A true bank business line of credit typically requires a 680+ personal credit score, two or more years in business, and solid revenue — roughly the same bar as an SBA loan. That surprises people, because lines of credit are marketed as the easy, flexible product. They're not. They're one of the hardest products to get and one of the most commonly faked in financing marketing. Here's how to tell the real thing from the costume.
What a Line of Credit Actually Is
A line of credit is revolving capital: the lender approves a limit, you draw what you need when you need it, you pay interest only on what's drawn, and as you repay, the capital becomes available again. It's the right structure for businesses with uneven cash flow — covering payroll between receivables, buying inventory ahead of a season, bridging a slow month — because you're not paying for money you aren't using.
That structure is also why banks guard it carefully. With a term loan, the lender's risk is fixed on day one. With a line, the borrower controls when and how much to draw — including, in theory, drawing the full limit the week before things fall apart. Banks price and underwrite for that, which is why the credit bar is high.
What Banks Actually Require
| Factor | Bank Line of Credit | Fintech "Line of Credit" |
|---|---|---|
| Personal credit | 680+, often 700+ | 600–640+ |
| Time in business | 2+ years | 6 to 12 months |
| Annual revenue | Generally $250K+ | $100K+ |
| Cost | Prime + 1 to 3% (~7.75 to 9.75% today) | Often 20 to 60% APR equivalent |
| Structure | True revolving, monthly interest | Frequently draw-based installments with weekly payments |
The right column matters. Many products marketed as "lines of credit" are functionally short-term loans issued in draws: each draw becomes its own fixed repayment schedule, often weekly, with a fee structure closer to a factor rate than an interest rate. That's not automatically bad — it's faster and more accessible — but it isn't the flexible, cheap revolving credit the word "line" implies. Read how repayment works before you read anything else.
The Conversion Myth
Here's the pitch we want you to recognize, because it's one of the most common in the industry: "Take this advance now, make your payments for a few months, and we'll convert you into a line of credit." In our experience, that conversion almost never materializes the way it's described. What actually happens is a renewal offer — another advance, sometimes slightly larger or slightly cheaper, when you've paid down enough of the first one. The "line of credit" stays twelve months away forever.
If a broker dangles a future line of credit to justify an expensive product today, ask one question: "What are the specific, written criteria for the conversion, and is it in the agreement?" If the answer is vague — and it will be — you have your answer. Make the decision on the product in front of you, not the one being promised.
How to Actually Get One
The path to a real line of credit is the same as the path to any bank product: build business credit deliberately, keep your personal score above the bar, show two years of clean financials, and bank where you'll borrow — banks extend lines to deposit customers they can see. If you're not there yet, a smaller fintech line or a working capital loan can bridge the gap, as long as you price it honestly and don't let renewals stack. And check your UCC filings first — a stale blanket lien from an old advance will block a new line faster than your credit score will.
Frequently Asked Questions
Most banks want a 680+ personal credit score for a true revolving line of credit, and many prefer 700+. Fintech lines approve at 600–640, but cost significantly more and are often structured as draw-based installment loans rather than true revolving credit.
Almost never in the way it's pitched. What usually materializes is a renewal offer — another advance once you've paid down the first. If a conversion is promised, ask for the specific written criteria in the agreement. Evaluate the product in front of you, not the promised one.
A line of credit is revolving — draw, repay, draw again, paying interest only on what's outstanding. A working capital loan is a lump sum with a fixed repayment schedule. Lines suit recurring cash-flow gaps; term loans suit one-time needs.