Business loans through a bank or the Small Business Administration (SBA) can be a great way to finance business expenses — provided you and your business qualify. If you don’t, you may want to consider a personal loan. While annual percentage rates (APRs) may be higher on personal loans, they’re generally easier to get.
Continue reading to learn more about applying for and using a personal loan for your business.
Compare personal loan rates for business of April 2024
Advertiser DisclosureOverview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Repayment terms
1 to 5 years (2 to 5 years through Credible)
Overview
BHG Money stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
Best personal loans for business
In certain situations, it may make sense to use a personal loan for business expenses, like if you need money for a startup business and can’t qualify for an SBA loan. In these cases, you’ll want to shop carefully for a loan, as not all lenders allow funds to be used for this purpose. The best personal loans for business have large loan amounts, low interest rates and fees, and fast funding.
Personal loans for excellent credit
Loan Amount
$5000 to $100000
Min. Credit Score
Does not disclose
No fees required
Large loan amounts available
Autopay and direct pay discounts
Same day funding
Long loan terms available
Good credit required
5,000 minimum loan amount
Overview
SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number.
The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.
Fees
Option to pay an origination fee (up to 6%) in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
LendingClub: Best online experience
Loan Amount
$1000 to $40000
Mobile app
Low minimum income requirement
High close rate on loans made through Credible
Available in all states
Origination fee
No discounts
Funding not as fast as some competitors
Overview
LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
BHG Money: Best for large personal loans
Loan Amount
$20000 to $200000
Eligible applicants can borrow up to $200,000
Considers borrowers with fair credit
Long repayment terms
Cosigners allowed
Not available in MD or IL
No discounts
Minimum income required of $100,000 annually
Overview
BHG Money stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
Axos: Best for low origination fees
Best for low origination fees
Loan Amount
$10000 to $50000
Long loan terms available
May fund in 1 to 2 days
Low minimum income requirement
Available in all states
Trustpilot score of 4.9/5 stars
High minimum loan amount
Origination fee
No discounts
Good credit required
Overview
Axos is one of few lenders that offers loans for business purposes. Plus, it has a low minimum income requirement, offers repayment terms up to 7 years, and is available in all states. But If you need a loan under $10,000, you'll need to look elsewhere. While this lender may charge an origination fee, it's fees are on the low side, topping out at 3%. You'll also want to have good credit to apply for a loan with Axos. You can expect to receive funds 1 to 2 business days after the loan is approved.
Eligibility
Available in all 50 states
Time to get funds
As soon as the next business day after successful verification
Loan uses
Debt consolidation, home improvement, self-employment, and other purposes
Avant: Best for all credit types
Loan Amount
$2000 to $35000
Borrowers with bad credit considered
Funds as soon as the next business day
1-year loan terms available on Avant's website
No discounts offered
Origination fee
Not available in HI, IA, MA, ME, NY, VT, or WV
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Repayment terms
1 to 5 years (2 to 5 years through Credible)
Happy Money: Best for consolidating credit card debt
Consolidating credit card debt
Loan Amount
$3000 to $40000
Mobile app
Live chat
Low maximum APR
Limited loan terms available
No discounts
Origination fees
Not available in MA or NV
Overview
Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.
You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Upstart: Best fast personal loans for all credit types
Fast personal loans for all credit types
Loan Amount
$1000 to $50000
May fund in 1 business day
No minimum credit score requirement on lender site
Low minimum APR
Trustpilot score of 4.9/5 stars
May charge a high origination fee
No discounts offered
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Reach Financial: Best for fast funding and fair credit
Fast funding and fair credit
Loan Amount
$3500 to $40000
May fund within 1 day
Fair-credit borrowers may be eligible
Social Security number not required to prequalify
Origination fee
No discounts
Not available in CO, CT, ME, NV, NH, TN, VT, WV, or WY
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Zable: Best for short-term loans and same day funding
Short-term loans and same day funding
Loan Amount
$1000 to $35000
Funding as soon as the same day
Low minimum income required
100% digital process
No discounts
Maximum loan amount is lower than most other lenders
Origination fee
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Overview
Zable offers relatively small loan amounts — ranging from $1,000 to $25,000 — that can be deposited in your account as soon as the same day you are approved, if it is by the lender's deadline. It’s an option for fair-credit borrowers, with a minimum credit score of 600, as well as those with lower incomes.
