Best Business Credit Cards & Financing Options

Choosing the right business credit card or financing option can significantly impact your company’s financial health. Here’s a quick rundown of the top tools to manage expenses, earn rewards, and fund growth:

• Business Credit Cards: Offer revolving credit and perks like cash back, travel rewards, and purchase protections. Examples include:
  • Chase Ink Business Preferred®: 3X points on travel/advertising, $95 annual fee.
  • Amex Business Platinum: Premium travel perks, $695 annual fee.
  • Capital One Spark Cash Plus: Unlimited 2% cash back, $150 annual fee.
  • Brex Business Credit Card: No personal guarantee, tailored for startups.
  • Bank of America Customized Cash Rewards: 3% cash back in a chosen category, no annual fee.
• Financing Options:
  • SBA Loans: Low rates, long repayment terms, ideal for large investments.
  • Business Lines of Credit: Flexible access to funds, pay interest only on what you use.
  • Online Loans: Fast approvals but higher rates.
  • Invoice Financing: Access cash tied up in unpaid invoices.
  • Merchant Cash Advances: Quick funding but costly.

Key Considerations:

• Rewards: Maximize cash back or points based on spending habits.
• Fees: Balance annual fees against benefits.
• Eligibility: Credit score, business revenue, and documentation requirements vary.
• Speed: Online loans and merchant cash advances are fastest; SBA loans take longer.

Quick Comparison

Pick tools that align with your business’s goals, spending patterns, and growth stage to keep finances on track.

1. Chase Ink Business Preferred® Credit Card

The Chase Ink Business Preferred® Credit Card stands out for businesses that spend heavily on travel and digital advertising. It offers 3X points per $1 on the first $150,000 spent annually on categories like travel, advertising (including Google Ads and Facebook), internet, cable, and phone services. Beyond that limit, and for all other purchases, you’ll earn 1X point per $1.

Rewards and Benefits

When redeeming points through Chase Ultimate Rewards®, your points are worth 25% more for travel. That means 100,000 points translate to $1,250 in travel value. You also have the flexibility to transfer points to Chase’s airline and hotel partners or redeem them for cash back or gift cards.

The card includes several protections, such as cell phone insurance, purchase protection, extended warranty coverage, and no foreign transaction fees.

New cardholders can take advantage of a generous sign-up bonus. Recent offers have included 100,000 points after spending $15,000 in the first 3 months.

Fees and Interest Rates

The card comes with a $95 annual fee, which is reasonable considering the rewards and benefits it provides. Its variable APR typically ranges from 18% to 25%, depending on your creditworthiness. With no foreign transaction fees, it’s a great option for businesses with international travel or operations.

Eligibility and Requirements

To qualify, you’ll generally need a FICO score of 700 or higher. Applicants must have a registered business, such as a sole proprietorship, LLC, or corporation, and provide an Employer Identification Number (EIN) or Social Security Number (SSN). Additional requirements include a business address and an estimate of your monthly business spending. These criteria ensure the card aligns with businesses that can truly benefit from its rewards and protections.

Best Use Cases

This card is an excellent fit for businesses like marketing agencies, consulting firms, and e-commerce operations that frequently spend on digital advertising and travel. For instance, a digital marketing agency with frequent travel could earn significant rewards in the 3X bonus categories while taking advantage of the boosted travel redemption value. Additionally, it’s ideal for businesses needing credit limits between $5,000 and $50,000 or more, especially those that can concentrate spending in the bonus categories.

2. American Express® Business Platinum Card

The American Express® Business Platinum Card is designed for businesses that prioritize premium travel perks and luxury benefits. As a charge card, it requires the balance to be paid in full each month. It offers 5X Membership Rewards® points on flights and prepaid hotels booked through Amex Travel, along with 1.5X points on select business purchases and transactions of $5,000 or more.

Rewards and Benefits

This card is packed with perks tailored to businesses with upscale needs. Cardholders can access over 1,400 airport lounges worldwide through the Global Lounge Collection. It also provides annual statement credits, including up to $200 for airline fees, $400 for U.S. Dell purchases, and wireless service credits. Other benefits include concierge services and standard protections. New cardholders can earn a welcome bonus of 120,000–150,000 points after spending $15,000 within the first three months.

Fees and Interest Rates

The card comes with a $695 annual fee. Since it’s a charge card, there’s no traditional APR, as balances must be paid in full every month. However, late payments can incur fees and penalty rates. On the bright side, there are no foreign transaction fees, making it a great option for international business travelers.

Eligibility and Requirements

To qualify, applicants generally need a personal credit score of 700 or higher, solid business financials, a registered U.S. business with a valid address, and demonstrated revenue. Credit limits range from $10,000 to over $100,000, depending on the business’s financial performance. These requirements make it a strong choice for businesses that can take full advantage of its premium features.

Best Use Cases

This card is perfect for businesses with high travel and entertainment expenses, such as consulting firms that benefit from lounge access, bonus points on flights, and concierge services. However, it’s less suitable for businesses with minimal travel needs or those that rely on revolving credit, as full monthly payments are required.

