Business Line of Credit for Startups
Most lenders require 12 to 24 months in business before approving a line of credit. Here is what is available for newer businesses and what alternatives to consider if you do not yet qualify.
Why startups struggle to qualify
No track record
Lenders use historical revenue and bank statements to assess repayment risk. Businesses under 6 months old have insufficient data to underwrite confidently.
No business credit file
Business credit scores (Dun and Bradstreet, Experian Business) take 6 to 12 months to establish. New businesses rely entirely on the owner's personal credit.
Revenue requirements
Most lenders require $30,000 to $120,000 in annual revenue. Pre-revenue startups do not meet even the lowest thresholds of mainstream lenders.
Lenders with lower minimum requirements
Fundbox
Min time in business
3 months
Min annual revenue
$30,000/yr
Max credit limit
$150,000
APR from
10.1%
Evaluates bank activity more than credit history. Good for freelancers and early-stage LLCs.
Kabbage (American Express)
Min time in business
12 months
Min annual revenue
$50,000/yr
Max credit limit
$150,000
APR from
9.0%
Requires 1 year of operation and linked business bank account. Fast decisions.
OnDeck
Min time in business
12 months
Min annual revenue
$100,000/yr
Max credit limit
$100,000
APR from
29.9%
Good for businesses with at least 1 year of consistent revenue.
American Express Business Line
Min time in business
12 months
Min annual revenue
$36,000/yr
Max credit limit
$250,000
APR from
3.00% (monthly fee)
Accessible entry point for early-stage businesses with modest revenue.
Alternatives if you do not yet qualify
SBA Microloan
Loans up to $50,000 from SBA-approved nonprofits. Available to new businesses with no minimum time requirement. APRs of 8% to 13%. Requires a business plan and sometimes collateral.
Business Credit Cards
Available from day one of business formation. Limits start low ($500 to $5,000) but can increase quickly. Useful for building business credit history before applying for a line.
Revenue-Based Financing
Lenders like Clearco or Capchase advance capital against future revenue. No fixed monthly payments. Repayments are a percentage of daily or weekly sales. Suits SaaS and e-commerce businesses.
Friends and Family
Informal revolving arrangements with investors or family members. No formal eligibility requirements. Consider formalising terms in writing to avoid disputes.
How to build toward qualifying
- 1Open a dedicated business checking account and route all business income through it. Lenders look at 3 to 6 months of statements.
- 2Apply for a business credit card with a low limit. Use it for small recurring expenses and pay it in full each month to build payment history.
- 3Register your business with Dun and Bradstreet (get a DUNS number). This starts building a separate business credit file.
- 4After 6 months, apply with Fundbox or Kabbage. After 12 months with consistent revenue, you should qualify for most online lenders.