Last updated: October 14, 2026. SBA revolving-line facts checked on SBA.gov on October 14, 2026.
To get a business line of credit in 2026, decide how much you need and why, check your personal credit, and gather recent bank statements, tax returns and entity papers. Ask your own bank or credit union first, compare APR, fees, draw rules and the personal guarantee in writing. A merchant cash advance is not a line of credit.
What lenders look at
| Factor | What the lender wants to see | What you can do first |
|---|---|---|
| Owner personal credit | On-time history and low balances | Pull your reports at annualcreditreport.com and fix errors before a hard pull |
| Time in business | A track record the lender is comfortable with | Newer business? See startup funding |
| Revenue and cash flow | Steady deposits that can carry the payment | Keep clean business bank statements with few overdrafts |
| Existing debt | What you already owe each month | Write a business debt schedule |
| Collateral or guarantee | Assets for a secured line; usually a personal guarantee | Read the guarantee before you sign |
| Purpose | Short-term, recurring needs | Write one short use-of-funds note |
Each lender sets its own bar.
How a business line of credit works
You get a limit. You draw what you need and pay interest on what you use. As you repay, that part of the limit frees up again. A term loan is different: one lump sum, then fixed payments.
Some lines have a draw period followed by a repayment period. Some charge annual or draw fees. Ask how the line renews and whether the lender can reduce or freeze it.
Step by step
- Decide the amount and the use. Lines fit short-term needs, not long-term purchases.
- Check each owner's credit reports.
- Build the core file once. See what documents you need.
- Start with the bank or credit union that holds your business account. Then try a CDFI or an SBA lender.
- Ask whether prequalification uses a soft credit check. The CFPB explains soft and hard inquiries.
- Get every offer in writing. Compare APR, total cost in dollars, annual and draw fees, the draw period, repayment terms, collateral and the personal guarantee.
SBA revolving options
SBA's 7(a) loan types page says revolving lines of credit are permitted only under SBA Express, Export Express, or CAPLines. The Working CAPline provides an asset-based revolving line for cyclical, recurring or short-term needs. SBA also lists a 7(a) Working Capital Pilot program with monitored lines of credit. You apply through an SBA lender, not SBA. Lender Match can connect you. See how to qualify for an SBA loan.
Secured vs unsecured lines
An unsecured line has no specific collateral, but it usually needs a personal guarantee and stronger credit. A secured line is backed by receivables, inventory or other assets.
If you are turned down
Ask for the reasons in writing and fix the file. Don't reapply to the same lender with the same file. See business loan denied and bad credit business loans.
A merchant cash advance is not a line of credit
An MCA buys future sales and is repaid daily or weekly from revenue over a few months. It does not revolve, and it costs far more. Here is the site's example, not a quote: $50,000 at a 1.35 factor rate means paying back $67,500 over about six months, roughly 126% APR. Read line of credit vs. MCA, is an MCA a good idea and MCA alternatives.
Apply directly, not through a cold caller
Read funding without a broker, why brokers call you and how to stop MCA broker calls.
Other options
Start with where to get business funding. Also see how much funding you can get.
Sources
- SBA types of 7(a) loans: https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans
- SBA 7(a) loans: https://www.sba.gov/funding-programs/loans/7a-loans
- SBA Lender Match: https://www.sba.gov/loans/lender-match/
- CFPB credit inquiries: https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-inquiry-en-1317/
- Annual credit reports: https://www.annualcreditreport.com/