3. Capital One Spark Cash Plus

The Capital One Spark Cash Plus is designed for businesses that want straightforward, high-rate rewards without the hassle of managing bonus categories. As a charge card, it stands out by requiring the full balance to be paid each month and having no preset spending limit. This setup can be particularly useful for businesses with fluctuating or significant monthly expenses.

Rewards and Benefits

With this card, you earn 2% unlimited cash back on every purchase – no need to track spending categories. New cardholders often have the opportunity to earn a sign-up bonus, which is typically around $1,000 after spending $10,000 within the first three months. The card also includes free employee cards with customizable spending limits, making it easier to manage team expenses. On top of that, year-end summaries help streamline expense tracking for accounting purposes.

Fees and Interest Rates

The annual fee for the card is $150. Since it’s a charge card, you’re required to pay off the balance in full each month, which means there’s no interest charged on purchases. Additionally, there are no foreign transaction fees, a great perk for businesses with international dealings. However, be cautious – late payments can result in penalty fees.

Eligibility and Requirements

To qualify, businesses typically need good to excellent credit and solid financial documentation. Capital One places a strong emphasis on the financial health of the business, evaluating factors like revenue, legal structure, and ownership details, rather than focusing solely on personal credit scores. This approach makes the card a good fit for businesses with steady, high monthly expenses.

Best Use Cases

This card shines for businesses that have significant monthly expenses and can reliably pay off their balance each month. For instance, a marketing agency spending $20,000 per month could earn around $400 in cash back. It’s a solid choice for both growing startups and established businesses with variable spending needs. However, it’s not ideal for businesses that need the flexibility to carry a balance.

Experts consistently rate the Spark Cash Plus highly, often giving it a 4.9/5 for its simple rewards structure and spending flexibility.

4. Bank of America® Business Advantage Customized Cash Rewards

The Bank of America® Business Advantage Customized Cash Rewards card offers flexibility and no annual fee, making it a smart choice for small businesses that want to tailor their rewards to suit their needs. Unlike cards with fixed reward categories, this one allows you to select a preferred category based on your business priorities.

Rewards and Benefits

With this card, you can earn 3% cash back in a category of your choice, such as gas, office supplies, travel, TV/telecom & wireless, computer services, or business consulting. Additionally, you get 2% cash back on dining and 1% on all other purchases. This flexibility means you can adjust your focus as your business needs change. For example, a consulting firm might select "travel" during a heavy client meeting season and then switch to "office supplies" when it’s time to restock.

To put it in perspective, spending $2,000 per month on travel could earn you about $60 in cash back each month, which adds up to $720 annually – all without paying an annual fee. Plus, new cardholders can earn a $300 statement credit after spending $3,000 within the first 90 days. Rewards don’t expire as long as your account is active, and you can redeem them in several ways: statement credits, checks, or direct deposits into a Bank of America account.

Fees and Interest Rates

This card comes with no annual fee, but it does have a variable APR ranging from 16.24% to 26.24%, depending on your creditworthiness. There’s also a 3% foreign transaction fee, so it might not be the best fit for businesses with frequent international expenses. Standard fees for balance transfers and cash advances apply, so it’s a good idea to double-check current rates directly with Bank of America.

Eligibility and Requirements

To qualify, you’ll generally need good to excellent credit, typically a FICO score of 670 or higher. You’ll also need to provide standard business details like your EIN, legal business name, address, and estimated annual revenue. Bank of America evaluates both your personal credit and your business’s financial health, including factors like revenue and how long you’ve been operating. Applications can be submitted online or in person at a branch, and decisions are usually made within a few business days.

Best Use Cases

This card is ideal for small businesses with predictable monthly expenses and moderate spending – particularly those spending under $30,000 annually in bonus categories. For example, a retail business might select "office supplies" during inventory months and switch to "gas" during delivery-heavy periods to maximize rewards during seasonal shifts.

Keep in mind that the 3% and 2% cash back rates apply only to the first $50,000 spent annually in the bonus category and dining combined. After that, all purchases earn 1% cash back. While experts often recommend this card for its flexibility and lack of an annual fee, some businesses might find the spending cap and the need to update their preferred category to be minor drawbacks.

5. U.S. Bank Business Leverage® Visa Signature® Card

The U.S. Bank Business Leverage® Visa Signature® Card is designed with a rewards system that adapts to your spending habits. This makes it a great choice for businesses with varying monthly expenses or those who prefer a hands-off approach to earning rewards.

Rewards and Benefits

This card automatically gives you 3X points on your top two spending categories each month for eligible purchases – think office supplies, utilities, and more. All other purchases earn 1X point per dollar spent. There’s no need to track or activate bonus categories, as the card does the work for you.

Points can be redeemed for travel, merchandise, gift cards, or cash back. Plus, the card includes Visa Signature perks like purchase protection, extended warranty coverage, and travel emergency assistance. It also allows free employee cards, which not only simplify team spending but add to your rewards. This structure is a great fit for businesses needing flexibility across different expense categories.

Fees and Interest Rates

The card has no annual fee for the first year, but a $95 fee kicks in after that. It features a variable APR ranging from 19.24% to 28.24%, depending on your creditworthiness.

Eligibility and Requirements

To qualify, your business needs strong credit. U.S. Bank evaluates both your business financials and credit history, requiring standard documentation. Credit limits typically range from $3,000 to over $25,000, based on your business’s credit profile.

