10
Best Business Loans For LLCs
Featured Partner Offers
1
AdvancePoint Capital
$10,000 - $2 million
Lower than the national average
620
2
National Funding
$5,000 to $500,000
Buy rates start at 1.11%
600
Compare the Best Business Loans for LLCs
| COMPANY | FORBES ADVISOR RATING | LOAN AMOUNTS | APR | LEARN MORE |
|---|---|---|---|---|
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$25,000 to $5 million
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Starting at 6.99%
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$25,000 to $2 million
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7.00% to 30.00%
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$5,000 to $1 million
|
Not disclosed
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$5,001 to $250,000
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9.50% to 12.50%
|
Via Forbes Advisor
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|
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Up to $250,000
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5.99% to 35%
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|
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$5,000 to $500,000
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1.11 factor rate
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On National Funding's Website
| |
|
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$10,000 to $1 million
|
Not disclosed
|
Via Forbes Advisor
| |
|
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up to $1.5 million
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5% to 23%
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Via Forbes Advisor
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|
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$5,000 to $250,000
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35% to 80%
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Via Ondeck's Website
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Best LLC Loans: A Closer Look
BEST FOR LARGE LOANS
SMB Compass Term Loan
APR range
Starting at 6.99%
Loan amounts
$25,000 to $5 million
Minimum Credit Score
680
Starting at 6.99%
$25,000 to $5 million
680
SMB Compass is a business financing company that provides a range of lending services to small businesses nationwide. Loans are available up to $5 million with terms from two to 25 years, making the company a good option if you need a large loan. To qualify, your business must be at least six months old and demonstrate annual revenue of at least $500,000. Collateral may be required, and f unding is available in five to seven days.
- Low minimum time-in-business requirement
- Also offers SBA loans
- No origination fees
- High minimum loan amount
- Does not disclose maximum APRs
- Funding takes five to seven days
BEST FOR ESTABLISHED BUSINESSES
Upwise Capital Business Term Loan
APR range
7.00% to 30.00%
Loan amounts
$25,000 to $2 million
Minimum Credit Score
500
7.00% to 30.00%
$25,000 to $2 million
500
Upwise Capital provides business term loans between $25,000 to $2 million, plus business lines of credit and other financing tools. Repayment terms extend up to seven years, and payments are flexible with biweekly or monthly options. But the lender’s eligibility requirements are more robust than some competitors, especially the time-in-business requirement. To qualify, you must have a personal credit score of at least 500 and demonstrate at least three years in business and $200,000 in annual revenue.
- Funding in as little as two days
- Ability to make biweekly or monthly payments
- Lower credit score requirement than some competitors
- Interest rate may be high
- Requires sharing information with a network of lenders
- Online information about offerings is somewhat confusing
BEST FOR NEWER BUSINESSES
SBG Funding Term Loan
APR range
Not disclosed
Loan amounts
$5,000 to $1 million
Minimum Credit Score
600+
Not disclosed
$5,000 to $1 million
600+
Though its loans are not available to brand new businesses, SBG Funding works with ventures that have operated for at least six months, much shorter than many time-in-business requirements. FICO Score and annual revenue requirements are also more accessible than those imposed by other lenders, making SBG Funding a good option for less established businesses. Loans are available up to $1 million, with funding in as little as 24 hours and repayment terms from six to 48 months.
- Short-term loans up to $1 million
- No collateral required
- Funding in as little as 24 hours
- Closing fees up to 5% of loan amount
- Payments automatically deducted
- Four-year maximum repayment terms
BEST FOR FAST FUNDING
Rapid Finance Small Business Loans
Loan amounts
$5,001 to $250,000
APR range
9.50% to 12.50%
Minimum Credit Score
600
$5,001 to $250,000
9.50% to 12.50%
600
Rapid Finance is a nationwide lender that provides business financing up to $250,000 with repayment terms ranging from three months to 60 months—or five years. There are no origination fees for in-house loans, but you may encounter origination fees of up to 4% if your loan is offered through one of Rapid Finance’s partners. The lender imposes more accessible credit score and revenue requirements than many lenders, but your business must have operated for at least two years to qualify.
