Best LLC Small Business Loans For Good & Bad Credit
Securing an LLC business loan can help startups and mature entities grow or launch faster. So where do you start? PrimeRates.com can simplify the shopping and application process for LLC business loans. You can receive personalized loan offers through PrimeRates’ quick and simple pre-application online process. Keep reading to discover the pros and cons of some of the top options for LLC business loans.
What is an LLC business loan?
In simplest terms, an LLC business loan is essentially a partnership that can deliver cash quickly. Online lenders can match business owners and help them grow, manage, or start their business.
How do you apply for a LLC business loan?
You have a few options when it comes to applying for an LLC business loan including:
- Local bank
- Local credit union
- Online lender
- Small Business Administration (SBA)
What documentation is needed to apply?
Similar to most business loans an LLC business loan typically requires documentation including:
- Proof of business activity
- Credit check
- Verification of ownership
- Financial statements
- Potential business identification numbers
Who is eligible to apply for an LLC business loan?
If you can provide the documentation listed above you may be eligible for an LLC business loan. In addition, you must be a registered business for a minimum of 4 months and have an active business bank account.
Best Options for Financing Your LLC
Personal Loans
There are many ways you can obtain a personal loan to grow or launch your LLC, thus making it a competitive option.
Pros
- Personal loan has many uses
- No collateral needed
- Loan amounts typically range from $1,500 – $100,000
- Reasonable rates
- Available for most credit types
Cons
- Fixed payment
- Origination fees can apply
- Prepayment penalties can apply
LightStream
LightStream offers competitive financing options for LLC business loans. They are a credible national lender that operates online as a division of SunTrust Bank.
Pros
- Rate beat program
- No fees
- Low interest rates
- Quick funding
- Borrow from $5,000 to $100,000
- Terms range from 24 to 144 months
Cons
- Hard pull required
- Seeks good credit candidates
LendingClub
LendingClub offers peer-to-peer lending options with fast approval and reasonable interest rates. Peer-to-peer lending connects people with money to people who need to borrow money.
Pros
- Clear terms
- Quick online pre-approval
- Competitive interest rates
- Terms range from 36 to 60-months
Cons
- Application process may require copies of tax documentation
- Passes accounts into collection quickly after missed payment
- Unsecured loans only
SoFi
Working with SoFi can be an attractive option for an LLC business loan if you have good credit.
Pros
- No fees
- Terms range from 2 to 7 years
- Fixed or variable APR offered
- No collateral required
- Borrow from $5,000 to $100,000
- Low interest rates
Cons
- Better for good credit borrowers
- Strict approval terms
- Hard credit pull
- Slower funding
Prosper
In 2006, Prosper was one of the first companies to introduce marketplace lending and is still thriving with their model today. Prosper has funded over $5 billion in loans and targets people with fair to excellent credit.
Pros
- No prepayment fees
- No collateral required
- Fixed interest rates
- Low interest rates
- Borrow from $2,000 to $35,000
Cons
- Requires minimum FICO score of 640 for approval
- Only 3-year and 5-year terms offered
- Origination fee
- Not a direct lender
UpStart
Similar to LendingClub, UpStart is a peer-to-peer lending company that can provide financing for LLC business loans. UpStart may be a good choice for applicants with little to no credit history, steady income, and quality education.
Pros
- Maximum loan term of 5 years
- Competitive interest rates between 9.57 percent and 29.99 percent
- Fast approval and funding process
- Loans range between $1,000 and $50,000
Cons
- Minimum credit score 620
- Unsecured loans only
- Loan origination fee of 1 to 6 percent
Friends & Family
Borrowing money from friends and family may help your LLC launch faster with fewer hurdles. However, there are significant risks involved that should be seriously considered.
Pros
- Flexible options
- Low to no interest rates
- Lender and borrower can benefit
Cons
- Tax issues
- Mix business and personal relationships
- Lack of clarity
Credit Cards
Credit cards may provide funds to launch or grow your LLC faster. However, credit cards can come with higher interest rates than comparable options.
Pros
- Convenient
- Build your credit
- Potential to earn rewards
- Special promotions may apply
- Buy now, pay later
Cons
- Higher interest rates
- Annual fees may apply
- Increased risk for fraud
- Risk for overspending
Crowdfunding
Crowdfunding is an increasingly popular option for startup and mature LLC businesses to raise money. The process may sound simple but it will take a well thought out strategy and solid execution to work in most cases.
Pros
- Opportunity to not give up equity
- Fundees finance your product
- Creates momentum & opportunity
- Potential to raise a lot of money
Cons
- You must fund investors
- Risk for scam
- Requires hard work & preparation
- Expensive
- Arbitrary period in which you must win or lose can add unnecessary stress
Can an LLC borrow money from a bank?
In most cases, an LLC can borrow money from a bank but there may be restrictions.
Is it easier to get a loan with an LLC?
Many factors can influence how easy or complicated it is for an LLC to secure a loan. Doing your due diligence and making an educated decision can simplify the process.
Can an LLC loan money to an individual?
In most cases, an LLC can loan money to an individual for business related purposes. However, there can be significant risk involved. Lending money to an individual using personal funds can be a safer option.
Types of LLC Business Loans
- LLC Startup Business Loans
- Loan range: $1,000 – $100,000
- Minimum credit score: 575
- LLC Bad Credit Business Loans
- Loan range: $5,000 – $250,000
- Minimum credit score: 500
- LLC Cash Advance
- Loan range: $5,000 – $250,000
- Minimum credit score: 550
- LLC Women Owned Business Loan
- Loan range: $10,000 – $1,000,000
- Minimum credit score: 550
- LLC Short Term Loans
- Loan range: $10,000 – $500,000
- Minimum credit score: 520
- LLC Small Business Loans
- Loan range: $10,000 – $1,000,000
- Minimum credit score: 590
- LLC Working Capital
- Loan range: $10,000 – $1,000,000
- Minimum credit score: 600
- LCC Business Loan Equipment Financing
- Loan range: $10,000 – $1,000,000
Conclusion
In conclusion, securing an LLC business loan may be easier than you thought. Online lenders can be a time-saving resource that allow you to compare offers from the comfort of your own home or office. PrimeRates.com provides a secure online platform for you to shop and compare offers.