Best Use Cases

This card is perfect for businesses with shifting expenses, especially those spending significantly on categories like office supplies and utilities. For instance, a law firm that spends $1,000 on office supplies and $500 on utilities each month could earn around 4,500 points monthly, helping to offset costs. The first-year fee waiver makes it a low-risk option to see if the rewards system suits your needs. However, businesses with higher spending or those needing rewards across a broader range of categories might want to evaluate whether the card’s credit limit aligns with their requirements.

6. CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®

The CitiBusiness® / AAdvantage® Platinum Select® World Mastercard® is designed for businesses that rely on frequent travel with American Airlines. It transforms everyday business expenses into AAdvantage® miles while offering travel perks that can help reduce costs.

Rewards and Benefits

With this card, you’ll earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases, as well as on telecommunications, car rentals, and gas station expenses. For all other purchases, you’ll earn 1 mile per $1 spent. Travel perks include priority boarding and one free checked bag for the cardholder and up to four companions. Plus, there’s a generous sign-up bonus of AAdvantage® miles when you meet the minimum spending requirement within the first few months. To simplify expense tracking, the card also includes business expense management tools.

Fees and Interest Rates

The card comes with an annual fee of $99, which is often waived during the first year as part of promotional offers. The variable APR typically ranges from 18% to 25%, depending on your credit profile and market factors. While foreign transaction fees are waived (a big plus for international travel), keep in mind that fees for balance transfers and cash advances may apply.

Eligibility and Requirements

To qualify, you’ll need to provide either a valid Employer Identification Number (EIN) or Social Security Number (SSN), along with a U.S. business address. A credit score of 690 or higher is typically required. Lenders will also evaluate your business revenue, time in operation, and personal credit history. Credit limits for this card generally range from $5,000 to $40,000 or more, depending on your qualifications.

Best Use Cases

This card is a great fit for businesses that frequently use American Airlines, such as consulting firms, sales teams, or logistics companies. For example, a consulting firm with employees who regularly fly American Airlines can use the card for airfare, hotel stays, car rentals, and gas purchases to rack up miles quickly. The added perks, like priority boarding and waived baggage fees, help reduce overall travel costs. However, if your business doesn’t rely heavily on American Airlines or requires more flexible travel rewards, another card might be a better choice.

7. Brex Business Credit Card

The Brex Business Credit Card is designed with startups, tech firms, and high-growth companies in mind. Unlike traditional business credit cards that tie approval to personal credit scores, Brex focuses on your company’s financial health, creating a clear line between personal and business finances.

Rewards and Benefits

Brex stands out with rewards tailored to business needs, offering up to 7x points on specific expenses like travel and software. Points can be redeemed flexibly – for cash back, travel, gift cards, or even billboard advertising. Cardholders also gain access to over $350,000 in discounts and credits from partners such as AWS, Freshworks, UPS, QuickBooks, and Slack. Plus, the card is accepted worldwide, with local-currency billing available in more than 50 countries.

Fees and Interest Rates

This card comes with no annual fee and functions as a charge card, meaning the balance must be paid in full each month. This setup eliminates interest charges entirely. Another key advantage? There’s no personal guarantee required, which keeps your personal assets separate from your business obligations.

Eligibility and Requirements

Brex evaluates your business’s financials rather than your personal credit. You’ll need an Employer Identification Number (EIN) to apply, and no personal credit check is involved. Credit limits can be significantly higher – up to 10–20 times more than traditional business cards. However, approval is easier for companies with strong cash reserves, steady revenue, or venture funding. Early-stage startups without robust financials may face challenges in qualifying.

Best Use Cases

This card is ideal for venture-backed startups, SaaS companies, and businesses with substantial software or travel expenses. For instance, a Series A startup heavily reliant on cloud services and frequent travel can maximize rewards and leverage partner discounts. Its global acceptance and local-currency billing make it especially appealing for businesses operating internationally. That said, companies with inconsistent cash flow or a need to carry a balance might find a traditional credit card with financing options more practical.

8. American Express Blue Business Cash Card

For small businesses and startups looking for a straightforward cash back option, the American Express Blue Business Cash Card stands out. With no annual fee, this card keeps things simple: earn 2% cash back on purchases up to $50,000 each year, and 1% cash back after that. There’s no need to juggle bonus categories or track complicated rewards systems, making it a reliable choice for businesses that value consistency.

Rewards and Benefits

Cash back is automatically applied as a statement credit, saving you time and effort. The card also offers flexibility with its expanded spending capacity, allowing you to exceed your credit limit based on your payment history and usage habits. Additional perks include purchase protection, extended warranty coverage, and access to American Express Offers, which provide discounts on business-related purchases. You can also issue employee cards at no extra cost and set individual spending limits to help monitor team expenses. Before committing, it’s worth reviewing the fees and interest terms to ensure this card fits your financial strategy.

Fees and Interest Rates

This card has no annual fee, making it an appealing option for businesses focused on keeping costs low. New cardholders enjoy a 0% introductory APR on purchases for the first 12 months, which can be especially helpful for managing cash flow during major purchases or the early stages of business growth. Once the promotional period ends, the variable APR ranges from 18.49% to 26.49%, depending on your creditworthiness. However, the card does come with a 2.7% foreign transaction fee, which may make it less suitable for businesses with frequent international spending. Be sure to consider these factors alongside the eligibility requirements.

