A secured business line of credit lets you use your assets to access affordable business financing. Withdraw up to your credit limit as often as needed, only paying interest on what you use.
| Loan amounts | $50,000 to $500,000 |
| Starting interest rate | Up to prime + 3.00% |
| Term length | Up to 120 months |
| Minimum credit score | 680 (recommended) |
| Minimum time in business | 24 months (recommended) |
| Pros | Cons |
|---|---|
Quicker funding times compared to other SBA loans Capped interest rates Long repayment terms | Only available to small businesses (as determined by the SBA) Charges a guarantee fee Business owner must have invested equity in the company |
If you’re looking for a quick SBA loan, the SBA Express loan provides up to $500,000 in revolving funds to small businesses that fall within the SBA’s size standards. Like other SBA loan programs, the Small Business Administration (SBA) guarantees a portion of the funds to reduce lender risk, helping more businesses access the funds they need.While the SBA doesn’t set minimum credit scores, most SBA lenders require a score of 680 or higher. The processing time with an Express loan typically takes 36 hours, which is significantly faster than the turnaround time of five to 10 business days for SBA 7(a) loans.
| Loan amounts | Starting at $1,000 |
| Starting interest rate | Variable |
| Term length | 12 months (with annual review) |
| Minimum credit score | Not disclosed |
| Minimum time in business | Six months |
| Pros | Cons |
|---|---|
Cash-secured line of credit can help establish a positive account history Rate discounts for Bank of America Preferred Rewards members Offers multiple business lending products | Doesn’t disclose interest rate ranges Credit limit based on your security deposit Annual fee of $150 (waived the first year) |
New companies needing startup business financing can consider Bank of America’s cash-secured line of credit. With funds starting at $1,000 and only six months’ business history required, a cash-secured credit line can help you take your company to the next level while boosting your business credit profile.To get started, you must provide an upfront cash deposit — starting as low as $1,000. This deposit will be refunded after a successful one-year review. Once your business hits the two-year mark and earns at least $100,000 in annual revenue, you can graduate to Bank of America’s unsecured line of credit to access more funds.
| Loan amounts | $100,000 to $1,000,000 |
| Starting interest rate | Prime + 0.50% (subject to a 5.00% minimum) |
| Term length | 12 months (with annual review) |
| Minimum credit score | Not disclosed |
| Minimum time in business | 24 months |
| Pros | Cons |
|---|---|
High funding amounts Monthly interest-only payments Competitive rates | High annual revenue requirement Charges an origination fee on an annual basis Doesn’t list credit score criteria |
With the Wells Fargo Prime Line of Credit, high-earning companies can borrow up to $1,000,000 as often as needed with competitive prime-based rates — only paying interest on the amounts withdrawn. Funds can cover working capital expenses, inventory purchases or long-term projects.As a traditional bank with over 7,000 branches nationwide, Wells Fargo is an ideal one-stop shop for everything your business needs: business bank accounts, merchant services, credit cards, tailored support and more. However, businesses must pledge non-real estate assets and generate at least $2 million in annual sales to qualify for this secured line of credit.
| Loan amounts | $100,001 to $3,000,000 |
| Starting interest rate | Variable, based on prime rate |
| Term length | Revolving |
| Minimum credit score | Not disclosed |
| Minimum time in business | 36 months |
| Pros | Cons |
|---|---|
High loan amounts Monthly interest-only payments Can be used as overdraft protection for your PNC business checking account | Minimum credit score or annual revenue requirements not disclosed Long time-in-business requirement Charges an annual fee |
PNC offers a collateralized line of credit for well-established companies needing funds up to $3,000,000. Although PNC doesn’t disclose specific credit score requirements, it does share other eligibility requirements, such as having no history of late payments, foreclosures or tax liens within the past five years. You must provide non-real estate business assets to secure the debt.Interest-only payments are deducted monthly from your PNC business checking account. However, it’s best to make principal payments to avoid additional interest charges. PNC also charges an annual fee of 0.25%.
A secured business line of credit is a type of revolving small business financing that requires the borrower to pledge collateral to secure the debt.
Collateral is typically an asset like cash savings, equipment or real estate, which the lender can seize if you default. In addition to collateral, some lenders might also require a personal guarantee or a business lien.
Since providing collateral reduces lender risk, borrowers can often get lower rates and more flexible repayment terms with secured lines of credit.
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| Pros | Cons |
|---|---|
More lenient qualifications: Collateral can reduce lender risk, helping strengthen your loan application. More favorable rates and terms: Knowing that collateral can help repay the debt, lenders are typically able to provide lower interest rates and longer terms. Greater flexibility: A line of credit allows you to withdraw funds as needed, using the funds to cover a range of small business expenses. | Assets at risk: If you can’t pay your loan, the lender could seize whatever assets you pledged as collateral. Slower time to funding: Lenders typically need extra time to appraise your collateral, which can significantly lengthen the funding timeline. Additional fees: Some lenders charge maintenance and draw fees, as well as annual origination fees. |
Yes, securing a line of credit with collateral can improve your chances of approval and potentially get you a more competitive rate. Acceptable forms of collateral typically include fixed assets like equipment, inventory or real estate, as well as financial assets like cash and certificates of deposit.
Most lenders require a minimum FICO Score of 600 or higher when applying for a business line of credit. Providing collateral could help strengthen your application, even if you have a less-than-ideal credit score.
Alternatively, you can consider business lines of credit for bad credit, which can accept credit scores as low as 500. While these loans can help in a pinch, they typically come with higher rates and unfavorable terms.
Business owners might struggle to qualify for a business line of credit without steady revenue or acceptable collateral. However, there are other ways to get a startup business loan with no money, such as:
