Business Line of Credit Requirements
Most business lines of credit require a 650+ personal FICO, at least 12 months in business, $15,000+ in monthly business deposits, and a U.S. business checking account. Larger limits ($250K+) typically require 700+ FICO, 2+ years in business, and 2 years of business tax returns.
Most business lines of credit require at least 12 months in business, $15,000 or more in monthly revenue, and a personal FICO of 650 or higher. Documentation typically includes the most recent 6 months of business bank statements and a one-page application. Larger lines (above $250,000) usually add tax returns and basic financial statements. Lines of credit reward stronger credit and longer time in business with higher limits and lower draw rates.
Key takeaways
- 650+ FICO is the typical floor for an unsecured business line of credit.
- 12+ months in business is preferred; some lenders accept 6+ months.
- Most lenders ask for 6 months of business bank statements.
- Lines pay interest only on the balance you draw, not the limit.
- Higher limits open up with higher credit and audited financials.
- BizBee partners offer lines from $20,000 to $500,000.
Who this is for
This page is for owners who want flexible, ongoing access to capital — for cash-flow gaps, seasonal swings, payroll, or unexpected expenses. Lines of credit shine when the need is recurring or hard to size in advance.
If you have a single large, one-time investment to make (equipment, expansion, acquisition), a term loan is usually a better tool than a line.
What you need to qualify
Standard requirements for a business line of credit through the BizBee network:
| Requirement | Typical standard |
|---|---|
| Time in business | 12+ months (some lenders 6+) |
| Personal FICO | 650+ (700+ for best rates) |
| Monthly revenue | $15,000+ |
| Bank statements | Most recent 6 months |
| Business bank account | U.S.-based business checking |
| Tax returns | Required for limits above $250,000 |
| Existing debt | Must support new draw obligations |
Best funding options
Lines of credit and a few related BizBee products:
Business Line of Credit
Revolving access from $20K to $500K. Pay interest only on what you draw.
Working Capital
Faster, more accessible alternative for shorter-term needs.
Term Loan
Better for one-time, larger investments with fixed monthly payments.
Inventory Financing
If your line is mostly used for inventory purchases, dedicated inventory financing may be cheaper.
What lenders actually evaluate for a line of credit
Lines of credit demand more than working capital products because the lender doesn't recapture principal through a daily debit, they extend revolving access and trust you to repay. That's why FICO requirements jump to 650+ and time-in-business floors move to 12 months. Deposit consistency matters more than peak revenue: a steady $20K/month often beats a volatile $40K/month.
Online lenders dominate the $10K–$250K segment with 2–7 day funding. Banks own the $250K–$5M segment but take 2–6 weeks and require deeper documentation.
How LOC pricing actually works
Lines typically price as Prime + a margin, ranging 8–25% APR in 2025–2026 depending on credit. You pay interest only on the drawn balance, so a $100K line carrying a $20K balance at 18% APR costs ~$300/month — far cheaper than carrying the same balance on an MCA.
Some lenders add a draw fee (1–3%) per draw and/or an annual maintenance fee ($150–$500). Always compute all-in cost on your expected utilization pattern, not the headline APR.
How to qualify for the largest possible limit
Three levers raise limits: (1) extend time-in-business past 24 months, (2) bring 2 years of business tax returns and a clean balance sheet to the table for any request over $100K, and (3) eliminate stacked MCAs before applying, they cap LOC limits hard.
If you anticipate needing $250K+, request bank statements + tax returns + P&L upfront rather than the minimum doc stack. Bank-grade lenders explicitly reward more documentation with higher limits.
Draw discipline and the cost of treating an LOC like a term loan
The most common, and most expensive, LOC mistake is drawing the full available limit on day one and treating it like a one-time lump-sum loan. Lines are priced for revolving use, interest only on the drawn balance, frequent paydowns, and re-draws as needs arise. The moment a borrower draws 100% on day one and amortizes that balance over 12–18 months, the effective APR climbs by 200–400 bps because draw fees, maintenance fees, and unused-line fees compound against a borrower who isn't benefiting from the revolving structure.
