American Express Business Line of Credit Review
3.00% to 27.00%
3% to 9% for 6-month terms
6% to 18% for 12-month terms
9% to 27% for 18-month terms
12% to 18% for 24-month terms
$2,000 to $250,000
One year
$3,000
Pros and cons of American Express
| Pros | Cons |
|---|---|
No prepayment, application or origination fees Low minimum monthly income requirements Lower interest rates than many competitors | Must be in business for at least one year High late payment and insufficient fund fees Every loan requires a personal guarantee |
American Express small business financing review
American Express is best known for its suite of personal and business credit cards, but it also offers business lines of credit with low starting rates and no prepayment penalties. While you don’t have to be an existing American Express Business Card customer to qualify, if you do have an Amex account, you may be pre-approved for a line of credit.
With this flexible form of financing, you can borrow up to $250,000 for your business. Your funds will be available in as little as one business day, and, unlike with other short-term financing options, you won’t have to make daily or weekly payments. However, it’s important to note that a personal guarantee will be required, and borrowers without a pre-existing relationship with American Express may only qualify for lines of credit up to $150,000.
- Established businesses. Must be in business for at least one year.
- Business owners with good credit. American Express stands out for its impressively low starting rates, but you’ll need a strong credit score to take advantage of them.
- Those who want a loan without a lot of fees. No origination fees, application fees or prepayment penalties. You only pay a fee if your payment is late or you have insufficient funds in your connected account.
How does the American Express Business Line of Credit work?
American Express Business Lines of Credit are alternatives to short-term business loans that can provide working capital for your small business. Each time you withdraw funds from an Amex line of credit, you’re making a separate loan agreement. There are two types of loan agreements: installment loans and single repayment loans.
With both loan agreements, your available funds will typically replenish once your outstanding balance has been paid.
American Express small business financing at a glance
American Express line of credit amounts range from $2,000 to $250,000, although only select customers qualify for amounts over $150,000. Amex doesn’t charge application fees, origination fees or prepayment penalties. But if you pay late or don’t have sufficient funds in your account, you’ll be hit with a late payment penalty ranging from $10 to $100, depending on your outstanding loan balance.
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Business line of credit (installment loan) | $2,000 to $250,000 | 6 to 24 months | 3% to 9% for 6-month terms 6% to 18% for 12-month terms 9% to 27% for 18-month terms 12% to 18% for 24-month terms | Late fees up to $100 |
| Business line of credit (single repayment loan) | $2,000 to $250,000 | 1 to 3 months | 0.95% to 1.80% for 1-month terms 1.90% to 3.75% for 2-month terms 9% to 27% for 18-month terms 2.85% to 6.05% for 3-month terms | Late fees up to $100 |
Installment loans
Installment loan agreements have terms ranging from 6 to 24 months. With this option, you’ll make fixed monthly payments on your borrowed funds, incurring a fee for each month you have an outstanding balance. The exact fee you’ll be charged will depend on the loan term. For example, total fees for six-month installment loans range from 3.00% to 9.00%, while fees for 18-month installment loans range from 9.00% to 27.00%.
An installment loan might be a good option if you’re borrowing more than you can realistically repay as a lump sum. If you end up with more excess cash than you predicted, you can always repay your loan early to avoid hefty fees.
Single repayment loans
You can save on fees by choosing a single repayment loan agreement. With this option, both the principal balance and the loan fee are repaid in full at the end of the loan term, which can last 1, 2 or 3 months. Once again, the total amount you’ll pay in fees will depend on your term, though fees for single repayment loans are significantly lower. For instance, a one-month term will incur fees between 0.95% and 1.80%.
If you require funds to cover a short-term need, a single repayment loan may be your best option. For example, if you need inventory for an upcoming order but you expect to receive payment by the end of the month, a two-month term should give you enough time to collect the payment from your client and repay your loan with a little wiggle room to spare.
It’s important to note that the single repayment loan option may not be available for all borrowers, as you must have an existing relationship with American Express to qualify.
American Express borrower requirements
| Minimum annual revenue | $36,000 |
| Minimum time in business | One year |
| Minimum credit score | 660 |
Like most lenders, American Express will look at your company’s income, revenue and credit when you apply for a business loan.
When applying for an American Express Business Line of Credit, you’ll need to provide a valid email address, your desired loan amount and repayment term and the financial reason your small business needs the funds. Once you’re approved, Amex will determine if you can borrow the amount requested and what your interest rate will be.
Required documents
American Express doesn’t provide a list of required documents on its website. It does require some basic information, including:
- Business EIN
- Business owner’s Social Security number
- The industry the business is in
- Estimated annual gross revenue
You’ll also need to link a business bank account to your application, but it doesn’t have to be an Amex account. Keep in mind that many lenders require documents such as personal and business tax returns, bank statements, financial statements and a business plan.
Alternatives to American Express
| American Express | Bluevine | OnDeck | |
|---|---|---|---|
| Minimum credit score | 660 | 625 | 625 |
| Loan products offered | Line of credit | Line of credit | Term loans and lines of credit |
| Time to funding | Instant or 1 to 3 business days | Instant or up to 3 business days | Same business day to 3 business days |
| Starting rate | 3.00%
3.00% to 27.00% 3% to 9% for 6-month terms 6% to 18% for 12-month terms 9% to 27% for 18-month terms 12% to 18% for 24-month terms | 7.80% (simple interest) | 31.30% Minimum APR offered to at least 5% of customers (not the lowest rate offered) |
| Maximum loan size | $250,000 | $250,000 |
|
| Minimum annual revenue | $36,000 | $120,000 | $100,000 |
American Express vs. Bluevine
With a lower minimum credit score, a Bluevine line of credit may be somewhat easier to qualify for than an American Express Business Line of Credit. The starting interest rate with Bluevine is also more straightforward: Rates start at 7.80% simple interest.
However, one factor that sets the American Express Business Line of Credit apart is the option for an 18- or 24-month term. Bluevine’s lines of credit are limited to 3, 6 or 12 months. The maximum loan size and time to funding are about the same for both American Express Business Line of Credit and Bluevine.
American Express vs. OnDeck
OnDeck offers both term loans and lines of credit but at a much higher APR than American Express. Though both lenders have a similar time to funding, instant deposits are only available with American Express if you also have an Amex checking account. If you don’t, OnDeck’s time to funding may be quicker, making this a viable option for small business owners looking for fast cash. Just keep in mind that OnDeck’s same-day funding may be limited to $100,000 or less.
Also, OnDeck is open to borrowers with credit scores of 625 and higher, which is less strict than American Express’s 660 minimum.