4 Best LLC Business Loans of September 2021

Can you get a business loan with an LLC?

With small-business loans, lenders tend to care more about your business’s performance than its structure. That means you should be able to get a business loan as an LLC — provided you meet the lender’s requirements.

Specific qualifications will depend on the lender and the type of LLC business loan you’re seeking. But to get a business loan, you’ll typically need the following:

• Good credit. You’ll likely need a FICO credit score of at least 690 to qualify for business loans with the lowest interest rate. Bad credit business loans may be available if your personal credit is spotty but your business is strong.
• Some time in business. Banks and the SBA usually won’t fund businesses that haven’t been around for at least two years. Online lenders offer more flexibility to newer LLCs. For example, OnDeck’s line of credit requires a year in business, while BlueVine’s invoice factoring is available to businesses that have been around for three months.
• Strong revenue. Lenders typically require a minimum annual revenue, which may range from $50,000 to $250,000. If your LLC can’t meet such a threshold, you may need to opt for financing options that rely on your personal credit, like a personal loan for business or business credit card.

While you may have chosen an LLC to limit your personal liability, many business loans may also require you to provide collateral or a personal guarantee. If it’s the latter, you’ll be held personally responsible for repaying the loan if the business is unable to do so.

There are many types of business loan options that might make sense for an LLC include:

• SBA loans. SBA loans for LLCs take many forms. The SBA 7(a) loan is perhaps the most well-known as it provides working capital and can also fund equipment purchases and expansion. Meanwhile, an SBA 504 loan is reserved for businesses that need to buy long-term, fixed assets such as facilities or machinery. One downside is that getting approved and receiving funding can take a while. However, SBA Express loans offer faster funding, but smaller loan amounts — up to $1 million instead of up to $5.5 million.
• Term loans. These loans are lump sums of money that you repay monthly (with interest) over a fixed repayment timeline. Eligible business owners can typically borrow anywhere from $2,000 to $5 million with a small-business term loan. Funding generally comes through quickly, sometimes in a matter of days, if you go through an online lender. But their loans will also likely be more expensive than SBA options or from a traditional bank.
• Business lines of credit. A business line of credit can be a flexible alternative to a traditional business loan. Instead of a lump sum of money, business owners receive a credit line that they can draw on as needed. This typically ranges from $1,000 to $250,000. You’ll pay interest on the amount you borrow only, and smaller credit lines may not require collateral. You may also be able to qualify with a lower credit score.
• Invoice factoring. This type of business financing leverages unpaid invoices to cover short-term needs. The business owner sells their outstanding invoices to a factoring company for a reduced price — discounts often range from 1% to 5% — in return for upfront cash. Invoice factoring is ideal for businesses whose customers are other businesses.

» MORE: Best business bank accounts for LLCs

How to get a business loan for an LLC

• Check your credit scores. Knowing your personal and business credit scores can give you a solid idea of the types of financing that will likely be available to your LLC. You can get a free personal credit score with NerdWallet and review your business credit score through Equifax, Experian and Dun & Bradstreet.
• Determine the right financing option. Every business’s needs are different. If you don’t have the time in business, collateral or annual revenue to qualify for an SBA loan, then a term loan, business line of credit or invoice factoring arrangement could be your next best bet.
• Apply for your loan. You can apply for a Small Business Administration-backed loan via an approved SBA lender. For term loans and business lines of credit, there are plenty of banks, credit unions and online lenders to choose from. Just be sure to shop around before applying for a small-business loan to get the best rates and terms possible.

Compare more small-business loan options

If none of the loans included here works for you, or if you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.