One post tagged with "credit"

If you want flexible working capital you can draw, repay, and reuse, a business line of credit (LOC) beats taking repeated term loans. Below are this year’s strongest options by use‑case, plus a quick way to compare costs and a simple Beancount recipe for recording draws, interest, and fees.

TL;DR — Best‑fit picks by scenario​

• Fast, flexible fintech line: Bluevine — up to $250k, weekly or monthly repayment, funding often within 24 hours, rates advertised “as low as 7.8% (simple interest).”
• Fee‑based draws with multiple terms: American Express Business Blueprint® Line of Credit — line sizes $2k–$250k; choose 1–3‑month single‑repayment loans or 6–24‑month installment loans with fixed loan fees (not APR).
• Prime‑based bank line with clear pricing: Wells Fargo BusinessLine® / Prime Line — BusinessLine: Prime + 1.75% to +9.75%; Prime Line: Prime + 0.50% (floor 5%); typical credit limits $10k–$150k.
• Relationship pricing & a way to “graduate”: Bank of America — unsecured Business Advantage line (relationship discounts 0.25–0.75%); or Cash‑Secured line where your deposit sets the limit (from $1,000), helpful to build business credit.
• Branch + national reach: Chase Business Line of Credit — online up to $250k, 5‑year revolving period then 5‑year repayment (available in 48 states).
• **Up to $250k with clear annual fee policy:** **U.S. Bank Cash Flow Manager** — lines to$250k; unsecured option to $100k; no annual fee if line \>$50k (otherwise $150).
• Newer businesses that need speed (know the cost): Headway Capital — $5k–$100k, calculator shows starting ~3.3% monthly + 2% draw fee.
• Fast approvals but typically expensive: OnDeck LOC — up to $200k; company‑reported average APR ~56.6% for lines (H1’25).
• For bigger, lower‑rate, monitored lines (if you qualify): SBA lines — classic CAPLines umbrella programs and the newer 7(a) Working Capital Pilot (WCP). WCP lets lenders issue monitored revolving lines up to $5M with an SBA guaranty.

What changed or matters in 2025? 📈​

Two key trends are shaping the business credit landscape this year:

1. Prime settled lower than 2023 highs. The Wall Street Journal Prime Rate is 7.50% (as of September 2, 2025), last changed on December 19, 2024. This is the benchmark rate that directly feeds the pricing for most variable-rate bank lines of credit (which are typically priced as "Prime + a margin"). A stable, lower Prime Rate means more predictable costs for borrowers.
2. SBA rolled out/expanded monitored working‑capital lines. The 7(a) Working Capital Pilot (WCP) program, effective August 1, 2024, continues to expand. It enables lenders to issue asset- or transaction-based monitored LOCs, which is a huge help for businesses needing financing for inventory, receivables, or specific contracts.

Snapshot: Popular lines of credit you can actually get​

How to choose the right LOC (7 quick checks) ✅​

1. Index & Margin: If it’s a bank line priced as "Prime ± X%", check today’s Prime Rate (7.50%) and add the margin you’re offered. That’s your current variable Annual Percentage Rate (APR).
2. Fee‑based vs. Interest‑based: Some fintechs (like AmEx Blueprint) charge a fixed "loan fee" per draw instead of interest. Compare the effective APR of that fee to interest-based offers before deciding.
3. Annual/Draw Fees: These add to your total cost, especially if you use the line infrequently. U.S. Bank waives its $150 annual fee for lines over$50k, while PNC lists a $175 fee for its unsecured LOC.
4. Repayment Cadence: Weekly payments (common with online lenders) can smooth out cash flow but require more frequent management. Monthly payments simplify bookkeeping. Bluevine offers both weekly and monthly options.
5. Funding Speed: If you need cash now, speed is critical. Bluevine often funds within 24 hours, and American Express offers instant deposits on draws to an AmEx Business Checking account.
6. Eligibility & Graduation Path: If you can't qualify for an unsecured line yet, a product like Bank of America’s cash‑secured line (starting at $1,000) can help you build business credit and "graduate" to an unsecured line later.
7. Consider SBA for Size or Structure: For larger needs tied to inventory, receivables, or contracts, the SBA's 7(a) WCP or CAPLines programs can provide larger, monitored lines at regulated rates, provided you can handle the more in-depth underwriting.

