How to Get a Business Line of Credit: Requirements, Fees, and Funding

To get a business line of credit, you apply to a bank, an SBA-backed lender, or an online lender after confirming you meet their thresholds for personal credit score, annual revenue, and time in business, then submit tax returns, bank statements, and business financials for underwriting. Most traditional banks want a personal FICO score of at least 680 and annual revenue of $100,000 or more. Online lenders will accept weaker numbers but charge substantially more for it. From application to funded account, the timeline ranges from a few hours with a fintech lender to several weeks with a bank or an SBA program.

What Lenders Look At

Three numbers drive most approval decisions: your personal credit score, how long the business has been operating, and how much revenue it produces. Wells Fargo, for example, typically wants guarantors at a FICO of 680 or higher and a business that has been operating for at least six months.¹ Online lenders often approve scores in the low 600s, but interest rates on those products can run two or three times what a bank charges. Traditional bank revenue floors frequently start at $100,000, though secured products backed by a cash deposit can drop that to about $50,000.²

Lenders also pull your business’s own credit profile. The FICO Small Business Scoring Service (SBSS) and the Dun & Bradstreet Paydex are the two most common scores. For SBA-backed products, an SBSS score of 160 or higher is effectively required, even though the technical minimum is 140.³ Larger lenders often prefer 180 or above. Check your business credit before you apply so nothing surprises the underwriter.

Industry matters too. Construction, restaurants, and trucking usually face tighter scrutiny or lower initial limits than professional services firms with steadier cash flow. Approval is still possible in a volatile industry; just expect harder questions about how you handle seasonal swings or project-based revenue.

Secured or Unsecured

Whether the line is secured or unsecured shapes what you can qualify for, how much you can borrow, and what you’ll pay. An unsecured line requires no collateral but demands stronger financials. Bank of America’s unsecured product, for instance, calls for a personal credit score above 700, at least $100,000 in annual revenue, and two years in business under existing ownership. Its secured line, backed by a minimum cash deposit of $1,000, drops those thresholds to a six-month operating history and $50,000 in revenue.²

With a secured line, the lender typically files a UCC-1 financing statement with your state’s Secretary of State. That public filing gives the lender priority over other creditors if you default and shows up when anyone runs a lien search on your business, which can affect other financing while it’s active.⁴ Filing fees run from about $10 to over $100 depending on the state and whether you file online or on paper.

For most newer businesses, a secured line is the realistic starting point. The lower credit and revenue bars make it accessible, and a year or two of clean repayment builds the track record needed to qualify for an unsecured product with better terms.

Documents to Gather Before You Apply

Having everything on hand before you start the application can shave days or weeks off the process. Expect to produce:

Federal tax returns for both the business and each owner, covering the most recent two years. Lenders verify these directly with the IRS using Form 4506-C, which authorizes a transcript request through the Income Verification Express Service.⁵
At least four months of consecutive business bank statements showing deposits, withdrawals, and average daily balances. Underwriters use these to confirm that the revenue on your returns actually flows through your accounts.
A current profit-and-loss statement and balance sheet covering the most recent fiscal year.
Business formation documents, including the legal entity name as registered with the Secretary of State and your nine-digit Employer Identification Number.
Social Security numbers and residential addresses for every owner above the lender’s ownership threshold. That cutoff varies by lender, commonly 20% or 25%.¹
A debt schedule listing all outstanding obligations, including term loans, equipment leases, and other credit lines. This lets the lender calculate your debt-service coverage ratio.

A line of credit is revolving, so you don’t have to justify each future draw. Even so, many lenders ask for a short statement of intended use. Working capital, inventory purchases, or bridging gaps between receivables and payables are standard answers.

Where to Apply

You have three practical categories of lender, each with different tradeoffs between cost, speed, and how strict the approval standards are.

Traditional Banks and Credit Unions

Banks offer the most competitive interest rates and the strictest underwriting. Expect two to four weeks for a decision. Credit unions often match banks on rates and sometimes charge lower fees because they operate as member-owned nonprofits. Wells Fargo’s BusinessLine product, for example, offers credit limits between $10,000 and $150,000.¹ If you already have a business checking account at a bank, applying there first can work in your favor, because the bank can see your cash flow history without you having to prove it through paper statements.

SBA CAPLines

If you can’t meet a bank’s standards on your own, the SBA’s CAPLines program backs lines of credit with a federal guarantee, reducing the lender’s risk and opening approval to businesses with limited collateral. CAPLines fall under the 7(a) loan program with a maximum of $5 million and come in four varieties: a Seasonal line for cyclical revenue, a Contract line for financing specific contract costs, a Builders line for construction and rehab projects, and a Working Capital line for ongoing short-term needs.⁶

SBA-backed lines come with interest rate caps tied to the prime rate. For loans above $350,000, the lender can’t charge more than the base rate plus 3%. Smaller loans allow a wider spread, up to base rate plus 6.5% for loans of $50,000 or less.⁷ Those caps protect you from the double-digit rates common with online lenders, though the application is slower and more paperwork-intensive.

