LLC Loans: Overview and How to Get One
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If you operate a limited liability company (LLC), a range of business financing options can offer the capital you need. LLC loans can help you fund startup costs, inventory and equipment purchases, business expansion and more.
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What is an LLC loan?
An LLC loan is a small-business loan that provides funding for a limited liability company — a type of business structure that functions like a hybrid between a corporation and a partnership.
LLC loans are available from banks, credit unions, online lenders and SBA lenders.
In reality, these products are the same as any other type of business loan — most small-business loans do not have qualification requirements specific to the legal structure of a business. The right LLC loan for your business depends on factors such as your funding needs and qualifications.
How an LLC loan works
LLC loans are similar to other business loans in how they work. If you are approved by the lender for an LLC loan, you’ll receive the money in a lump sum or be approved for a set amount of funds that can be withdrawn at your convenience.
Depending on the type of LLC loan, you may be asked to offer assets as a way to ensure repayment of the loan. A secured business loan requires collateral, like equipment or another asset, to back up the loan. An unsecured business loan, on the other hand, doesn’t require collateral.
The interest rate you pay may be fixed, meaning it won’t change during the loan term, or it may be variable, which means it’s not set and may go up or down.
The amount and frequency of your loan payments will be decided by the lender. You may be required to make monthly, weekly or daily payments based on the terms in the business loan agreement.
Almost all LLC loans require a personal guarantee. A personal guarantee overrides the liability protections you, the business owner, typically get when creating a limited liability company. By signing a personal guarantee, you agree to repay the debt if your business fails to pay. In the case of default, the lender can seize your personal assets to cover its losses.
Best LLC loan options
| Product | Max loan amount | Min. credit score | Learn more |
|---|---|---|---|
 SBA 7(a) loan Apply now with Fundera by NerdWallet | $5,000,000 | 650 | Apply now with Fundera by NerdWallet |
 Bank of America Business Advantage Unsecured Term Loan NerdWallet Rating | Undisclosed | 700 | |
 OnDeck - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $250,000 | 625 | Apply now with Fundera by NerdWallet |
 Bluevine - Line of credit NerdWallet Rating Apply now with Fundera by NerdWallet | $250,000 | 625 | Apply now with Fundera by NerdWallet |
 Wells Fargo Small Business Advantage® Line of Credit NerdWallet Rating | $50,000 | 680 | |
 iBusiness Funding - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $500,000 | 660 | Apply now with Fundera by NerdWallet |
 Fora Financial - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $1,500,000 | 570 | Apply now with Fundera by NerdWallet |
 JR Capital Equipment Financing NerdWallet Rating Apply now with Fundera by NerdWallet | $10,000,000 | 620 | Apply now with Fundera by NerdWallet |
 Fundbox - Line of credit NerdWallet Rating | $150,000 | 600 | |
 Accion Opportunity Fund - Small Business Working Capital Loan NerdWallet Rating | $250,000 | 600 |
How to get an LLC business loan
You can get a business loan for your LLC by following these steps:
1. Review LLC loan requirements
Understanding typical business loan requirements can give you a solid idea of the types of financing that will likely be available to your LLC. Although qualifications vary from lender to lender, they’ll likely consider:
Personal credit score. You’ll likely need a personal credit score of at least 690 to qualify for business loans with the most competitive rates and terms. You can get a free personal credit score with NerdWallet and review your business credit score through Equifax, Experian and Dun & Bradstreet.
Time in business. Banks and SBA lenders usually lend to businesses that have been around for at least two years. Online lenders offer more flexibility to newer LLCs. For example, OnDeck’s term loan requires 12 months in business, while Fundbox’s business line of credit is available to businesses that have been in operation for just 6 months.
Annual revenue. Lenders might require you to meet a minimum annual revenue threshold to show the strength of your business finances. Banks will likely ask you to meet higher minimums, whereas online lenders may be more flexible. If you are a new LLC that doesn’t have established finances, you may need to opt for financing options that rely on your personal credit instead of business revenue, like a personal loan for business or business credit card.
2. Determine the right type of LLC loan
Every business’s funding goals are different. You should think about what type of loan you want and can qualify for, how much funding you need and how fast you need it.
