American Express® Business Line of Credit vs. Fundible

Small business loans are one of the best ways for companies to get the funds to start operating or expand. With so many different lenders, how can you choose the best business loan lender?

American Express and Fundible are two lenders that work with small businesses, though they serve different markets. American Express is better suited to borrowers with fair credit who want a business line of credit. Fundible has more flexible loan offerings and can approve even companies with poor credit scores.

American Express® Business Line of Credit vs. Fundible at a glance

American Express® Business Line of Credit has a lower revenue requirement, but Fundible’s overall eligibility requirements are more relaxed. This table breaks down the key differences and can help you choose the right lender.

American Express® Business Line of Credit

American Express® Business Line of Credit is a line of credit with amounts ranging from $2,000 to $250,000 for short-term purposes such as buying inventory, covering unexpected expenses, or financing other purchases. But unlike many lines of credit that use interest rates to calculate your borrowing costs, these loans use a unique system for determining the cost of borrowing.

Instead of charging interest, the American Express® business line of credit charges a monthly fee based on the origination amount of each loan. The longer the term of the line of credit and the worse your credit, the higher the borrowing cost will be. Here’s a look at the monthly fee structure, which are the total monthly fees incurred over the loan term:

• For six-month loans: 3.00% to 9.00%
• For 12-month loans: 6.00% to 18.00%
• For 18-month loans: 9.00% to 27.00%
• For 24-month loans: 12.00% to 18.00%

The upside for borrowers is that these business lines of credit only need a minimum credit score of 660* and at least an average monthly revenue of $3,000 to potentially qualify. Just keep in mind that all businesses are unique and are subject to approval and review.

Pros

• Low revenue requirements
• Open to business owners with fair credit
• Loan amounts from $2,000 to $250,000

Cons

• Borrowing costs can be high
• Unusual pricing makes it hard to compare alternatives
• Personal guarantee and business assets required

Note: American Express® Business Line of Credit offers two loan types, installment loans and single repayment loans for eligible borrowers. All loan term types, loan term lengths, and pricing are subject to eligibility requirements, application, and final approval. This article contains general information about the American Express® Business Line of Credit installment loan type only.

Fundible business loans

Fundible small business loans include business lines of credit and term loans. The lender works with borrowers that have fair or even poor credit, sometimes approving businesses whose owners have credit scores as low as 450.

Fundible also offers equipment loans and SBA loans. But since the lender is open to working with companies with bad credit, interest rates could be much higher than the Amex business line of credit. Some of its loans charge rates as high as 3.5 percent monthly, which can make borrowing money quite expensive.

Pros

• You can qualify with fair or bad credit
• Several types of loans
• High loan amounts

Cons

• Requires $100,000 in annual revenue
• Loans can be very expensive
• Some come from lending partners

How to choose between Amex and Fundible

American Express and Fundible are both good for borrowers whose credit scores fall outside the good-to-excellent range. While Fundible is more accessible and offers more types of loans open to business owners with bad credit, American Express’s business lines of credit and business credit cards could prove more useful to borrowers who can qualify.

Choose American Express® Business Line of Credit for fair-to-excellent credit

American Express has a minimum credit score requirement of 660*, which targets borrowers with at least fair credit. If you have a strong credit score, its lines of credit may be a reasonable choice. If your score is under 660*, Fundible is a better option.

Choose Fundible for bad credit

With a minimum credit score requirement of 450, Fundible offers loans to borrowers that American Express would deny. If you can’t meet American Express’ 660* credit score minimum, look to Fundible.

Choose American Express for business credit cards

American Express business credit cards can cover a variety of business needs, from working capital to luxury travel.

For example, the American Express Blue Business Cash™ Card doesn’t charge an annual fee and offers two percent cash back on up to $50,000 worth of purchases annually, then one percent. Fundible, by contrast, offers no business credit cards.

Choose Fundible for large loan amounts

Fundible offers SBA and other loans with borrowing limits as high as $10 million. That easily exceeds American Express’ loan amount range of $2,000 to $250,000, making Fundible business loans the choice if you need to borrow large sums.

Choose Fundible for variety of business loans

American Express offers just one type of business loan — a line of credit. Fundible has lines of credit, term loans, SBA loans and specialized equipment loans. Borrowers looking for variety should look to Fundible small business loans.

Alternatives

If you’re considering a business loan, you might want to think about other lenders as well.

For example, Bank of America is a traditional business lender that offers various loans. It doesn’t have the easy approvals of Fundible but generally keeps its costs lower. It offers SBA loans for up to $5 million and lines of credit over $250,000, making it a strong option if you want to borrow large amounts.

If you have less-than-perfect credit, SMB Compass may be a reasonable alternative. It offers nine types of loans, including lines of credit, SBA loans, and equipment financing. Some of its loans have a minimum credit score of 600 but high limits of up to $5 million.

SBA loans

Small business owners should also consider SBA loans, thanks to their high loan amounts and capped interest rates. SBA 7(a) loans and 504 loans are a good fit for borrowers with good-to-excellent credit, but the SBA also has other types of loans to help a broad range of small business owners.

Depending on where you’re running your company, you may be eligible for an SBA Community Advantage loan. These loans are specifically aimed at helping underserved communities. You can use this program to get an SBA 7(a) loan for as much as $350,000. This is a popular choice for companies in need of working capital. They can also be used for equipment or land purchases, as well as other needs.

If you want a line of credit, CAPLines come in multiple forms and let you get a working capital line of credit for as much as $5 million.

The SBA also offers microloans of up to $50,000. These loans often target minority-owned businesses and are used as working capital loans.

Bottom line

If you have fair-to-excellent credit and need a line of credit, look to American Express. But if you struggle to find accessible loan options, Fundible business loans are worth a look. Make sure you take the time to compare the costs of loans from other lenders, too. Shopping around and finding the most affordable business loan for your needs is always worthwhile.

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

Frequently asked questions

• What’s the difference between a business credit card and line of credit?

  Both business credit cards and business lines of credit offer revolving credit that can be reused as you repay your balance. Business lines of credit are typically designed for larger expenses and long-term borrowing compared to business credit cards. But business credit cards come with grace periods, which means you won’t get charged interest if you pay your balance in full each month. Credit cards may also offer rewards and be easier to qualify for.

• Why do businesses use lines of credit?

  Businesses use lines of credit because they offer flexibility. The company can draw from the line of credit as needed and not pay interest when there is no outstanding balance. Access to a line of credit means having the option to borrow money quickly.

• Can I get a business loan with bad credit?

  Yes, you can get a business loan, even with poor credit. Some lenders, like Fundible, have minimum credit score requirements as low as 450.