- No minimum credit score requirement
- Low annual revenue requirement
- Daily, weekly and monthly payment options
- Payments are automatically deducted from business bank account
- Doesn’t disclose fees online
- Shorter repayment terms than some competitors
Lender details
Eligibility
- Minimum credit score: 600
- Minimum annual revenue: $25,000
- Required time in business: Six months
Funding Speed
Funding can happen as quickly as the same day.
BEST FOR EQUIPMENT FINANCING
Triton Capital Equipment Financing
Minimum Credit Score
600
APR range
5.99% to 35%
Loan amounts
Up to $250,000
600
5.99% to 35%
Up to $250,000
Triton Capital is an alternative lender that provides equipment financing Up to $250,000, plus SBA loans and working capital loans. Equipment loan repayment t 12 to 60 months—or one to five years. Payment due dates are more flexible than those offered by other lenders, with monthly, quarterly, annual, semi-annual and seasonal options .
- Loans approved within two to four hours
- Funding in one to two business days
- Approval based on a soft credit inquiry
- Doesn’t publish minimum loan amounts
- High maximum APR
- Charges an origination fee
BEST FOR SHORT-TERM LOANS
National Funding
APR range
1.11 factor rate
Minimum Credit Score
670
Loan amounts
$5,000 to $500,000
1.11 factor rate
670
$5,000 to $500,000
National Funding offers short-term small business loans from $5,000 to $500,000 with terms of 12 to 18 months. National Funding also offers equipment financing up to $150,000 . In addition to meeting credit score requirements, your business must have operated for at least six months and have at least $250,000 in annual sales. Unlike some business lenders, National Funding offers early payoff discounts that can help you save by paying off your balance and terminating your loan contract early.
- Financing up to $500,000
- Early payoff discounts
- Most loans are funded within 24 hours of approval
- Requires daily or weekly payments
- Potentially high borrowing costs
- Requires minimum gross annual sales of $250,000
BEST FOR IN-PERSON BORROWING
TD Bank
Loan amounts
$10,000 to $1 million
up to $5 million for small business loans
APR range
Not disclosed
Minimum Credit Score
Not disclosed
$10,000 to $1 million
up to $5 million for small business loans
Not disclosed
Not disclosed
TD Bank offers business loans from $10,000 to $1 million with terms ranging from three to five years; lines of credit are available between $25,000 to $500,000. You can access up to $250,000 with the lender’s online application, but you’ll need to apply in person if you need more than $250,000, so consider TD Bank if you prefer in-person lending.
- Ability to apply in person
- Flexible loan amounts
- Clear application requirements
- Must apply in person for loans over $250,000
- Typically requires collateral
- Only available in 16 states
Eligibility
- Minimum credit score: 660
- Time in business: One year
- Minimum annual 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 EARLY PAYOFF
Fora Financial Small Business Loan
APR range
5% to 23%
Loan amounts
up to $1.5 million
Minimum Credit Score
570
5% to 23%
up to $1.5 million
570
Fora Financial provides short-term small business loans up to up to $1.5 million with repayment terms up to 24 months. The lender requires applicants to be in business for at least six months with a personal credit score of at least 570. Approval is available in as little as four hours, with funding possible in as little as 24 hours. The lender also stands out because of its prepayment discounts and the ability to increase your loan amount after making payments for six months or more or paying off 60% of the loan.
- Wide selection of loan types
- Low credit score and time-in-business requirements
- Funds available in as little as 24 hours after offer acceptance
- Repayment terms only go up to 24 months for small business loans
- Doesn’t publish interest rates online
- Must have at least $240,000 in annual revenue
BEST FOR SMALL LOANS
OnDeck Business Term Loan
APR range
35% to 80%
Minimum Credit Score
625
Loan amounts
$5,000 to $250,000
35% to 80%
625
$5,000 to $250,000
OnDeck offers term loans from $5,000 to $250,000 with repayments terms of up to 24 months and lines of credit up to $200,000 with 12-, 18- or 24-month terms . The lender’s low borrowing limits and short repayment periods make it a good option if your business needs a small loan that it can pay off quickly. Eligibility criteria are also more accessible than with some lenders, and same-day funding is available—though you’ll pay a high APR between 35% and 80%.
