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OnDeck
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$5,000 to $250,000
APR range
Not disclosed
Minimum Credit Score
625
Via Ondeck’s Website
$5,000 to $250,000
Not disclosed
625
Why We Picked It
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. To date, the company has extended $14 billion in funding to small businesses.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Note: OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Pros & Cons
- Term loans from $5,000 to $250,000; lines of credit from $6,000 to $100,000
- Same-day funding
- Low minimum credit score requirement
- $100,000 minimum annual revenue requirement
- Must have been operating for at least one year
- Does not lend to businesses in Nevada, North Dakota or South Dakota.
Details
Overview
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. To date, the company has extended $14 billion in funding to small businesses.
OnDeck doesn’t lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Eligibility
- Minimum Credit Score: 625
- Time in Business: One Year
- Minimum Annual Revenue: $100,000
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
Best LLC Loans Of March 2024
BEST FOR SHORT-TERM LOANS
OnDeck
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$5,000 to $250,000
APR range
Not disclosed
Minimum Credit Score
625
Via Ondeck’s Website
$5,000 to $250,000
Not disclosed
625
Why We Picked It
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. To date, the company has extended $14 billion in funding to small businesses.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Note: OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Pros & Cons
- Term loans from $5,000 to $250,000; lines of credit from $6,000 to $100,000
- Same-day funding
- Low minimum credit score requirement
- $100,000 minimum annual revenue requirement
- Must have been operating for at least one year
- Does not lend to businesses in Nevada, North Dakota or South Dakota.
Details
Overview
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. To date, the company has extended $14 billion in funding to small businesses.
OnDeck doesn’t lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Eligibility
- Minimum Credit Score: 625
- Time in Business: One Year
- Minimum Annual Revenue: $100,000
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
BEST FOR A LENDER COMPARISON SITE
Lendio
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$500 to $5 million
APR range
As low as 3%
Minimum Credit Score
560
On Lendio’s Website
$500 to $5 million
As low as 3%
560
Why We Picked It
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. By filling out one application, business owners are able to connect to over 75 lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners, and it will help you find the best offer for your specific needs.
Pros & Cons
- One application connects you to more than 75 lenders
- Wide variety of loan products, including term loans, lines of credit and SBA loans
- Some lenders charge prepayment penalties
- Terms and funding times vary depending on specific lender
Details
Overview
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners while helping you find the best offer for your needs.
Eligibility
- Minimum Credit Score: 560
- Time in Business: Six Months
- Minimum Annual Revenue: $50,000
Funding time
Applying through Lendio takes 15 minutes. After you review your offers and are approved by your lender, you can receive your funds in as little as 24 hours.
BEST FOR FLEXIBLE LINES OF CREDIT
BlueVine
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$6,000 to $250,000
APR range
Not disclosed
Minimum Credit Score
625
On BlueVine’s Website
$6,000 to $250,000
Not disclosed
625
Why We Picked It
BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.
Small business owners looking to access a line of credit on an as-needed basis can receive funds from $6,000 to $250,000. BlueVine offers two payment structures: Flex 6 or Flex 12. Customers who choose Flex 6 make weekly payments over 26 weeks while Flex 12 customers make monthly payments over 12 months. What’s more, after 45 days of payment on Flex 6, or 90 days of payment on Flex 12, you may be eligible for a credit line increase.
BlueVine also charges weekly or monthly fees for its line of credit. Standard pricing is 1.7% per week or 7% per month for line of credit draws.
Note: BlueVine’s line of credit is available in most U.S. states except North and South Dakota, Puerto Rico and U.S. territories.
Pros & Cons
- Can get a decision within five minutes and funding within hours
- Lines of credit up to $250,000
- Low credit score requirement
- No mobile app for its line of credit
- Monthly revenue requirement
- Not available to businesses in North and South Dakota, Puerto Rico and U.S. territories
Details
Overview
BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.
BlueVine’s line of credit is available in most U.S. states except North and South Dakota, Puerto Rico and U.S. territories.
