Working Capital Line of Credit: What It Is and Best Options
A working capital line of credit is a good option to get cash as needed for operating expenses, seasonal slowdowns and to bridge cash flow gaps.
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best working capital lines of credit: More details
U.S. Small Business Administration: Best for SBA working capital lines of credit
Part of the 7(a) loan program, SBA CAPLines provide funding for short-term working capital needs. Each of the four credit lines is designed for a specific purpose, including general working capital, seasonal slows, construction and contract orders.
SBA CAPLines of credit
with NerdWallet Small Business
Max loan amount
$5,000,000
Min. credit score
650
Term length
Up to 10 years
Pros
- Line of credit options for seasonal, working capital, building and contracting needs.
- Large maximum borrowing amounts.
- Competitive interest rates and repayment terms.
Cons
- Typically requires good credit and multiple years in business.
- Slow to fund.
- Collateral and/or down payment may be required.
Pros
- Line of credit options for seasonal, working capital, building and contracting needs.
- Large maximum borrowing amounts.
- Competitive interest rates and repayment terms.
Cons
- Typically requires good credit and multiple years in business.
- Slow to fund.
- Collateral and/or down payment may be required.
Wells Fargo: Best for low interest rates
Wells Fargo offers a revolving working capital line of credit with rates as low as prime + 1.75%. You may be able to qualify with as few as six months in business — as long as you have good credit.
Wells Fargo BusinessLine® Line of Credit
with NerdWallet Small Business
Max loan amount
$150,000
Min. credit score
680
Term length
Undisclosed
Pros
- Bank line of credit with competitive interest rates.
- Revolving credit line with no scheduled annual review.
- No collateral required; no prepayment penalties.
Cons
- Must have strong credit to qualify.
- May take longer to fund than online lenders.
- Annual fee and inactivity fees may apply.
Pros
- Bank line of credit with competitive interest rates.
- Revolving credit line with no scheduled annual review.
- No collateral required; no prepayment penalties.
Cons
- Must have strong credit to qualify.
- May take longer to fund than online lenders.
- Annual fee and inactivity fees may apply.
Bluevine: Best for fast funding
Bluevine can provide up to $200,000 as fast as the same day. To get same day funding, you’ll need to pay a $15 wire fee or have a Bluevine business checking account.
May fund quickly
Bluevine - Line of credit
with NerdWallet Small Business
Max loan amount
$200,000
Min. credit score
625
Term length
6 to 12 months
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Headway Capital: Best for bad credit
Headway Capital provides fast working capital lines of credit for borrowers with a minimum credit score of 600 or higher. You can qualify within minutes and receive funds as soon as the next business day.
Headway Capital - Line of credit
with NerdWallet Small Business
Max loan amount
$100,000
Min. credit score
625
Term length
12 to 24 months
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Fundbox: Best for startups
You can get a business line of credit from Fundbox in amounts up to $150,000. You only need three months in business to qualify — the lowest requirement of all the lenders on our list.
May fund quickly
Fundbox - Line of credit
with NerdWallet Small Business
Max loan amount
$250,000
Min. credit score
600
Term length
3 to 24 months
Pros
- Financing available within two business days after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Weekly repayments required.
Pros
- Financing available within two business days after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Weekly repayments required.
Chase: Best for high limits
Chase offers a credit line up to $500,000. This can be a good option for those who need a large limit — especially established businesses that have fair or good credit. Chase requires a 660+ credit score, which is lower than other banks.
Chase - Business line of credit
with NerdWallet Small Business
Max loan amount
$500,000
Min. credit score
660
Term length
5 years
Pros
- Bank credit line with competitive interest rates.
- Large maximum line limit of $500,000.
Cons
- Not available in Alaska and Hawaii.
- Annual fee may apply.
Pros
- Bank credit line with competitive interest rates.
- Large maximum line limit of $500,000.
Cons
- Not available in Alaska and Hawaii.
- Annual fee may apply.
Should you get a working capital line of credit?
A working capital line of credit may be a good option if you:
- Need to cover short-term expenses.
- Want an emergency fund to keep in your back pocket.
- Have at least three months in business.
- Have a personal credit score of 600+.
- Have existing revenue.
Not a fit? Jump down to learn more about alternatives.
What is a working capital line of credit?