Disciplined LOC use looks like this: draw $20K of a $100K line in March to cover a payroll gap, pay it down to $5K by May, redraw $30K in July for an inventory push, pay it back down by September. Total interest cost on that pattern across nine months might land at $1,800–$2,400. The same $30K balance carried statically for nine months on a daily-debit term loan can cost $4,500–$7,000, and locks the borrower out of additional flexibility for the same period.
If you know in advance that you need a fixed lump sum to be amortized over 12–24 months without re-draws, a term loan is structurally cheaper and more appropriate than a line of credit. Save the LOC for what it was designed for: variable, recurring, hard-to-forecast working capital needs.
How to decide if this is right for you
Five steps to a successful line-of-credit application.
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1
1. Confirm 650+ FICO and 12+ months
Below either floor, working capital is the more realistic starting point.
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2
2. Average your 3 most recent months of deposits
Should comfortably exceed $15K/month.
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3
3. Clear stacked MCAs first
Open advances materially reduce LOC limits.
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4
4. Choose online vs bank by size
Under $250K → online (2–7 days). Over $250K → bank or SBA Express LOC (2–6 weeks).
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5
5. Plan utilization
Lines reward disciplined draws and consistent paydowns; high utilization triggers credit-limit reviews.
When this makes sense
- You have recurring or unpredictable cash needs.
- You want a financial safety net you can tap when needed.
- Your credit and time in business support 650+ FICO underwriting.
- You will only carry a balance occasionally rather than constantly.
When to be careful
- You plan to draw the full line and treat it like a term loan (it usually costs more that way).
- You expect to carry a high balance constantly, a term loan may be cheaper.
- You have multiple short-term advances open already.
- You plan to use draws to make payments on other debt.
How this plays out in practice
680 FICO, 18 months, $35K/month
Situation: Owner wants flexible access to $50K for seasonal cash gaps.
Recommendation: $25K–$60K online LOC is the right starting point. Pricing 14–22% APR likely.
720 FICO, 3 years, $90K/month
Situation: Established services firm wants $250K for ongoing working capital.
Recommendation: Pursue bank or SBA Express LOC. Provide tax returns + financials for best limit and pricing.
640 FICO, 10 months, $20K/month
Situation: Owner just under both common floors.
Recommendation: Start with working capital instead; revisit LOC at month 12 with a higher FICO.
700 FICO, 4 years, $180K/month, prior MCA paid off 90 days ago
Situation: Established e-commerce business cleared a six-month MCA earlier this quarter and wants a $200K LOC.
Recommendation: Apply with bank statements + 2 years of tax returns + current P&L. Expect a $150K–$250K approval at 10–16% APR. The recent MCA payoff is a positive signal as long as it cleared cleanly, provide the payoff letter.
See if you qualify for a line of credit.
BizBee will quote real lines of credit from our partner network, soft pull, no upfront fees, no obligation.
Frequently asked
Common questions
Key facts in one line
- Most business lines of credit require 650+ FICO and 12+ months in business.
- $15,000+ in monthly business deposits is the common revenue floor.
- Limits typically range $10K–$250K with online lenders; $1M+ via banks.
- Interest only accrues on the drawn balance, not the total limit.
- Per OCC 2025 data, average small-business LOC utilization runs 25–40%.
- BizBee's marketplace shops your file across LOC lenders with a single soft pull.
Glossary
Terms worth knowing
- Revolving credit
- Funding you can draw, repay, and redraw against a fixed limit, like a credit card.
- Draw fee
- A 1–3% fee charged on each draw from the line. Common with online LOC products.
- Utilization
- The percentage of your line currently drawn. Heavy sustained utilization can trigger credit-limit reviews.
- SBA Express LOC
- A faster SBA line-of-credit product capped at $500K, often delivered through bank partners.
- Maintenance fee
- An annual fee ($150–$500) some lenders charge to keep the line open, separate from interest.
- Unused-line fee
- A small fee (typically 0.25%–0.50%) charged on the undrawn portion of a line, designed to compensate the lender for holding capital available. Common with bank-grade LOCs, less common with online LOCs.
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