Business line of credit · Rates
Business Line of Credit Rates in 2026: What You Will Actually Pay
Business line of credit rates in October 2026 run from about 8% APR at a bank for a strong borrower to 60% or more at an online lender for a young business with fair credit. The spread is that wide because the word “line of credit” covers four very different products. This guide breaks down what each one costs, what moves your rate, and how to compare offers that quote weekly fees instead of an APR.
What Does a Business Line of Credit Cost Right Now?
With the prime rate at 7.00%, bank business lines of credit are pricing at roughly Prime + 1% to Prime + 4%, or 8% to 11% APR, for established businesses with 700+ credit. SBA Express lines are capped at Prime + 4.5% to 6.5% (11.5% to 13.5%). Online and fintech lines run 15% to 35% APR for good credit and 35% to 60%+ for fair credit or businesses under two years old. Most lines also carry a draw fee, an annual fee or a monthly maintenance fee, so the APR alone understates the true cost.
Rates by Type of Lender
| Lender type | Typical APR (Oct 2026) | Common fees | Best for |
|---|---|---|---|
| Bank or credit union | 8–11% | $0–$250 annual fee | 2+ years in business, 700+ credit, clean financials |
| SBA Express / CAPLines | 11.5–13.5% | SBA guaranty fee on lines over $1M; packaging | Growing firms that can wait 2–6 weeks |
| Online lender (A/B credit) | 15–35% | Draw fee 1–3% or monthly fee | 6+ months in business, 640+ credit, need funds in days |
| Online lender (C/D credit) | 35–60%+ | Weekly or monthly fee, origination | Under 1 year in business or sub-640 credit |
| Asset-based (A/R or inventory) | 9–18% | Monitoring and audit fees | Companies with $1M+ in receivables |
Bank lines are the cheapest money available and the hardest to get. Most banks want two full years of returns, a debt service coverage ratio of at least 1.25, and often a deposit relationship. Online lenders price for speed and looser underwriting: they fund in one to three days and will look at bank statements instead of tax returns, and the rate reflects that. Asset-based lines sit in between because the collateral, not your credit score, carries most of the risk.
Where business line of credit APRs land in 2026
Ranges reflect offers across the RAN Funding lender network in October 2026 with Prime at 7.00%. Individual quotes vary by revenue, time in business and credit.
What Moves Your Rate Inside the Range
Five things decide where you land. Lenders weigh them differently, but every underwriter looks at all five.
| Factor | Effect on rate | What helps |
|---|---|---|
| Personal credit score | Largest single factor at online lenders | 720+ unlocks the bottom of the range; under 640 adds 10–20 points of APR |
| Time in business | Under 2 years is priced as start-up risk | Crossing 12 months and 24 months each opens cheaper lenders |
| Annual revenue and cash flow | Sets the limit and the tier | $250K+ in deposits with few negative days gets A-tier pricing |
| Secured vs. unsecured | Collateral cuts the rate 3–8 points | A blanket UCC lien, a CD or a real estate pledge |
| Existing debt | Stacked loans and MCAs raise the rate or kill the deal | Pay off short-term advances before applying |
Industry matters too. Restaurants, trucking, construction and cannabis-adjacent businesses pay more at most online lenders; professional services, medical practices and B2B firms with recurring revenue pay less. See secured vs. unsecured lines for how collateral changes the math.
The Fees That Hide Behind the Rate
A line of credit at 12% with a 2% draw fee and a $150 annual fee is not a 12% product if you draw $20,000 twice a year and pay it back in 60 days each time. Ask about every one of these before you sign.
- Draw fee — 1% to 3% of each advance, charged by most online lenders. On short draws it can double the effective APR.
- Annual or monthly maintenance fee — $0 to $250 a year at banks; $20 to $50 a month at some fintechs whether you draw or not.
- Origination fee — 0% to 3% of the credit limit at setup, more common on larger or asset-based lines.
- Inactivity fee — charged by a few lenders if you do not draw for 6 to 12 months.
- Late and NSF fees — $25 to $50 per missed weekly or monthly debit.
- Prepayment — true revolving lines have none; “lines” that are really term loans in disguise often do.
APR vs. Weekly Fee Pricing: How to Compare Offers
Banks and SBA lenders quote an APR. Many online lenders quote a “simple interest rate,” a “fee rate” or a weekly payment instead. Those numbers look smaller than they are because they ignore how quickly you repay. The only fair comparison is the total dollar cost over the same draw amount and the same payback period.
| Offer | How it is quoted | $25,000 draw, 6-month payback | Approximate APR |
|---|---|---|---|
| Bank line | 9.5% APR | $715 interest | 9.5% |
| Online line A | 1.5% draw fee + 1.2% per month on balance | $375 fee + $1,050 interest = $1,425 | ~20% |
| Online line B | “6-month simple interest rate of 9%” | $2,250 fee | ~31% |
| Online line C | Weekly payment schedule, “factor” 1.14 | $3,500 fee | ~48% |
Offer B looks like 9% and Offer A looks like 1.2%, but both cost more than the bank line, and Offer B costs more than Offer A. Always ask the lender for the APR; in states with commercial financing disclosure laws (California, New York, Utah, Virginia, Georgia, Florida, Connecticut, Kansas and others) they are required to give you an APR or a total cost figure in writing before you sign.