Eligibility
Eligibility varies on the specific program a business owner chooses.
Flex 6
- Minimum Personal Credit Score: 625
- Must Have Been in Business for: At Least 24 Months
- Revenue: $40,000 per Month or $480,000 Annually
- Business Type: Corporation or LLC
- Bankruptcies: No Bankruptcies Within the Last Three Years
Flex 12
- Minimum Personal Credit Score: 650
- Must Have Been in Business For: At Least Three Years
- Revenue: $80,000 per Month or $960,000 Annually
- Business Type: Corporation or LLC
Turnaround time
After you submit your application, you can receive a decision in as quickly as five minutes.
BEST FOR SMALL- TO MID-SIZED LLCS
National Funding
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$10,000 to $500,000
APR range
Buy rates start at 1.11%
Minimum Credit Score
600
On National Funding’s Website
$10,000 to $500,000
Buy rates start at 1.11%
600
Why We Picked It
National Funding offers working capital small business loans from $10,000 to $500,000 with terms of four months to two years, paid daily or weekly. Borrowers can use their funds for all working capital needs, including inventory, payroll, marketing, taxes and more. National Funding also offers equipment financing Up to $150,000 but applicants must have a minimum personal credit score of 575 to qualify for that financing method.
Unlike most business lenders, National Funding offers early payoff discounts. Small business loan customers who repay their total remaining balance in full within the first 100 days of the contract will automatically receive a 7% discount off the total remaining balance. Equipment financing customers who repay the total remaining balance early, at any point during the term, will automatically receive a 6% discount off the total remaining balance.
Pros & Cons
- Financing up to $500,000
- Early payoff discounts
- Requires daily or weekly payments
- Potentially high borrowing costs
- Requires minimum gross annual sales of $250,000
Details
Overview
National Funding offers small business loans in all 50 states and allows borrowers to use their funds for all working capital needs, including inventory, payroll, marketing, taxes and more.
Unlike most business lenders, National Funding offers early payoff discounts. Small business loan customers can get a 7% discount off their total remaining balance when repaying the total remaining balance in full within the first 100 days of the contract. Equipment financing customers can receive a 6% discount off their total remaining balance when repaying the total remaining balance early.
Eligibility
- Minimum Credit Score: 600 (575 for Equipment Financing)
- Time in Business: Six Months
- Monthly Revenue: $250,000 Annually
Turnaround Time
Most loans are funded within 24 hours of approval, subject to receipt of required documentation, underwriting guidelines and processing time by your bank.
BEST FOR SMALL AND LARGE LINES OF CREDIT
American Express® Business Line of Credit
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$2,000 to $250,000
Minimum Credit Score
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.
660 FICO at the time of application
Monthly fee
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.
Varies by loan term
see below for details
Via American Express’s Website
$2,000 to $250,000
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.
660 FICO at the time of application
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.
Varies by loan term
see below for details
Why We Picked It
American Express Business Blueprint™ is best for its American Express® Business Line of Credit (formerly Kabbage from American Express and Kabbage Funding™), which gives business owners the chance to secure funding between $2,000 to $250,000. Repayment terms include six, 12, 18 and 24 months.
Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.
In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights. All businesses are unique and are subject to approval and review.
Pros & Cons
- Backed by American Express
- No prepayment penalty
- Monthly fees on unpaid balances
- Requires personal guarantee
Details
Overview
American Express Business Blueprint™ is formerly Kabbage from American Express and Kabbage Funding™. In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights.
Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.
Eligibility
- Minimum Credit Score: 660 FICO at the time of application
- Time in Business: One Year
- Monthly Revenue: monthly revenue of at least $3,000
All businesses are unique and are subject to approval and review.
Turnaround Time
Funds can take up to three business days to appear in your account, depending on your bank.
BEST FOR QUICK APPROVALS
Fundbox
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$1,000 to $150,000
APR range
Start at 4.66%
Minimum Credit Score
600
On Fundbox’s Website
$1,000 to $150,000
Start at 4.66%
600
Why We Picked It
Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.
Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.
Pros & Cons
- Receive a decision within three minutes
- Low minimum credit score requirement
- Next-day funding
- Only short-term repayment terms are available
- Relatively low lines up credit of up to $150,000
Details
Overview
Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.
Eligibility
- Minimum Personal Credit Score: 600
- Minimum Time in Business: Three Months
- Minimum Annual Revenue: $30,000
Funding time
If you’re getting a line of credit, your funds transfer to your bank account as soon as the next business day.
BEST FOR HEALTHCARE PROFESSIONALS
TD Bank
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$10,000 to $1 million
up to $5 million for small business loans
APR range
Not disclosed
Minimum Credit Score
660
From participating partners via businessloans.com’s website.
$10,000 to $1 million
up to $5 million for small business loans
Not disclosed
660
Why We Picked It
Business owners can apply for traditional term loans and lines of credit, U.S. Small Business Administration (SBA) loans and even other products like credit cards and checking accounts through TD Bank.
TD Bank offers business loans from $10,000 to $1 million with terms ranging from one to five years. If you’d rather have access to a line of credit, it offers credit lines between $25,000 and $500,000. What’s more, TD Bank is an SBA-approved lender, meaning you can apply for an SBA through the bank. SBA loans typically have loan amounts of up to $5 million and terms up to 25 years.
The company also stands out for healthcare professionals and offers unique financing options for dentists, veterinarians, physicians and eye care professionals. For instance, it offers lending solutions up to $12 million with 100% practice financing plus working capital, in addition to partnership buy-ins and buy-outs, equipment purchase, and practice mergers and acquisitions.
Note: While online applications are available for loans up to $100,000, you must apply in person for loans over $100,000. TD Bank has branches in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington D.C.
Pros & Cons
- Offers term loans, lines of credit and SBA loans
- Online application and mobile banking
- Customized financing options for healthcare professionals
- Must apply in person for loans over $100,000
- Branches located in only 16 states
Details
Overview
TD Bank offers traditional term loans and lines of credit, U.S. Small Business Administration (SBA) loans and other products like credit cards and checking accounts. TD Bank’s business loans range from$10,000 to $1 million with terms of one to five years. Credit lines range from $25,000 to $500,000.
Although online applications are available for business loans up to $100,000, you must apply in person for loans over that amount. TD Bank has branches in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington, D.C.
Eligibility
- Minimum Credit Score: 660
- Time in Business: One Year
- Monthly Revenue: Does not disclose
Turnaround Time
Although TD Bank offers same-day approval for its business loans and lines of credit, it may take up to two business days to receive your funds. SBA loans, on the other hand, may take several weeks to fund.
BEST FOR ESTABLISHED LLCS
Funding Circle
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$25,000 to $500,000
APR range
As low as 7.49%
Minimum Credit Score
660
From participating partners via businessloans.com’s website.
$25,000 to $500,000
As low as 7.49%
660
Why We Picked It
Funding Circle has been a direct lender specializing in small business loans since 2010. It has helped 135,000 businesses in 700 industries and lent $20.2 billion globally. We chose Funding Circle because it provides fast, affordable loans with a simple application process and funding in as little as 48 hours. Prospective borrowers have three options: business term loan, line of credit or SBA loan.
Funding Circle term loans range from $25,000 to $500,000 with repayment terms from six months to five years. If you choose to apply for a business line of credit, you can access credit lines between $6,000 and $100,000. However, Funding Circle doesn’t specify its line of credit repayment terms. You can also apply for Funding Circle SBA loans, which range from $25,000 to $500,000 with terms up to 10 years.
There is one main drawback of Funding Circle: There’s a one-time origination fee on each loan ranging from 3.49% to 6.99% of the approved loan amount.
Pros & Cons
- Loans from $25,000 to $500,000
- Funding in as little as 48 hours
- No minimum annual revenue requirement for most loans
- One-time origination fee between 3.49% to 6.99% of the approved loan amount
- Requires two years in business, so it’s not ideal for startups
- Not available to Nevada businesses
Details
Overview
Funding Circle has been a direct lender specializing in small business loans since 2010. It has helped 135,000 businesses in 700 industries and lent $20.2 billion globally.
