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Best lines of credit for new businesses in 2026
The best line of credit for a new business is an online line, which some lenders open after about six months of steady revenue. Before that, a business credit card is the practical substitute, and a home equity line is the low-rate option for owners willing to pledge their home. Bank lines generally wait until the business has two years of tax returns.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best once you have six months of revenue
- Business line of credit
- Best in the first months
- Business credit card
- Best rate for owners with home equity
- Home equity line of credit
- Best step up after two years
- SBA Express loan
The 4 best options, ranked
1. Business line of credit Best once you have six months of revenue
Online lenders underwrite on bank statement deposits, so a young business with consistent sales can qualify for a starter limit.
Watch for: Some lenders add draw or maintenance fees, and a limit can be cut at renewal. Business line of credit guide →
2. Business credit card Best in the first months
A business card is approved on personal credit with no revenue requirement and works as a small revolving line.
Watch for: Low limits, and one of the most expensive ways to carry a balance for months.
3. Home equity line of credit Best rate for owners with home equity
A HELOC ignores the age of the business. It is inexpensive, and it risks your home on a company without a track record.
Watch for: Your home is the collateral, even though the money funds the business. HELOC guide →
4. SBA Express loan Best step up after two years
An SBA Express revolving line offers a larger limit at a capped rate once the business has the history SBA lenders want.
Watch for: A lower SBA guaranty means lenders can be more selective than on a standard 7(a). SBA loan guide →
Side-by-side comparison
| Option | Verdict | Cost basis | Funding speed | Qualifies on |
|---|---|---|---|---|
| Business line of credit | Best once you have six months of revenue | Representative 8%–30% APR, charged only on what you draw | Often days | Revenue, time in business, and credit |
| Business credit card | Best in the first months | No interest if paid in full each cycle; high rates on a carried balance | Days | Mostly your personal credit |
| Home equity line of credit | Best rate for owners with home equity | Typically prime (7.00%) plus a lender margin | Slower than unsecured options: expect an appraisal and title work | Your home equity and personal credit |
| SBA Express loan | Best step up after two years | SBA-capped rates on amounts up to $500,000 | Faster than a standard 7(a), because the lender decides under its own authority | Similar to 7(a): solid credit and operating history |
What it costs
A line of credit charges interest only on the balance you have drawn. This is the monthly interest on a carried draw, before any principal is repaid:
| Carried draw | At 8% APR | At 19% APR | At 30% APR |
|---|---|---|---|
| $10,000 | $67 | $158 | $250 |
| $25,000 | $167 | $396 | $625 |
| $60,000 | $400 | $950 | $1,500 |
Interest-only illustration across the representative band. Draw fees and repayment schedules vary by lender. WithFunded calculation.
What lenders look at
- Months of consistent deposits.
- The owner's personal credit.
- Account conduct: overdrafts and returned items weigh heavily on a new business.
Mistakes to avoid
- Treating a credit line as startup capital. It is for timing gaps, not for funding losses.
- Using most of a small limit all the time, which can hold back a limit increase.
Frequently asked questions
- Can a new business get a line of credit?
- After roughly six months of revenue, some online lenders will open one. Earlier than that, a business credit card or a secured option is more realistic.
- How much will a new business be approved for?
- Starter limits are modest and tied to monthly revenue. They increase with on-time payments and growth.
- Does a line of credit build business credit?
- Yes, if the lender reports to business credit bureaus. Using the line and paying on time builds the company's file.
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How we ranked these options
This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.
WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.
Related guides
The top-ranked option on this page is business line of credit because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.
Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.