- Only requires one year in business to qualify
- No hard credit inquiry
- Also offers business lines of credit
- High maximum APR
- Daily or weekly payments
- Not available to businesses in North Dakota or certain industries
Most Popular is calculated from the number of times each affiliate product was selected by Forbes Advisor users over a six month time period.
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 generally no different from small business loans, though some types of funding may be better for one business than another.
How Does an LLC Loan Work?
An LLC loan is a commercial loan provided to a limited liability company to cover working capital, asset acquisition, business expansion or other expenses. This type of loan is typically secured under the name of the LLC, not the individual members, so the business is responsible for making payments. However, if an applicant personally guarantees the loan for the LLC, the lender can hold them liable for paying off the loan if the business defaults.
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.
LLC loan details, including amounts, interest rates 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.
LLC Loan Requirements: How To Qualify
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, expenses, 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.
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
Available loan amounts and terms
Interest rates and fees
Collateral requirements
Application process and requirements
Funding speed
Customer reviews
Types of LLC Loans
The borrowing needs of an LLC can depend on several 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 must repay the loan—plus interest—monthly. 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 for traditional bank loans, but the programs are competitive, and you 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 accrues only 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 a line of credit a good option if your LLC needs 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. With a merchant cash advance, the cash advance company provides a lump sum up front, which is then repaid through a percentage of daily credit card sales. Merchant cash advances often come with high interest rates and hefty fees that can increase the overall cost of borrowing. Consider this option if your business has a high volume of credit card transactions.
- Equipment financing. Equipment financing may be a good choice if your LLC needs to purchase equipment. The item itself often serves as collateral, keeping interest rates competitive and reducing the need to pledge other assets. However, defaulting on the loan can result in losing the equipment, so make sure your LLC can handle the payments.
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:
- 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 by bank, type of financing and other factors. If you’ve been in business for at least three to six months, your LLC may have its own credit score through Dun & Bradstreet. It can take around three years to establish a strong business credit score.
- Consider your other qualifications. To qualify for a loan, your LLC must also meet the lender’s minimum time-in-business requirement, often between six months and two years. Similarly, you should be able to demonstrate that your LLC satisfies the lender’s quarterly or annual revenue requirements. The exact amount varies from lender to lender, but it must be sufficient to cover the business’s existing debt service as well as payments on the new loan.
- 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 be better 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.
- 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 watch out for red flags that may signal poor customer service or even predatory lending practices.
- 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.
- Submit a formal application. Finally, submit an application online or by visiting a lender branch in person. Most lenders contact applicants by phone or email to collect any outstanding documentation or to gather additional information.
Some lenders fund business loans as soon as the day of loan approval. However, it generally takes a few days to receive funds, and the timeline is much longer for SBA loans. LLC loan funding times will also depend on your bank, so contact your financial institution for more information.
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 if you need to cover ongoing needs or minor expenses. They can also include added benefits like cash back, 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 your LLC is small and recently formed, a personal loan for your business might be a suitable option. With personal loans, lenders will evaluate your personal creditworthiness instead of your business’s. Still, personal loans can expose you to personal liability if your 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 crowdfunding and incentives can generate interest and funding for your LLC’s products or services, these tools can require significant investments 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 requires 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 you’ll need a thorough, polished business proposal to be successful.
Methodology
We reviewed 21 popular lenders based on 21 data points in the categories of loan details, loan costs, eligibility and accessibility and repayment experience. We chose the best lenders based on the weighting assigned to each category:
- Loan details. 30%
- Loan cost. 25%
- Eligibility and accessibility. 25%
- Repayment experience. 20%
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 Loans Rating & Review Methodology.
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Frequently Asked Questions (FAQs)
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 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 expenses related to 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 if it meets 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—before applying for financial assistance from the SBA.