Total cost of a $25,000 draw repaid over six months
Same draw, same payback period. The quoted “rate” on the three online offers was 1.2% monthly, 9% simple and a 1.14 factor respectively.
Fixed vs. Variable: Will Your Rate Change?
Bank and SBA lines are almost always variable and tied to the prime rate. When the Federal Reserve moves, your rate moves within one billing cycle. Prime has fallen from 8.50% in 2024 to 7.00% today, so bank lines have gotten cheaper, and most forecasts call for Prime to drift lower into 2027. Online lenders usually fix the fee on each draw at the time you take it, so the cost of an existing draw does not change, but the rate on your next draw can be repriced at any renewal. If you plan to carry a balance for more than a year, a variable bank line in a falling-rate environment is usually the better bet; if you want a fixed payment for a one-time purchase, compare the line against a term loan or equipment financing.
How to Get a Lower Rate
Rates are negotiable more often than owners expect, especially when you bring a competing offer. Work on these before you apply.
- Pull your personal and business credit. Dispute errors and pay revolving balances under 30% of the limit; a 20-point score bump can move you a full tier.
- Clean up the bank statements. Lenders read the last 3 to 6 months. Avoid overdrafts and NSFs, and keep a cushion in the account for 90 days before applying.
- Pay off merchant cash advances. Stacked daily-debit advances are the fastest way to a decline or a 50% APR. Consider a reverse consolidation if you cannot pay them off outright.
- Offer collateral or a CD. A secured line is typically 3 to 8 points cheaper than the same lender’s unsecured line.
- Apply to a bank where you deposit. Relationship pricing is real, and many banks will match an outside offer.
- Use a broker to shop the whole market at once. One application across 20+ lenders shows you the bottom of the range without 20 credit pulls; see how limits are set to know what to ask for.
How RAN Funding Prices Business Lines of Credit
We are a broker, not a lender, so we do not set the rate; the funding partner does. What we do is match your file to the lenders whose credit box you fit, which is where most of the savings comes from. A business that qualifies for a bank line should never pay fintech pricing, and a business that cannot get a bank line in time should not waste six weeks finding that out. Our lender network covers bank, SBA Express, asset-based and online lines, and we show you the APR and the total cost side by side before you commit. Most applicants have offers within 24 hours. Learn more about how our business line of credit program works, or check your options with no impact to your credit.
Common Questions
What is a good interest rate on a business line of credit?
In 2026, anything under 12% APR is a good rate and is usually only available from a bank, credit union or SBA lender. For online lines, 15% to 25% is competitive for an established business with good credit. Above 35% you are paying for speed or weak credit, and it is worth asking what would move you to a cheaper tier.
Are business line of credit rates higher than business loan rates?
Usually slightly, by one to three points, because the lender commits capital you may not draw and the balance is unpredictable. The trade-off is that you pay interest only on what you use, so a line is often cheaper in total than a term loan for short, recurring needs.
Do business lines of credit have variable rates?
Bank and SBA lines are typically variable, tied to the prime rate plus a margin. Many online lenders fix the fee on each draw at the time you take it, so the cost of an outstanding draw does not change even if the lender reprices new draws.
What is the interest rate on an SBA line of credit?
SBA Express lines are capped at Prime + 6.5% for lines up to $50,000 and Prime + 4.5% above $50,000, which is 13.5% and 11.5% with Prime at 7.00%. SBA CAPLines follow standard 7(a) rate caps, roughly Prime + 3% to 6.5% depending on size.
Can I get a business line of credit with no annual fee?
Yes. Several banks and most online lenders waive annual fees, though online lenders typically charge draw fees instead. Compare the total cost on the way you actually plan to use the line rather than any single fee.
Is interest on a business line of credit tax deductible?
Interest paid on funds used for business purposes is generally deductible as a business expense. Fees are also typically deductible. Confirm with your CPA, especially if you use part of the line for personal expenses.
Sources
- Selected Interest Rates (H.15) — Bank prime loan rate — Federal Reserve
- 7(a) loan program terms, conditions and eligibility — maximum interest rates — U.S. Small Business Administration
- Small Business Lending Survey, Q2 2026 — Federal Reserve Bank of Kansas City
- Commercial financing disclosure laws by state — Consumer Financial Protection Bureau / state regulators
See What You Qualify For
One application, about five minutes, soft pull only. A funding specialist tells you up front whether SBA is realistic for your file — and which faster products fit if it is not.