Eligibility and Requirements

To qualify, applicants generally need a FICO score of 670 or higher. The business must be based in the United States, and you’ll need to provide both personal and business financial details, such as annual revenue and projected monthly expenses. Approval also takes into account factors like the age and financial stability of your business. In many cases, a personal guarantee is not required, which can be a plus for sole proprietors and small service-based businesses.

Best Use Cases

This card works best for businesses with moderate annual spending (up to $50,000) that prefer a simple, flat-rate cash back program. For example, a freelance graphic designer with $40,000 in annual expenses could earn around $800 in cash back each year. Its no-fuss rewards structure, lack of an annual fee, and tools for managing expenses make it a great fit for sole proprietors, consultants, and other service-based businesses with predictable spending habits. However, businesses with higher budgets or a need for travel perks may want to explore other card options.

9. Capital One Spark Classic for Business

The Capital One Spark Classic for Business is a solid choice for entrepreneurs and small business owners looking to build or improve their business credit. It prioritizes accessibility over luxury perks, making it a practical starting point for those who may not yet qualify for premium business credit cards. With its straightforward rewards program and credit-building potential, it serves as a helpful stepping stone in the business credit card market. Here’s a closer look at what it offers.

Rewards and Benefits

This card keeps things simple with unlimited 1% cash back on every purchase. While the rewards rate isn’t the highest on the market, it’s consistent and hassle-free – no rotating categories or spending caps to worry about. Plus, you can issue free employee cards with spending controls, which can help streamline expense management across your team.

Additional perks include fraud protection and access to Capital One’s business management tools, which let you track and analyze your spending patterns. For businesses with occasional international purchases, the card’s $0 foreign transaction fees add extra value. However, the primary benefit lies in its ability to help you build credit over time.

Fees and Interest Rates

One of the standout features of the Spark Classic is its $0 annual fee, making it a budget-friendly option for startups and small businesses looking to keep costs low while establishing credit.

The card’s variable APR is 29.99%, which is on the higher side compared to premium cards but typical for options aimed at applicants with fair credit. Standard fees apply for late payments and cash advances, so paying your balance in full each month is key to avoiding interest charges.

Eligibility and Requirements

The Spark Classic is designed for business owners with fair credit, typically a FICO score between 580 and 669. This lower credit threshold makes it accessible to entrepreneurs who might not yet qualify for higher-tier cards. To apply, you’ll need basic business details, such as your legal business name, address, estimated monthly revenue, and either an EIN or Social Security Number. The application process is quick and can be completed online, with decisions often provided promptly.

One important note: This card reports to personal credit bureaus, meaning your payment history will affect your personal credit score as well as your business credit.

Best Use Cases

The Spark Classic is a great fit for new businesses, sole proprietors, and entrepreneurs with limited credit history aiming to establish or rebuild their credit. For example, a freelance graphic designer just starting out could use the card for essentials like software subscriptions, marketing tools, and office supplies.

It’s also a useful option for businesses recovering from financial setbacks, providing a reliable payment method while working on credit improvement. Over time, responsible use can lead to credit limit increases and open doors to more rewarding credit card options or better financing opportunities.

While the Spark Classic is a strong choice for building credit, it’s worth considering an upgrade to a card with higher rewards or premium benefits once your credit profile improves. This card is best viewed as a stepping stone toward stronger financial footing.

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10. Valley Bank Visa® Secured Business Credit Card

The Valley Bank Visa® Secured Business Credit Card is tailored for small business owners looking to build or rebuild their business credit. Unlike traditional credit cards, this secured card requires a refundable security deposit, which also serves as your credit limit. This structure makes it a practical option for businesses with limited or less-than-ideal credit histories. Its primary focus is helping businesses establish a strong credit foundation, which is essential for managing day-to-day operations and unlocking future financial opportunities.

Rewards and Benefits

This card prioritizes credit-building features over flashy rewards programs. While it doesn’t offer cash back or points, it does provide essential benefits like fraud protection, purchase protection, and online account management tools – features you’d expect from a Visa business card. One of its standout advantages is that it reports your payment activity to major business credit bureaus, a critical step in building a solid business credit profile.

Other perks include access to basic business management tools and support from Valley Bank’s regional customer service team. While the card lacks extensive rewards, it delivers the core protections and tools needed for smooth daily operations.

Fees and Interest Rates

To open an account, you’ll need to provide a refundable security deposit – typically between $500 and $5,000 – based on your desired credit limit. This deposit is returned when you close the account in good standing or qualify for an upgrade to an unsecured card.

The annual fee ranges from $25 to $49, which is standard for secured business credit cards. Interest rates fall between 18.99% and 24.99% variable APR, reflecting the higher risk associated with secured cards. Additional fees apply for late payments, cash advances, and foreign transactions. Be sure to review Valley Bank’s fee schedule carefully before applying.

Eligibility and Requirements

This card is a viable option for businesses with credit scores below 670, making it accessible for startups, new entrepreneurs, and businesses recovering from financial challenges. To apply, you’ll need to provide your EIN, business registration documents, and proof of your business address.

