cards come with lower credit limits, and OnDeck's business line of credit is between $6,000 and $100,000.

Secured vs. Unsecured Business Lines of Credit

There are different types of loans for different types of business needs. One type of lending for small businesses is asset-based lending. Asset-based lending uses your asset as collateral for the loan, or in this case, a line of credit.

If you default on the loan, the lender can take possession of your asset. Assets can include real estate, equipment, inventory, accounts receivable, or cash accounts. You can pledge these assets as collateral to back new loans. The use of collateral determines whether the loan or line of credit is "secured" or "unsecured."

A secured business line of credit requires a business to pledge assets as collateral to secure the line. Since a line of credit is a short-term liability, lenders typically ask for short-term assets, such as accounts receivable or inventory. If the borrower cannot repay the line, the lender may proceed to assume possession of the collateral and sell the asset to pay off the balance.

An unsecured business line of credit does not require a business to pledge assets as collateral to secure the line. Unsecured lines of credit typically require the business owner to have a strong credit profile and credit score, along with a positive business track record to qualify. In general, unsecured lines of credit have slightly higher interest rates, and line sizes are relatively smaller.