A quick cost comparison tip 🧮​

Comparing offers can be tricky. Here's a simple way to think about it:

• Prime‑based example: If a bank offers you Prime + 2.75%, your starting APR today is 10.25% (7.50% + 2.75%). Remember, this rate will float up or down if the Prime Rate changes.
• Fee‑based example (AmEx Blueprint): A 12-month draw with a 6–18% total loan fee might seem low. However, to compare apples-to-apples, you must compute the equivalent APR on the amortizing balance. A fixed fee on the initial draw amount is not the same as an APR on a declining balance.

Beancount: How to record a line of credit​

For users of the plain-text accounting tool Beancount, tracking a line of credit is straightforward. The LOC is a liability; draws increase that liability and your cash, while interest and fees are expenses. Replace the account names below to match your own ledger.

1) Draw $25,000 from your LOC to your checking account

2025-03-15 * "LOC draw"
  Assets:Bank:Checking                      25,000.00 USD
  Liabilities:LOC:Bluevine                -25,000.00 USD

2) Make a $2,300 payment ($300 interest, $2,000 principal)

2025-04-15 * "LOC payment (principal + interest)"
  Liabilities:LOC:Bluevine                  2,000.00 USD
  Expenses:Interest:LOC                       300.00 USD
  Assets:Bank:Checking                     -2,300.00 USD

3) Record a $150 annual fee charged to your bank account

2025-01-10 * "Annual LOC fee"
  Expenses:BankFees:LOC                       150.00 USD
  Assets:Bank:Checking                       -150.00 USD

Alternative: If the annual fee is added to the line's balance instead of being debited from your bank account, the transaction would be:

2025-01-10 * "Annual LOC fee added to balance"
  Expenses:BankFees:LOC                       150.00 USD
  Liabilities:LOC:Bluevine                   -150.00 USD

When an SBA-backed line makes more sense​

An SBA-guaranteed line isn't for everyone, but it's a powerful tool if:

• You need a bigger credit limit than what most fintech or bank unsecured products offer.
• Your working capital needs are tied to collateral like accounts receivable (A/R), inventory, or signed contracts.
• You can handle the monitoring requirements, such as submitting borrowing base certificates and regular financial reporting.

If this sounds like your business, look into the SBA CAPLines programs and the 7(a) Working Capital Pilot (WCP). These programs can facilitate lines up to $5M, and standard CAPLines can have maturities of up to 10 years.

Application checklist 📝​

Be prepared. Most lenders will ask for the following:

• Time in business, revenue, and credit score: Banks typically want 1–2+ years in business and stronger credit, while many online lenders have more flexible criteria but price for the added risk.
• Financials: Have your recent bank statements, business tax returns, and potentially A/R aging or inventory reports ready.
• Personal Guaranty: This is a standard requirement for most business lines of credit. It means you are personally responsible for repaying the debt if the business cannot.

Key sources​

• Prime Rate: Commerce Bank
• Bluevine: Product Page, Support Docs
• American Express: Business Blueprint LOC
• Wells Fargo: Business Lines of Credit
• Chase: Business Line of Credit
• U.S. Bank: Cash Flow Manager
• PNC Bank: Business Credit Products
• OnDeck: Product Page
• Headway Capital: Product Page
• SBA: CAPLines, 7(a) WCP

Final word​

A line of credit is about control: draw what you need, when you need it. In 2025, Prime-based bank lines remain attractive for those who qualify, while fintech lines trade higher costs for incredible speed and flexibility. For larger, more complex needs, SBA-backed lines unlock structured facilities. The key is to run the numbers (always convert fees to an effective APR), understand the fee structure, and pick a repayment schedule that keeps your business financially healthy—and your Beancount ledger clean.