Eligibility
- Minimum Credit Score: 660 (650 for SBA loans)
- Time in Business: Two Years
- Monthly Revenue: $400,000 (for SBA loans only)
Turnaround Time
Depending on the loan type, you can receive your funds within two days. However, SBA loan funding may take up to two weeks.
BEST FOR FUNDING OPTIONS
Biz2Credit
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
Up to $1M+
Varies depending on product and qualifications
APR range
Does not disclose
Minimum Credit Score
650*
*See Website For Details
On Biz2credit’s Website
Up to $1M+
Varies depending on product and qualifications
Does not disclose
650*
*See Website For Details
Why We Picked It
Biz2Credit is a digital funding platform that provides three funding options—term, revenue-based financing and commercial real estate (CRE) loans—ranging from Up to $1M+. It only takes a few minutes to apply.
Biz2Credit can connect business owners with revenue-based financing Up to $2M+ and term loans Up to $1M+. Revenue-based financing payments are flexible based on business performance, with a right to reconcile against actual business receipts while term loans are repaid through weekly, bimonthly or monthly payments over the course of 12 to 36 months. Biz2Credit also offers interest-only CRE loans from Up to $2M+ with terms between 12 and 36 months; payments are due monthly.
In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “inthe vast majority of cases, [it] will make a financing decision without referral to any external party.”
Pros & Cons
- Less stringent qualification requirements for revenue-based financing
- Minimum annual revenue requirement of $250,000 per year
- Quick online application, approval and funding process*
- Stricter qualification requirements for term and CRE loans
- Revenue-based financing require daily, weekly or bimonthly payments
- Some products not available in all states
Details
Overview
Biz2Credit operates in all 50 states. They have a streamlined online application and in the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “in the vast majority of cases, [it] will make a financing decision without referral to any external party.”
Eligibility
- Minimum Credit Score: 650** for Revenue-based financing, 650** for Term and CRE Loans
- Time in Business: Six Months* for Revenue-based financing, 18 Months* for Term and CRE Loans
- Monthly Revenue: $10,000+
Turnaround Time
Approval and processing times for Biz2Credit funding vary by product type.
Summary: Best LLC Business Loans Of 2024
| Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | Loan amounts | APR | Time in business | Minimum credit score | Learn More CTA text | Learn more CTA below text | Learn More |
|---|---|---|---|---|---|---|---|---|---|---|
| OnDeck |  | 5.0 |  | $5,000 to $250,000 | Not disclosed | 1 year | 625 | Learn More | Via Ondeck's Website | |
| Lendio |  | 4.5 |  | $500 to $5 million | As low as 3% | 6 months | 560 | Learn More | On Lendio's Website | |
| BlueVine |  | 4.5 |  | $6,000 to $250,000 | Not disclosed | 24 months (Flex 6 plan) | 625 | Learn More | On BlueVine's Website | |
| National Funding |  | 4.5 | | $10,000 to $500,000 | Buy rates start at 1.11% | 6 months | 600 | Learn More | On National Funding's Website | |
| American Express® Business Line of Credit |  | 4.0 |  | $2,000 to $250,000 | N/A | 1 year | 660 FICO at the time of application | Learn More | Via American Express's Website | |
| Fundbox |  | 4.0 | | $1,000 to $150,000 | Start at 4.66% | 3 months | 600 | Learn More | On Fundbox's Website | |
| TD Bank |  | 4.0 | | $10,000 to $1 million | Not disclosed | 1 Year | 660 | Learn More | From participating partners via businessloans.com's website. | |
| Funding Circle |  | 4.0 | | $25,000 to $500,000 | As low as 7.49% | 2 years | 660 | Learn More | From participating partners via businessloans.com's website. | |
| Biz2Credit |  | 4.0 | | Up to $1M+ | Does not disclose | 12 months+* | 650* | Learn More | On Biz2credit's Website *See Website For Details |
Methodology
We reviewed 21 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan cost.35%
- Loan details.25%
- Customer experience.20%
- Eligibility and accessibility.10%
- Application process.10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our .