A minimum security deposit of $500 is required, though you can deposit more to increase your credit limit. Valley Bank may also ask for a personal guarantee and will review both your business and personal credit histories. However, the approval criteria are more flexible compared to unsecured cards.

Best Use Cases

The Valley Bank Visa® Secured Business Credit Card is ideal for startups, new businesses, and entrepreneurs with little to no credit history. For example, a newly established marketing agency could use the card for routine expenses like software subscriptions, office supplies, or travel costs, all while building a positive payment history.

It’s also a helpful tool for businesses recovering from financial setbacks or those that have been declined for unsecured credit cards. With on-time payments over 12 to 18 months, you may qualify to upgrade to an unsecured card, reclaim your security deposit, and access higher credit limits.

To get the most out of this card, use it for regular purchases and aim to pay off the balance in full every month. This strategy not only avoids interest charges but also strengthens your business credit profile, paving the way for better financing options down the road.

11. Business Lines of Credit

A business line of credit is like having a financial backup plan at your fingertips. Unlike a traditional loan that gives you a lump sum upfront, a line of credit lets you borrow only what you need, when you need it, up to a set limit. You’ll pay interest solely on the amount you use, making it a flexible way to handle fluctuating cash flow.

Think of it as a revolving credit account: you can borrow, repay, and borrow again as needed. This makes it particularly useful for managing seasonal changes, unexpected costs, or urgent opportunities. It’s a practical tool that complements the revolving credit options we’ve discussed earlier.

Fees and Interest Rates

Let’s talk numbers. Interest rates for business lines of credit generally range from 8% to 24% APR, depending on factors like your credit score and revenue history. Traditional banks such as Chase, Bank of America, and Wells Fargo often offer lower rates, starting around 7% to 10% APR for businesses with strong financials. On the other hand, online lenders may charge higher rates – sometimes up to 25% APR – but they often provide quicker approvals and more flexible requirements.

In addition to interest, there are other costs to consider. Annual fees typically fall between $95 and $150, and some lenders charge draw fees of 1% to 3% each time you access funds.

Credit limits vary widely. For most small businesses, limits range from $10,000 to $250,000, though traditional banks may extend limits up to $500,000 for well-qualified borrowers. Online lenders like BlueVine and OnDeck usually cap their lines at $250,000.

Eligibility and Requirements

To qualify, lenders generally expect businesses to have been operating for 6 to 12 months with annual revenue between $50,000 and $100,000. Your credit score also plays a big role. Online lenders typically accept scores of 600 or higher, while traditional banks prefer scores of 680 or above.

Be ready to provide financial statements, tax returns, and proof of revenue to demonstrate your financial health. Some lenders may require a personal guarantee, meaning you’ll be personally liable if your business can’t repay the debt. If you’re applying for a secured line of credit, you’ll likely need to offer collateral, such as inventory, accounts receivable, or equipment.

Secured lines tend to come with lower interest rates and higher limits, while unsecured lines require a stronger credit profile and often carry higher rates.

Best Use Cases

Business lines of credit shine when it comes to handling working capital and short-term financial needs. For instance, a retail business might use one to stock up on seasonal inventory before the holiday rush, repaying the borrowed amount as sales pick up. Similarly, a consulting firm could tap into a line of credit to cover payroll during slower months, borrowing only what’s necessary until new contracts roll in.

They’re also great for unexpected expenses like equipment repairs or emergency travel, helping you manage costs without disrupting your cash flow. However, they’re not ideal for long-term investments like purchasing major equipment or real estate – other financing options are better suited for those purposes.

Interestingly, the Federal Reserve’s 2024 Small Business Credit Survey found that 40% of small businesses applied for a line of credit in the past year, with established businesses seeing approval rates of around 60%.

12. SBA Loans

SBA loans are a financing option backed by the U.S. Small Business Administration (SBA), offering small businesses access to better rates and terms than traditional bank loans. While the SBA itself doesn’t lend money, it guarantees a portion of the loan provided by approved lenders. This reduces the risk for lenders and allows small business owners to secure financing even if they have limited collateral or a shorter operating history.

In fiscal year 2024 alone, the SBA approved over $27.5 billion in 7(a) loans and $8.2 billion in 504 loans, underscoring the critical role these loans play in supporting small businesses across the country.

Fees and Interest Rates

One of the biggest advantages of SBA loans is their competitive fees and interest rates. For 7(a) loans, rates are variable, tied to the prime rate, and typically range from prime + 2.25% to prime + 4.75%, depending on the loan amount and term. On the other hand, 504 loans offer fixed interest rates between 3% and 6%, making them an appealing option for long-term investments.

When it comes to fees, borrowers should expect a guarantee fee ranging from 0.25% to 3.75% of the guaranteed portion of the loan. Additional costs, such as packaging and closing fees, may also apply. The good news? Prepayment penalties are rare, so you can pay off your loan early without incurring extra charges.

Here’s a quick breakdown of the main SBA loan types:

Eligibility and Requirements

To qualify for an SBA loan, your business must meet certain requirements. First, it must operate for profit within the United States and meet the SBA’s size standards, which generally apply to businesses with fewer than 500 employees. You’ll also need to show a legitimate need for the loan and the ability to repay it.