A working capital line of credit is used specifically to finance short-term operating expenses, as opposed to investing in one purchase or long-term project. You might use this business line of credit to pay for:
- Rent.
- Payroll.
- Utilities.
- Inventory.
- Supplies.
- Emergency expenses.
- Employee training.
- Large order fulfillments.
Working capital is one of the most common reasons why business owners need financing. According to NerdWallet’s Business Loan Study, 65% of approved borrowers said they were seeking funding to cover working capital needs.
🔍 Quick definition: Working capital
Working capital is the difference between your business’s current assets (cash, accounts receivable, inventory) and its current liabilities (accounts payable and debts) — essentially what you have available to spend on day-to-day expenses.
» MORE: How to calculate working capital
How a working capital line of credit works
A working capital line of credit allows you to borrow up to a certain limit and pay interest only on the funds you draw.
You then repay the money you’ve borrowed, usually weekly or monthly. You can continue to draw on the line as needed — provided you make timely payments and don’t exceed your credit limit.
Working capital credit lines can be secured or unsecured. Secured business lines of credit are backed by physical collateral, like inventory or equipment. Unsecured lines don’t require physical collateral.
Working capital loan vs. line of credit
A working capital loan is a better option if you need a lump sum upfront or need to cover a large, one-time expense. Here’s how the two products compare:
| Working capital loan | Working capital line of credit | |
| Structure | Lump sum upfront that is repaid over time. | Draw funds as needed, up to a set limit. |
| Funding amount | Typically larger. | Typically smaller. |
| Repayment | Often revolving; repay what you draw. | Fixed schedule over a set period. |
| Interest | Paid only on funds drawn. | Paid on the full amount. |
Pros and cons of working capital lines of credit
Pros
- Can be used for a variety of short-term needs.
- Revolving structure lets you draw and repay funds repeatedly, up to your limit.
- Often fast to fund.
Cons
- Not a good option for larger or long-term purposes.
- Fees can add to borrowing costs.
- May require frequent payments.
How to qualify for a working capital line of credit
Requirements vary by lender, but these guidelines can help you get started:
Personal credit score: 600+
The stronger your credit score, the more financing options you’ll have available. Most online lenders will require a minimum score of 600 or higher. Traditional lenders will be more strict; many ask for a score of 670+.
Annual revenue: $30,000+
You’ll usually need to show that you’re generating revenue to qualify. Online lenders usually have lower requirements. Banks will require a higher annual amount.
Time in business: 3+ months
A longer time in business can help you access more competitive options — like bank or SBA credit lines. Online lenders may accept startups that have three to six months in business.
How to compare working capital lines of credit
Working capital lines of credit can be issued by banks, credit unions and online lenders. Some banks and credit unions also offer SBA programs such as the SBA Working Capital Pilot program or SBA CAPLines which can help you meet your short-term financing needs. Here’s how to compare your options:
- Credit limits. Your ideal credit limit will vary based on your specific working capital needs, and how frequently you will repay your credit line. Understanding what you’re looking for can help you narrow down lenders.
- Interest rates and fees. The best interest rates and fees typically come from banks and credit unions and usually require strong personal credit and business revenue.
- Repayment terms. Make sure the available repayment terms work with your business model and the income you know you have coming in.
- Funding speed. Keep in mind that you may be taking multiple draws instead of just one lump sum, so the speed of funding won’t just matter up front. Considering the ease of the lender’s process can save you time and logistical headaches later on.
- Application process. Online lenders typically have streamlined application processes, making them ideal if you need to access capital fast. Though they can be cheaper, banks and CDFIs can take much longer to process applications.
- Customer support. With a line of credit, you may need to interact with your lender about your account more frequently than with a term loan, so look for multiple contact channels and good customer support ratings.
- Lender reputation. Look at reviews on sites like Trustpilot and the Better Business Bureau to make sure your lender is reputable and trustworthy.
Alternatives to a working capital line of credit
If a working capital line of credit isn’t right for you, here are some alternatives:
- If you need to cover a large purchase or expansion, consider a long-term business loan.
- If you’re a brand new business and need to cover everyday expenses, consider a business credit card.
- If you want to explore all of your financing options, check out our picks for the best small-business loans.
Last updated on July 24, 2026
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