Tips for Comparing LLC Loans
The best small business loans depend on a prospective borrower’s unique needs. For example, some lenders impose time in business and annual revenue requirements that may be difficult for newer LLCs to meet. Other lenders may specialize in a type of financing that’s not relevant to all LLCs. Here’s what to consider when comparing loans for an LLC:
- Minimum qualification requirements. Business lenders generally impose minimum time in business requirements that can make it difficult for startups to qualify. Minimum annual revenue requirements are also used to ensure borrowers are established and successful enough to cover monthly debt payments. Make sure your LLC is likely to qualify with a lender before submitting an application.
- Available loan amounts and terms. If you need to borrow a large sum of money—or prefer to keep your liabilities low—find a lender that offers adequate loan amounts. Also compare providers based on whether they offer flexible repayment terms, and remember that longer terms mean lower monthly payments but more interest over time.
- Interest rates and fees. Business loan interest rates can range anywhere from 5% to 99%. Reduce the overall cost of borrowing by shopping for a lender that offers the most competitive rates available based on your qualifications. Likewise, compare lenders to identify which options charge the least amount of fees, including origination fees and prepayment penalties.
- Collateral requirements. Not all business loans are secured, but some lenders may require collateral. This is especially common for equipment financing, where the item being purchased serves as collateral for the loan. Secured loans also may be easier to obtain or come with lower interest rates, making them a good option for less qualified borrowers.
- Application process and requirements. The complexity of loan applications also varies by lender, though online lenders tend to have the most streamlined procedures. That said, some borrowers prefer the experience of applying for a loan in person. Review each lender’s application process and documentation requirements to find a provider that aligns with your preferences.
- Funding speed. If you need cash quickly, make sure potential lenders offer funding speeds that align with your timeline. While some lenders advertise same- or next-day funding, most disburse loan proceeds within a few business days.
- Customer reviews. Read online reviews from current and former borrowers to evaluate each lender’s reputation with customers. These reviews can also provide insight into how likely borrowers are to qualify for competitive rates and may reveal red flags. This is especially important if a lender offers rates or other terms that seem too good to be true.
What Is an LLC Loan?
An LLC loan is a business loan that helps LLCs finance everything from startup costs to the purchase of equipment and other expenditures necessary for operation and growth. LLC loans are no different from small business loans in general, though some types of funding may be better suited to one business than another.
How Does an LLC Loan Work?
An LLC loan is a commercial loan provided to an LLC for expenses such as working capital, asset acquisition or business expansion. This type of loan is typically secured under the name of the LLC, not the individual members, which means the liability is limited to the company itself.
To obtain an LLC loan, the company must provide the necessary documentation, including financial statements, business plans and credit reports during the application process. Lenders use this information to assess the financial health of the company and its ability to repay the loan.
The conditions of these loans, including interest rates, repayment plans and terms, often vary depending on the lender and the financial strength of the LLC. Approval for the loan also depends on the LLC’s creditworthiness and, sometimes, the personal credit history of the members—especially for newly established LLCs. Once approved, the LLC can use the funds based on the agreed-upon terms of the loan contract.
Types of LLC Loans
The borrowing needs of an LLC can depend on a number of factors, and some types of business loans meet these varied needs better than others. These are the most common types of LLC loans:
- Term loans. Term loans are what people typically think of when looking for business financing. The borrower receives a lump sum of cash, and the loan—plus interest—must be repaid on a monthly basis. Interest accrues on the entire loan sum, and funds cannot be accessed again once paid off.
- SBA Loans. SBA loans are a form of financing backed by the U.S. Small Business Administration (SBA). Loans are underwritten by individual banks but guaranteed by the SBA up to a certain percentage. Loan amounts range from $30,000 to $5 million, with terms extending up to 25 years. Interest rates are typically lower than traditional bank loans, but the programs are competitive and small business owners must meet rigorous eligibility and application requirements.