A personal credit score of 650-680 or higher is usually expected, along with solid business financials. If you own 20% or more of the business, you’ll need to provide a personal guarantee, which holds you personally responsible if the loan isn’t repaid. For loans over $25,000, collateral is often required, though a lack of collateral doesn’t automatically disqualify you.

The application process involves gathering detailed documentation, including financial statements, tax returns, a detailed business plan, and information on any collateral you can offer. Because of these requirements, approval can take several weeks to a few months, so SBA loans are better suited for planned investments rather than urgent cash needs.

Best Use Cases

SBA loans are a great choice for businesses planning large, strategic investments. The 7(a) program is versatile, covering needs like working capital, equipment purchases, real estate acquisition, and business expansion. If you’re looking to purchase property or major equipment, the 504 loan is an excellent option, requiring as little as 10% down and offering fixed rates for up to 25 years.

For smaller funding needs, microloans of up to $50,000 are ideal. The average microloan is about $13,000, making it a practical choice for startups or businesses needing modest capital to grow or make improvements.

For example, a manufacturing company in Ohio used a 504 loan to purchase a new facility with just 10% down and a 20-year fixed rate. This move allowed them to expand operations, hire more staff, and maintain steady cash flow.

While SBA loans aren’t the best solution for urgent cash flow needs due to their lengthy approval process, they’re a smart choice for refinancing existing debt, funding major investments, or supporting long-term growth. If you’re planning for the future, SBA loans provide one of the most reliable and affordable financing options available.

13. Online Business Loans

Online business loans provide a modern way for businesses to secure financing, offered by non-bank lenders through entirely online processes. Unlike traditional bank loans, which often require extensive paperwork and in-person visits, online lenders simplify the process, enabling businesses to apply, get approved, and access funds quickly – often in just a few days.

The popularity of online lenders is growing, with over 30% of small businesses now using them, compared to 24% in 2022. This shift highlights the increasing demand for faster, more accessible financing options that align with the pace of today’s business world.

Fees and Interest Rates

While online business loans are convenient, they often come with higher costs compared to traditional bank loans. Annual percentage rates (APRs) typically range from 7% to 99%, depending on the lender, loan type, and your credit profile.

Most lenders charge an origination fee between 1% and 6%, which may be deducted from your loan amount or added to the total balance. On the upside, many reputable online lenders waive late fees and prepayment penalties.

Loan amounts generally fall between $5,000 and $500,000, with repayment terms ranging from 3 months to 5 years. Shorter repayment periods often result in higher monthly payments but can save you money on interest over the life of the loan.

These features make online loans a flexible and efficient option for businesses that need funding quickly.

Eligibility and Requirements

Online lenders typically have more relaxed eligibility criteria than traditional banks, making them a viable option for newer businesses or those with less-than-perfect credit. Most require your business to have been operating for 6-12 months, with minimum annual revenue of $50,000 to $100,000.

A credit score of 600 or higher is usually expected, though some lenders may work with lower scores. Required documents often include recent bank statements, tax returns, and proof of revenue. Many online lenders also evaluate cash flow and sales volume instead of relying solely on credit scores.

The application process is designed to be user-friendly. You’ll need to submit your business details, including your EIN and business address, along with financial statements and sometimes a basic business plan. Thanks to technology-driven underwriting, decisions are often made much faster than traditional banks can manage.

Best Use Cases

Online business loans are ideal for businesses that need fast access to funds for short-term needs or growth opportunities. Common uses include purchasing inventory, covering payroll during slow periods, funding marketing campaigns, or bridging cash flow gaps while waiting for customer payments.

These loans are especially helpful when you need funds within 24-72 hours, as opposed to waiting weeks for bank approval. They’re also a good alternative if your business doesn’t qualify for traditional bank loans due to limited credit history, a lack of collateral, or operating in a newer industry.

For short-term needs like equipment purchases or cash flow gaps, term loans or lines of credit from online lenders can be a practical solution. However, for long-term financing, lower-cost options like SBA loans may be a better fit. The higher costs of online loans make them most suitable for situations where speed and convenience are critical, or when you can generate quick returns to offset the higher interest rates.

Some of the top online lenders include Kabbage (now part of American Express), OnDeck, Fundbox, BlueVine, and LendingClub, each offering tailored products to meet varying business needs and industries.

14. Invoice Financing

Invoice financing is a way for businesses to get immediate cash by using their unpaid invoices as collateral. Instead of waiting the typical 30–90 days for customers to pay, you can receive a percentage of the invoice value upfront. Once the customer pays, the lender collects the remaining balance, minus fees. This approach helps maintain steady cash flow, especially during periods when payments are delayed.

According to the Federal Reserve’s 2024 Small Business Credit Survey, over 12% of small businesses in the U.S. relied on invoice financing or factoring last year to manage cash flow challenges. Globally, the invoice financing market hit over $2 trillion in 2023, with the U.S. playing a major role due to its high volume of B2B transactions and extended payment terms.

Fees and Interest Rates

The cost of invoice financing is tied to usage rather than traditional interest rates. Most providers charge monthly fees between 1% and 5% of the invoice value. The total cost depends on how quickly your customers settle their invoices.

