LOC vs MCA vs Term Loan — Honest Comparison
Each product has a different cost, speed, and qualification bar. Use this to find what actually fits your situation:
| Product | Min FICO | Funding Speed | Repayment | Collateral | Best For |
|---|---|---|---|---|---|
| MCA (T.A.G.) | 500 | 1–3 days | Daily % of deposits | None | Bad credit, fast need, no collateral |
| Online LOC (Bluevine, Fundbox) | 600–625 | 1–7 days | Weekly/monthly draws | Usually none | Revolving need, moderate credit |
| Bank LOC (secured) | 640–680 | 2–4 weeks | Monthly interest on drawn | Often required | Ongoing revolving capital, good credit |
| SBA CAPLine (LOC) | 640+ | 4–8 weeks | Monthly | Usually required | Low-cost revolving, 640+ FICO |
| Term Loan (bank) | 680+ | 30–60 days | Fixed monthly | Usually required | Lowest cost, strongest credit, most time |
Why Businesses Get Denied for a LOC
- Credit score below 640 (or 680 for banks)
- Less than 1–2 years in business
- Revenue below bank minimums ($100K–$250K/yr)
- Insufficient or no collateral
- High existing debt load
- No established relationship with the bank
- 500+ FICO (soft pull, no score impact)
- 6+ months in business
- $4,000+/month in business bank deposits
- Active US business checking account
- No active (un-discharged) bankruptcy
Didn't Qualify for a LOC? Check Your MCA Options.
5-minute application. 500 FICO minimum. Funded in 1–3 days.
$10,000 – $1,000,000. All 50 states. No collateral required.
Frequently Asked Questions
What is a good alternative to a business line of credit?
A merchant cash advance (MCA) is the most accessible alternative. Approves at 500 FICO (vs 640–680 for LOCs), funds in 1–3 days (vs 1–4 weeks), no collateral. Higher cost than a LOC — but available when a LOC isn't.
Why was I denied a business line of credit?
Most common reasons: credit score below 640–680, less than 1–2 years in business, insufficient revenue, no collateral, or no bank relationship. An MCA bypasses most of these: 500 FICO, 6+ months, $4,000+/month deposits, no collateral required.
Is a merchant cash advance better than a line of credit?
Not better — different. LOCs offer revolving access at lower cost. MCAs provide a lump sum at higher cost with daily repayment. If you qualify for a LOC and can wait, get the LOC. If you can't qualify or need capital now, an MCA is the practical path.
What credit score do I need for a business line of credit?
Bank LOCs: 640–700+ FICO. Online LOC lenders (Bluevine, Fundbox): 600+ FICO. MCAs: 500 FICO minimum.
How long does it take to get a business line of credit?
Bank LOCs: 1–4 weeks. Online LOC providers: 1–7 days. SBA LOCs: 3–8 weeks. MCAs: 1–3 days, same-day available. If you need capital before a LOC would fund, an MCA can bridge the gap.