Here are some of the most common types of LLC loans:
You should also evaluate how much debt you can afford. A business loan calculator can help you estimate interest costs and monthly payments. You don’t want to take out a new loan if you won’t be able to pay it back.
3. Compare LLC loan lenders
Once you have an understanding of your funding needs and qualifications, you can begin researching different small-business lenders.
In general, banks and credit unions offer the best rates and terms, but come with more stringent qualification requirements. Online lenders are faster to fund and offer more flexible eligibility criteria. They usually come with higher borrowing costs than traditional lenders, however, especially if you have poor credit.
Compare several options — considering factors such as interest rates, repayment terms, funding speed and loan amounts — to decide which lenders are best for your LLC.
It can also be helpful to read customer reviews to get a sense of a potential lender’s credibility and reputation. Be wary of any companies that promise “guaranteed approval” or “no credit check,” as these may be predatory lenders looking to take advantage of businesses that are having trouble qualifying for other types of financing.
4. Gather necessary LLC loan documentation
Most lenders will require you to provide some, if not all, of the following as part of your LLC loan application:
Personal information about you and any other members of your LLC.
Basic business information and paperwork, such as your employer identification number, LLC articles of organization and business license.
Personal and business bank statements.
Personal and business tax returns.
Business financial statements (e.g., profit and loss statement, balance sheet).
Collateral information, if applicable.
5. Apply for your LLC loan
After collecting all the necessary paperwork, you’ll complete and submit your application. Online lenders will allow you to apply online and may give you the option to digitally connect your financial accounts in lieu of uploading the required documentation.
Although some bank and SBA lenders may offer an online application process, others may require you to visit a bank branch to apply in person.
6. Review your LLC loan agreement and receive funds
Online lenders may be able to approve and fund your application in as little as 24 hours. Bank and SBA loans, on the other hand, may take anywhere from a few weeks to a few months to fund.
In any case, before signing a business loan agreement, make sure you thoroughly review the terms and conditions and reach out to your lender if you have any questions or concerns.
After you’ve signed the agreement, your lender will release your funds.
» MORE: How to get a business loan
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Alternatives to LLC loans
If you don’t think you can qualify for an LLC business loan — or simply want to explore other financing solutions — here are a few to consider:
Personal loans. New LLCs or single-member LLCs with strong credit may consider a personal loan for their business. These flexible loans can offer affordable rates, but will put your personal credit at risk if you can’t pay.
Business credit cards. Although you never want to exclusively rely on a business credit card for financing, these products can be useful for funding everyday purchases. Credit cards with a 0% intro APR period can be a particularly good option for startups, as long as you don’t build up too much debt that you can’t repay.
Family and friends loans. Business loans from family and friends can be an alternative to an LLC loan. While there’s no formal loan application process for this type of loan, you still want to put the loan details in writing so there are no misunderstandings in the future.
Small-business grants. Grants offer a free form of financing that doesn’t need to be repaid. Although it can be time-consuming to search and apply for small-business grants, they can be an ideal option if you can secure them.
Crowdfunding. Similar to a business grant, crowdfunding can be used to raise money for your business without taking on additional debt. Crowdfunding can also be a way to promote your business and build a loyal customer base.
Marianne Hayes, a freelance writer, contributed to this article.
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features. We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences. Here’s how we evaluate each lender and the approximate weights we place on each category:
Cost (37%). Lenders that don’t charge origination fees or prepayment penalties rank higher in this category.
Transparency (22%). Lenders that make it easy for borrowers to understand loan rates, fees, terms, qualification requirements and more rank higher in this category.
Credit (15%). Because it helps borrowers establish business credit, lenders that report timely payments to the commercial credit bureaus rank higher in this category.
Underwriting and loan flexibility (11%). Lenders that have flexible underwriting and offer multiple payment terms rank higher in this category.
Application experience (7%). Lenders that offer fast funding and multiple ways to apply for a loan rank higher in this category.
Customer service (7%). Lenders that provide multiple ways to speak with a customer service representative and an online dashboard for loan management rank higher in this category.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
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