Advance rates usually range from 70% to 90% of the invoice value. For example, with a $10,000 invoice, an 85% advance would give you $8,500 upfront. If the customer pays in one month and the fee is 3%, you’d pay $300 in fees and receive the remaining $1,200 after payment.

The effective annual percentage rate can range from 15% to 60% or more, depending on factors like your customers’ creditworthiness and how quickly they pay.

Eligibility and Requirements

Invoice financing is easier to qualify for compared to traditional loans. Providers focus more on your customers’ ability to pay than your business credit score, making it a good option for newer businesses or those with limited credit history.

To qualify, your business generally needs to:

• Be a registered U.S. entity.
• Issue invoices to other businesses or government agencies.
• Have invoices with payment terms between 30 and 90 days.
• Meet minimum revenue requirements set by the lender.

Lenders usually require recent invoices, customer payment history, and basic business documentation. Since personal credit checks are less critical, this option is accessible even if your personal credit isn’t strong.

Best Use Cases

Invoice financing is ideal for B2B companies with long payment cycles, such as staffing agencies, wholesalers, manufacturers, and professional service providers. It’s particularly useful for businesses with strong sales but cash flow gaps caused by slow-paying clients.

For example, in June 2024, BlueVine supported a California-based logistics firm with $2.5 million in annual revenue. The firm received 85% advances on invoices, reduced its average days sales outstanding from 60 to 35 days, and achieved a 22% increase in monthly cash flow. This allowed them to take on larger contracts and hire additional staff.

This financing works well for covering payroll, purchasing inventory, or managing operations while waiting for payments. It’s especially helpful for businesses experiencing rapid growth or seasonal fluctuations since funding scales with sales volume.

However, it may not be the best fit if you have only a few outstanding invoices, serve primarily consumers instead of businesses, or qualify for lower-cost financing options like SBA loans. Given the higher fees, invoice financing is better suited as a short-term solution rather than a long-term fix for ongoing cash flow issues.

The rise of digital platforms has made invoice financing even more accessible. These platforms offer faster approvals, automated processes, and integration with accounting software, making it easier for small businesses to access funds quickly. As competition among fintech companies increases, costs are coming down, and more businesses are benefiting from this flexible financing option.

15. Merchant Cash Advances

Merchant cash advances (MCAs) provide quick access to funds by advancing a portion of your future credit card sales or bank deposits. Unlike traditional loans with fixed monthly payments, MCAs are repaid through a percentage of your daily sales. This repayment structure makes them appealing to businesses with unpredictable revenue – like restaurants or retail shops – that may not qualify for standard loans.

The MCA industry has grown as small businesses increasingly seek alternatives to traditional bank financing. These advances typically don’t require collateral or a high credit score, making them accessible to businesses that might struggle with conventional funding. However, while they offer speed and ease of access, repayment terms can be expensive.

Fees and Interest Rates

MCAs use a factor rate (ranging from 1.2 to 1.5) instead of traditional interest rates to determine the repayment amount. For example, if you receive a $10,000 advance with a 1.3 factor rate, you’d repay about $13,000 in total. The effective annual percentage rates (APRs) for MCAs can range from 40% to over 350%, making them one of the costliest business financing options.

Eligibility and Requirements

Approval for an MCA depends primarily on your business’s sales volume. Most providers require a minimum monthly revenue of $5,000 to $10,000 and three to six months of operational history. You’ll need to submit bank or credit card processing statements to verify consistent sales.

Since MCAs don’t rely heavily on personal credit checks, they can be a viable option for business owners with limited credit histories. However, providers will still evaluate your business’s bank deposits, and some may ask for a personal guarantee.

The application process is typically straightforward, requiring basic business documentation and proof of credit card sales. Many applications are approved within hours, making MCAs a fast funding solution compared to traditional loans.

Best Use Cases

MCAs are best suited for businesses with high credit card transaction volumes and urgent funding needs. For instance, a small restaurant in New York required $20,000 for kitchen renovations. The owner secured an MCA at a 1.3 factor rate, repaid through a 15% daily deduction from credit card sales. While the funds were available within two days, the high repayment amount and daily deductions put a strain on cash flow. This example highlights the importance of evaluating your cash flow before committing to an MCA.

These advances can also help cover immediate expenses like equipment repairs, inventory restocking, or payroll during cash flow gaps. Seasonal businesses may find them useful as well, as higher sales during peak periods lead to larger repayments, while slower months result in smaller deductions.

That said, financial advisors often recommend MCAs as a last-resort option due to their high costs. Exploring traditional loans, lines of credit, or SBA financing is usually a better first step. The daily payment structure of MCAs can sometimes create a cycle of debt if your business isn’t prepared to handle regular deductions. Before committing, carefully assess whether your cash flow can support the repayment terms without disrupting operations, and consult a financial advisor to fully understand the costs involved.

Pros and Cons

Choosing the right financing option depends on weighing the benefits and drawbacks of each choice to align with your business needs. Below, we break down the key points to help guide your decision.