- Business lines of credit. A business line of credit is a type of financing that lets LLCs access funds on an as-needed basis, up to an approved borrowing limit. Interest only accrues on the outstanding balance from month to month—not the entire borrowing limit. Borrowers can also pay off a portion of the credit line and reuse it until the draw period ends. This makes lines of credit a good option for LLCs that need to cover ongoing expenses.
- Invoice factoring. Invoice factoring involves a company selling its outstanding invoices to a factoring company for a lump sum of cash—generally between 70% and 95% of the total invoice amounts. The factoring company then becomes responsible for collections. Once invoices are paid, the borrower receives the remaining balance, minus factoring fees of about 0.50% to 5% per month.
- Merchant cash advances. This option is best suited for companies that have significant credit card transactions. The cash advance company provides a lump sum up front, which is then repaid by a percentage of daily credit card sales. Merchant cash advances often come with high interest rates and hefty fees.
- Equipment financing. Equipment financing provides funding to an LLC if it needs cash for equipment. The equipment itself often serves as collateral, reducing the need for additional assets for security. However, failure to make payments can result in losing the equipment.
LLC Loan Requirements
The requirements for an LLC loan are used to determine the financial health, reliability and potential profitability of an LLC. Common LLC loan requirements include:
- Financial statements. Lenders require comprehensive financial statements from LLCs to evaluate their income, expenditure, profitability and overall financial stability. These statements typically include balance sheets, income statements and cash flow statements.
- Business plan. A well-structured business plan outlines the LLC’s goals, strategies for achieving them, market research and financial projections. This document shows lenders how the loan will enhance the company’s growth and profitability.
- Credit reports. Credit reports demonstrate an LLC’s debt and repayment history. A good credit score indicates financial responsibility and increases the likelihood of loan approval. For a newly established LLC, lenders may also look at the personal credit reports of the members.
- Collateral. Depending on the type and size of the loan, lenders may require collateral, or assets that the lender can seize if the LLC defaults on loan payments. Collateral can include business or personal assets, including real estate, equipment or savings.
- Legal documents. These include the LLC’s articles of organization, operating agreement and licenses or permits related to the business. These documents demonstrate the LLC’s legal status and compliance with relevant regulations.
How To Get a Business Loan With an LLC
The process of getting a business loan varies by lender and depends on the type of financing. However, most lenders require borrowers to follow a similar application process. Follow these steps to get an LLC loan:
1. Review your credit. Before applying for an LLC loan, check your personal credit score. Lenders typically require a minimum FICO score of 680 to qualify for SBA loans or traditional bank loans, but this varies.
2. Identify your borrowing needs. Evaluate why your LLC needs to borrow money and calculate how much it needs to borrow. This can help you determine what kind of financing your business actually needs. For example, if you anticipate needing cash to cover ongoing operating costs, a business line of credit may make more sense than a term loan. Likewise, if your business needs to purchase a large piece of equipment, a secured loan may offer the most competitive interest rates.
3. Compare lenders. Identify lenders that offer the types of financing and qualification requirements consistent with your LLC’s borrowing needs. This should involve determining whether you are likely to qualify and whether each lender offers competitive loan amounts, repayment terms and interest rates. Also take time to read customer reviews and keep an eye out for red flags that may signal poor customer service or even predatory lending practices.
4. Organize financial documents. Lenders typically ask prospective borrowers to provide extensive financial documents during the application process, but requirements vary. In general, expect to provide at least 12 months of personal and business bank statements, two years of tax returns and details about other outstanding debts. It may also be necessary to provide copies of your business plan, business licenses and applicable legal documents.
5. Submit a formal application. Finally, submit an application online or by visiting a lender branch in person. Most lenders contact applicants via phone or email to collect any outstanding documentation or to gather additional information.
Lenders may fund business loans as soon as the day of loan approval. However, it generally takes a few days for borrowers to receive funds—and much longer for SBA loans. The time it takes to receive funds also varies based on the borrower’s bank.
¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
Alternatives to LLC Loans
LLC loans can provide the financial infrastructure necessary to expand and boost the operations of an LLC, but other funding options are available. Other options may be better suited to your specific needs, financial health and long-term goals of the LLC and can include:
- Business credit cards. Business credit cards offer easy access to funds, especially for ongoing needs or minor expenses. They can also include added benefits like cashback, travel rewards and other perks. However, they usually come with high interest rates and can be a costly financing option if you don’t repay balances each month.
- Personal loans for business. If the LLC is small and recently formed, a personal loan for your business might be a suitable option. These loans are usually based on the creditworthiness of the individual rather than the business. Keep in mind, they can expose the individual to personal liability if the business fails.
- Crowdfunding. Crowdfunding platforms enable businesses to raise capital from many people, usually in exchange for a product, service, equity or a combination. While it can be a great way to generate interest and funding for a product or service, it can require a significant investment in marketing and public relations.
- Angel investors or venture capital. These individuals or firms provide capital in exchange for equity in the company. While this strategy can provide substantial funding and potential business mentorship, it does require giving up a portion of ownership and control over the business.
- Grants. Grants are funds that do not require repayment. Government agencies, foundations and corporations often provide them to promote certain types of businesses or industries. However, grants can be highly competitive and require a thorough, polished business proposal to be successful.
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How does an LLC qualify for a loan?
To qualify for a loan, an LLC should meet the lender’s minimum time in business requirements—often between six months and two years. Similarly, the applicant must usually demonstrate that the business satisfies the lender’s quarterly or annual revenue requirements. The exact amount varies from lender to lender but must be sufficient to cover the borrower’s existing debt service as well as payments on the new loan.
Finally, LLC loan applicants must meet credit score requirements set forth by the lender. Depending on the age of the business, an LLC may qualify for a loan based on its business credit score or the applicant’s personal credit score. An applicant should have a personal score of at least 680 to qualify with most lenders, but this varies by bank, type of financing and other factors.
What can I use an LLC loan for?
You can use an LLC loan for a variety of business-related expenses. They can finance operational costs, equipment purchases, payroll and expansion efforts. These loans can also fund marketing strategies, manage cash flow during slow seasons, buy business real estate or cover unexpected expenses.
Can you get a business loan with an LLC?
You can get a business loan with an LLC, but the LLC must be created prior to submitting an application for financing. The process of applying for a loan as an LLC is the same as for other types of businesses. Instead of applying as an individual, provide the legal name of the LLC and the business banking information tied to that entity.
Generally, the LLC is responsible for repaying the loan—not the individual business owners. However, if the lender requires the business owner to sign a personal guarantee, they can be held personally liable for loan repayment if the LLC defaults.
Can LLCs use personal loans?
Business owners may be able to use personal loans to access funds for an LLC, depending on the lender. This type of loan can help cover LLC filing fees, startup costs and other realities of starting a business from the ground up. Personal loans may also be easier to qualify for than business loans—especially for LLCs without any demonstrable revenue.
That said, taking out a personal loan to finance LLC expenses means the business owner is personally liable for repaying the loan. If the borrower misses payments or defaults, it will impact their personal credit score—not that of the LLC. What’s more, personal loan interest rates may be higher than for business loans, and personal loan interest isn’t tax-deductible like business loan interest.
Can an LLC get an SBA loan?
An LLC can get an SBA loan as long as it meets all of the SBA’s eligibility requirements and complies with the lender’s qualification and application requirements. As with private loans, SBA-backed lenders impose credit score requirements and other qualification standards when evaluating applicants.
SBA eligibility requirements vary by the loan program, but applicant LLCs must operate for profit, and be engaged in—or have proposed to do business in—the U.S. or its territories. The applicant also must demonstrate that the LLC has reasonable owner equity to invest in the business and that the LLC has used other sources of funds—like personal assets—prior to applying for financial assistance from the SBA.
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