Business Line of Credit vs Business Credit Card

A business credit card is a popular and flexible tool for those times when business owners need quick access to cash. There are few restrictions on what you can purchase with a credit card and many small business owners use credit cards for purposes that include purchasing inventory, paying bills, or to cover travel expenses. In fact, according to the Small Business Administration (SBA), roughly 65 percent of small business owners use credit cards on a regular basis. A business line of credit could also be a good option for your business.

There Are Benefits to Using a Business Credit Card

In addition to being a flexible financing and purchasing tool, there are other benefits associated with business credit cards, which include more sophisticated reporting and expense tracking, the ability to issue multiple cards to employees on the same account, more flexible payment options, and often larger credit limits compared to personal credit cards.

Many business credit cards report your transaction history to the business credit bureaus instead of the personal credit bureaus, which is important for business owners interested in building their business credit and protecting their personal credit. Maxing out your personal credit cards on business expenses (even if you pay the entire balance at the end of every payment cycle) may still negatively impact your personal credit score.

Does OnDeck offer a business credit card? No, but we do offer a line of credit, which is a very valuable financial tool on its own or used along with a business credit card.

Why a Business Line of Credit Could Make Sense in Addition to a Business Credit Card

Although business credit cards are convenient and flexible there are some things you just can’t do with a credit card. For example, you may not be able to make certain payments, including your property lease, payroll, and invoices from particular vendors; but you can use a business line of credit. Additionally, while some business credit cards come with lower credit limits, an OnDeck line of credit is between $5,000 and $100,000.

Applying for a business line of credit with OnDeck is a simple application that only takes a few minutes. You can also apply by phone at (888) 269-4246. If you’ve been in business for at least a year, and have $100,000 or more in annual revenue, you could be approved and have access to your credit line in as little as 24 hours.

Frequently Asked Questions

What is the difference between a line of credit and a business credit card?
A line of credit is a revolving loan that provides a fixed amount of capital that can be accessed as needed. All or part of the credit line can be accessed at any given time up to the fixed limit, repaid, and used again. Interest is only paid on the amount of credit used. While a business credit card is similar to a line of credit, there are some purchases or payments that can’t be made with a business credit card.

How quickly will I receive my funds from OnDeck?
Once you close all the paperwork with OnDeck, you have the choice of instant funding or ACH. With instant funding your funds will land in your account within seconds and with an ACH transfer funds land in your account in as fast as 24 hours.

How is an OnDeck business line of credit repaid?
Once you draw from your line of credit, a weekly payment is debited from your checking account via an ACH withdrawal. Your principle balance is credited as soon as the payment clears (usually within 24 hours). If you were to pay back your entire balance, the full amount of your credit line would be available for withdrawal again.

What is the Term of an OnDeck Line of Credit?
An OnDeck line of credit has a required 12-month repayment period.

Does OnDeck report my payment history to a business credit bureau?
Yes, we report your payments on a regular basis, which can help build your business credit profile.