Business credit cards provide flexibility and help build credit, but they come with the risk of accumulating debt. SBA loans, on the other hand, offer lower interest rates and longer repayment terms, though they require extensive documentation and take longer to process. Alternative financing, such as online loans or merchant cash advances, delivers fast funding but often at a much higher cost.

For example, a tech startup might benefit from a credit card with high limits and no personal guarantee, while a seasonal retailer may prefer the flexibility of a revolving line of credit. The table below summarizes the main pros and cons of various options to make comparison easier:

Businesses with excellent credit can access premium cards like the Chase Ink Business Preferred®, which has earned a 4.5/5 NerdWallet rating. Meanwhile, businesses with limited credit history might explore secured cards or fintech solutions like Brex, which prioritize business performance over personal credit scores.

The cost of funding varies widely. For instance, merchant cash advances provide the fastest access to cash but come with steep expenses (APRs as high as 350%). SBA loans, while slower to process, offer the most affordable rates.

Cash flow considerations also differ. Credit cards and business lines of credit allow interest to accrue only on the amount used, offering flexibility. However, carrying balances can become expensive. In contrast, merchant cash advances impose immediate pressure through daily payment deductions.

Approval timelines are another factor. Online business loans and merchant cash advances can provide funds within 24–48 hours, whereas SBA loans may take several months. Traditional business credit cards fall somewhere in between, typically offering decisions within about a week.

Conclusion

Choosing the right credit cards and financing options for your business means aligning them with your specific needs, spending habits, and growth stage. Established companies can benefit from premium cards that offer generous rewards, even if they come with higher annual fees. On the other hand, startups and newer businesses might find options like Brex appealing, as it evaluates business performance rather than personal credit for approval.

To make the most of your financial tools, consider your business goals. If cash flow is a priority, look for cards with unlimited cash back and no preset spending limits. For companies with fluctuating expenses or limited credit history, no-fee cards can help build credit while earning rewards.

When it comes to financing beyond credit cards, timing and costs are key. SBA loans are known for their low rates, though they require significant paperwork and have longer approval times. Online loans and merchant cash advances provide quick access to funds but often come with higher costs. Business lines of credit offer a middle ground, giving flexible access to funds with interest charged only on what you use. Each option offers a unique balance between speed, cost, and flexibility.

Modern credit cards also simplify operations by integrating with expense management software, making it easier to track and control spending. For businesses looking to establish U.S. credit, starting with proper formation and documentation is crucial. BusinessAnywhere makes this process seamless by offering a $0 business formation service (plus state fees), which includes EIN registration and credit-building tools. This streamlined approach pairs well with the variety of credit and financing solutions available.

Ultimately, successful financing comes down to evaluating your primary spending needs, comparing products based on rewards, fees, and limits, and using professional services to set up your business properly. The comparisons provided here are designed to help you choose options that align with your operational needs. Whether you’re launching a startup, running a seasonal business, or scaling an established company, the right mix of financing can give you the flexibility to achieve your goals.

FAQs

What should I consider when deciding between a business credit card and a business line of credit?

When choosing between a business credit card and a business line of credit, it’s all about understanding your financial needs and how you intend to use the funds.

A business credit card works well for managing everyday expenses, especially if you’re looking to earn perks like cash back or travel rewards. It’s a convenient option for smaller, recurring purchases and is a great way to keep business and personal expenses separate.

A business line of credit, however, offers more flexibility for accessing larger amounts of money. This makes it a better fit for covering major costs, such as buying inventory or handling unexpected expenses. While lines of credit often come with lower interest rates compared to credit cards, qualifying for one may require more paperwork and financial documentation.

To decide, think about the size and frequency of your expenses, the repayment terms you prefer, and whether you prioritize rewards or lower interest rates.

What are the rewards and benefits of different business credit cards, and how can I choose the right one for my business?

Business credit cards can be a smart way to earn rewards and enjoy perks tailored to your business needs. Many cards offer cash back, travel rewards, or special discounts on common business expenses. On top of that, you might find benefits like extended warranties, purchase protection, or even tools to help manage your business finances and track spending.

When deciding which card is the best fit, think about your spending patterns and priorities. Do you spend a lot on office supplies, travel, or dining? Look for cards with rewards in those categories. Pay attention to annual fees, introductory offers, and the card’s interest rates to ensure they align with your budget and cash flow. By weighing these factors, you can find a card that not only meets your needs but also helps you reach your business goals.

What are the pros and cons of choosing online business loans versus traditional SBA loans?

When weighing the choice between online business loans and traditional SBA loans, it’s important to consider the specific needs of your business. Each option has its strengths and challenges.

Online business loans are a great choice if speed is a priority. Many lenders can approve applications and provide funding within 24 to 48 hours. They also tend to have more lenient eligibility criteria, which can be helpful for newer businesses or those with credit issues. The trade-off? These loans often come with higher interest rates and shorter repayment periods, which could increase the overall cost.

Meanwhile, SBA loans stand out for their lower interest rates and longer repayment terms, making them a more budget-friendly option in the long run. However, they require a more detailed application process, including extensive paperwork, and approval can take significantly longer. This makes them less suitable if you’re in a rush to secure funding.

To decide, think about your business’s current financial health and how quickly you need the funds. Matching your loan choice to your timeline and goals can make all the difference.

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