Get approved in minutes for a business line of credit with flexible loan terms and no extra fees.
Expert take: Qualifications for the American Express® Business Line of Credit are relatively easy. Still, it’s wise to compare other loan options to make sure you’re not paying more than necessary.
Pros
- Reasonable minimum FICO score requirement
- Streamlined application process
- Finance options from $2,000 to $250,000
- No application, origination, annual or monthly maintenance fees
- No prepayment penalties
Cons
- Unique monthly pricing structure makes it difficult to compare against competitors
- Personal guarantee required
- Monthly fees can be costly depending on your borrowing amount.
Vault’s Viewpoint on American Express® Business Line of Credit
American Express® Business Line of Credit is worth considering if you want regular access to funds as needed. Eligibility requirements are lower than many other lenders, which could be helpful for newer businesses and business owners with low revenue.
Unfortunately, American Express doesn’t offer term business loans—its business lending is restricted to lines of credit. As such, you can’t use it to take out a loan for a large lump sum of capital for a large purchase or investment. But this Amex line of credit may deliver up to $250,000 in automatic funding—or more pending a company review of your business.
While this cap isn’t the highest in the space, it’s sufficient for many small businesses. The American Express Business Line of Credit delivers enough benefits to warrant consideration from small business owners. While the unique monthly payment structure makes it hard to compare costs versus other lenders, Amex comes through with reasonable qualification standards, no origination or maintenance fees and no prepayment penalties.
All businesses are unique and are subject to review and approval.
About American Express® Business Line of Credit
One aspect of Amex’s business line of credit that stands out is its pricing structure. Each time you draw on your credit line, it becomes a separate installment loan. And unlike its competitors, American Express doesn’t charge borrowers a traditional business loan interest rate on top of their principal balance. Instead, the company imposes a proprietary fee structure based on your loan term, which can be 6, 12, 18 or 24 months.
The repayment periods for these lines of credit are shorter than those for traditional loans, which could make it more difficult to keep up with the potentially higher monthly payments.
Additionally, American Express sets minimum draw amounts that vary depending on your available balance, which work as follows:
- Less than $500 available: $100 minimum draw
- More than $500 available: $500 minimum draw
- 12- and 18-month loan term lengths: $10,000 minimum draw
- 24-month loan term length: $20,000 minimum draw
The American Express Business Line of Credit is a flexible finance option with a simple application process and attainable qualifications. By linking your bank account to American Express, you may sidestep time-consuming paperwork and obtain a decision in minutes.
| Loan amount | From $2,000 to $250,000 |
| Fees | Total monthly fee amount based on loan term: 6-month loans: 3.00% to 9.00% Loan fee applies only in months when there’s an outstanding balance. Late fees range from $10 to $100, depending on loan amount. No origination or maintenance fee |
| Credit score | Minimum FICO score of at least 660* at the time of application |
| Repayment schedule | Requires monthly payment but can pay off before term expires without prepayment penalty |
| Funding speed | One to three business days |
| APR | Not applicable. Use a monthly fee instead. |
| Credit line availability | Available to borrowers who: Are at least 18 years old |
Who is American Express® Business Line of Credit Best For?
The Amex business credit line may be a solid option for businesses with fair credit and minimal revenue. Busy business operators will also appreciate Amex’s automated online application process, which saves a lot of time filling out an application online, at a branch office or over the phone.
Who Should Consider an Alternative to American Express?
The American Express Business Line of Credit may not be an option for new business owners, as you must have started your business at least one year ago to be eligible.
Businesses needing a large lump-sum payment or a line of credit larger than $250,000 should shop and compare other lenders. American Express doesn’t offer term loans or sizable business lines of credit.
Finally, if you’re interested in a longer-term loan, be aware that Amex’s unusual pricing structure charges more for longer durations. It might make sense to consider alternative lenders to minimize your business costs.
How Does American Express® Business Line of Credit Stack Up to Its Competitors?
Not sure whether American Express’s business credit line covers your business’s unique needs? Here’s a snapshot of how this Amex product compares against other business lines of credit.