Online Lenders

Fintech lenders prioritize speed. They analyze bank data through direct account connections and use proprietary algorithms instead of traditional underwriting, often delivering approvals within hours. The tradeoff is cost: interest rates on online business lines of credit commonly run between 10% and 28% APR, well above bank pricing. These lenders fill an important gap for businesses with short operating histories or credit scores below 680. Treat them as a bridge to better financing rather than a long-term solution.

Fees Beyond the Interest Rate

Interest is the obvious cost, but other fees can add real money to what you pay. Read the agreement line by line before signing.

Annual or maintenance fee. Many lenders charge a yearly fee whether or not you use the line. Wells Fargo charges $95 for lines between $10,000 and $25,000, and $175 for larger lines, waived in the first year.¹
Draw fee. Some lenders charge a flat fee each time you pull money. U.S. Bank charges $12.50 per advance on its Business Reserve product, and frequent small draws add up quickly.⁸
Inactivity or non-usage fee. If the line sits idle, some lenders charge a commitment fee to offset the capital cost of keeping credit available.
Origination fee. Some online lenders charge an upfront fee when the line is first established, often a percentage of the credit limit. Traditional banks are less likely to charge one.

Add all of these to the quoted rate for a realistic total cost. A line with a low rate but a draw fee on every advance and a $175 annual maintenance charge can cost more than a higher-rate product with no ancillary fees.

The Application and Funding Process

Once your documents are assembled, submit the package through the lender’s online portal or to a loan officer. That triggers underwriting, where analysts verify tax records, review your debt-to-income ratio, and assess overall creditworthiness. The lender will almost certainly run a hard credit pull on the owners. That typically knocks fewer than five points off your personal FICO and stops affecting the score within about a year, though the inquiry stays on your report for up to two years.

If approved, the lender issues a commitment letter specifying the credit limit, interest rate, draw mechanics, and any collateral requirements. For secured lines, this is when the UCC-1 gets filed. Underwriters may also require a personal guarantee, meaning you’re personally liable if the business can’t pay. Personal guarantees are standard for small business credit, and resisting one rarely works.

Finalizing the line requires signing a promissory note laying out repayment terms, late-fee schedules, and default consequences, which can include legal action or seizure of collateral. After signatures are verified, most lenders activate the account within one to three business days. You draw funds through an online dashboard or a linked business checking account, and interest begins accruing the moment money leaves the line.

If You’re Denied

A denial is not a dead end. The lender must send an adverse action notice explaining the reasons. Read it carefully, because the fix is sometimes simpler than it looks. If your credit score came in a few points too low, pulling your credit report and disputing errors with Equifax, Experian, or TransUnion can close the gap within a few months.

If the problem is insufficient revenue or too little time in business, those are harder to shortcut. Focus on growing revenue, paying down existing debt to improve your debt-service coverage ratio, and waiting until you cross the lender’s minimum operating history. A secured line backed by a cash deposit is often easier to qualify for and builds the repayment history unsecured lenders want to see.

A co-signer with strong personal credit is another option, though that person takes on liability if you can’t pay. Online lenders will accept weaker profiles than banks; go in aware of the higher cost and plan to refinance into a cheaper product once your financials improve.

What Happens After Approval

A business line of credit is not a one-and-done product. Most lenders review the line annually and renewal is not automatic. Expect to provide updated tax returns, financial statements, and sometimes a current personal financial statement for all owners and guarantors. Some lenders also require that you pay the balance down to zero at least once during the year to confirm the line is being used as short-term working capital rather than as a substitute for a term loan.

The lender can adjust terms during that review. Clean repayment and rising revenue may earn a limit increase without asking. If your credit dropped or revenue slipped, the lender can reduce the limit, freeze the line, or decline to renew, sometimes with only after-the-fact notice.

Default carries consequences beyond the line itself. A personal guarantee lets the lender pursue your personal assets. On a secured line, the lender already has a claim on the business assets listed on the UCC-1 and can move to seize them.⁴ Many business credit agreements also include a cross-default clause, so a default on the line can trigger default on your equipment loan, commercial mortgage, or business credit card at the same lender, and sometimes at others. Look specifically for cross-default language before you sign, and know which of your other obligations it reaches.

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Wells Fargo. BusinessLine Line of Credit
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Bank of America. Unsecured Business Line of Credit
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SBA 7(a) Loans. What is FICO SBSS?
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LII / Legal Information Institute. UCC Financing Statement
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Internal Revenue Service. Form 4506-C IVES Request for Transcript of Tax Return
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U.S. Small Business Administration. Types of 7(a) Loans
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U.S. Small Business Administration. 7(a) Working Capital Pilot Program
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U.S. Bank. Business Lines of Credit