American Express vs. Chase
Chase business loans include commercial real estate loans and business lines of credit. Like the Amex business line of credit, the maximum amount you can request online is $250,000. Chase does approve business lines up to $500,000. For their part, American Express says you may qualify for more than $250,000 but doesn’t state the maximum cap on its website. Another option worth considering is the Chase Commercial Line of Credit, which offers a $500,000 line of credit.
Also, Chase offers a revolving period of five years, followed by a five-year repayment period. This repayment period is longer than American Express, so you could have more flexibility to repay your loan but would pay more interest charges over time.
Comparing borrowing costs for Chase and American Express credit lines can be challenging. Chase doesn’t disclose a specific APR, and its website suggests consulting a branch manager for current rates.
American Express vs. Fundible
While American Express’s line of credit qualifications should be attainable for most new businesses, Fundible’s standards are even more lenient. So Fundible’s line of credit may be worth exploring if you have bad credit.
To qualify, your company only needs to be in business for six months compared to Amex’s one-year requirement. And you may qualify for a credit line with a FICO Score of at least 500, which is much lower than American Express’s credit score requirement. But Fundible requires at least $8,000 in monthly revenue for your three most recent bank statements, which is $5,000 per month more than American Express requires.
Like American Express, Fundible also features a streamlined application process and can quickly approve your business loan or credit line. If approved, Fundible states it can issue funds within 24 hours.
American Express vs. OnDeck
OnDeck offers term loans (maximum $250,000) and business lines of credit, while American Express only offers a business line of credit. OnDeck’s credit line is smaller (maximum of $100,000) and you may qualify if you’ve been in business for at least a year. But OnDecks’ 625 credit score requirement is lower. Another big difference between these two credit line providers is that OnDeck requires businesses to earn $100,000 annually, which is much higher than American Express. Also note that OnDeck’s interest rates are substantially higher and could prove more expensive than American Express’s fees. Its website states the average APR for credit lines is a staggering 52.6%.
Frequently Asked Questions
How Do I Increase My Amex Business Line of Credit?
To increase the limit on your American Express business line of credit, the company advises linking your business bank account to Amex. That will allow American Express to better evaluate your business’s financial health, including your revenue and expenses. After reviewing your business bank account, American Express could boost your credit line, although increases are never guaranteed. Alternatively, you could contact the customer service department at 888-986-8263 to request a credit line increase.
Is It Hard To Get an American Express Business Line of Credit?
The eligibility criteria to obtain an American Express business credit line are relatively easy to meet for most businesses. Unfortunately, new businesses may have a harder time qualifying as you must be in business for one year to qualify. You also must have monthly earnings of at least $3,000 and be able to prove it with your three most recent bank statements. Finally, you must have a minimum FICO Score of at least 660 to open an Amex business line of credit.
Is It Better To Get a Business Credit Card or Line of Credit?
You may be better off with a business credit card if you merely need to cover your everyday business expenses, like utility bills and office supplies. These are expenses you plan on repaying quickly to minimize or eliminate interest charges. Conversely, a business line of credit is a better option to cover payroll, purchase inventory or fund other necessary expenses when there are gaps in cash flow.
What Is the Fastest Way To Build Business Credit?
To quickly establish and build business credit, start by incorporating or forming an LLC to ensure your company is a separate business entity. Next, apply for a federal Employer Identification Number and open a business account in your legal business name. Once your business is established, you can apply for credit in your business name. Once approved, your creditors should report your payments to business credit bureaus, including Dun & Bradstreet, Equifax and Experian. Making consistent, on-time payments on your accounts will help build a strong payment history, which factors heavily in your credit score.
Does Applying for a Business Line of Credit Hurt Your Credit Score?
Applying for a business line of credit could temporarily harm your credit score if the lender relies on your personal credit for approval. Inhat case, the lender will perform a hard inquiry of your credit report, which stays on your credit report for two years. Consequently, your credit score could temporarily drop a few points. However, that slight decrease should only affect your credit score for a few months or up to a year before it returns to normal, so long as you continue to make timely debt payments.
What Is the Best Use of a Business Line of Credit?
The most common reason companies take out business lines of credit is to access short-term funding. Businesses can draw funds for various purposes, ranging from buying office supplies and covering payroll expenses to purchasing inventory and upgrading equipment.