Its origination fees range from 5% to 9%, however, and it does not offer discounts, secured loans, nor the option to add a cosigner to your application. Zable also currently does not offer loans in 21 states.
Fees
Origination fees (5% to 9%)
Eligibility
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchase, car financing
Methodology
Credible evaluated the best personal loans for business based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, whether cosigners are accepted, and whether business loans are allowed. Credible’s team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.
Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.
How to compare lenders
Obviously, low interest rates and few or no fees are ideal. But your business needs may dictate specific loan amounts, funding times, and repayment terms that limit your personal loan options. Itemize the needs of your business, and also consider the following when comparing lenders.
- APR: The annual percentage rate indicates how much you’ll pay for your loan, expressed as a percentage of the total loan amount. It’s similar to the interest rate, but also accounts for any upfront fees, like an administrative or origination fee. The lower the APR, the better.
- Fees: There are several types of fees associated with personal loans, though they vary widely by lender. Common fees include origination fees, which are typically subtracted from your loan funds before you receive them, and late fees.
- Loan amount: Your business needs will determine the size of the loan you apply for, while your ability to make payments, in part, will determine how much you qualify for. While personal loans are often capped at around $50,000, certain lenders offer higher amounts.
- Repayment terms: A loan’s repayment term is the amount of time you have to repay it. This has a direct impact on the size of your monthly payments, which impacts the loan amount you qualify for. Longer terms generally have smaller monthly payments, but you’ll pay more in interest over time. Shorter terms are likely to come with higher monthly payments, but you could save on interest.
- Funding time: Certain lenders offer same-day or next-day funding once your application is approved, while others may take up to a week to fund your loan. If your business needs are urgent, choose a lender that offers fast funding.
Tip
Having a good credit score (a FICO score above 670), a low debt-to-income ratio (DTI) — lenders prefer under 35% — and a solid income can help you qualify for a lower APR.
Learn More: APR vs. Interest Rate on a Personal Loan
Can you use a personal loan for business?
Some lenders allow personal loan funds to be used for business purposes, but many don’t. You might consider this route if you need capital but can’t qualify for a traditional business loan.
Fortunately, personal loans may be easier to qualify for than business loans. You don’t need to provide details about your business to get a personal loan, and you don’t need to generate a specific amount of revenue or have a business credit score to qualify. If your business is still new — or if you’re looking for funds to get your business off the ground — a personal loan might be a good fit.
To find a personal loan to use for business expenses, look for lenders with no restrictions on business use.
Keep in mind
While they may be easier to qualify for, personal loan interest rates may also be higher. Consider your options carefully before taking out a personal loan for business use, since it may not be the most cost-effective method of financing.
SBA loans vs. personal loan
An SBA loan is a type of business loan guaranteed by the Small Business Administration. Because the SBA backs these loans, they’re less risky for lenders. They also have more guidelines regarding how you can use them. Below, we compare different aspects of SBA and personal loans.
| | |
|---|
| | Typically up to $50,000, though some lenders offer up to $200,000 |
| Businesses must:
1. Operate for a profit
2. Operate and be located within the U.S.
3. Have sound credit
4. Meet SBA size standards
5. Exhaust non-government financing options | Requirements vary by lender, but generally include:
1. Fair, good, or excellent credit score
2. Consistent source of income
3. Proof of employment
4. DTI under 35% |
| Up to 25 years, depending on the type and purpose of loan | |
| 1. Microloans: Generally range between 8% and 13%
2. 7(a) loans: generally capped at the prime rate plus 2.75%, but can be higher for larger loans
3. 504 loans: pegged to U.S. Treasury rates, generally totals 3% of debt | |
| | |
| | Within a day to up to a week after approval |
| Lender fees, guarantee fees | Application, origination, late payment |
| 1. Established businesses (except for microloans)
2. Businesses that don’t need immediate funding
3. Businesses looking to borrow a large amount | 1. Newer businesses
2. Entrepreneurs who haven’t yet launched their business
3.Businesses that can’t qualify for business loans |
Pros and cons of a personal loan for business
Before taking out a personal loan for your business, compare the following pros and cons:
Pros:
- Fixed monthly payments could make budgeting easier.
- Generally unsecured, meaning you wouldn’t need to provide collateral to qualify.
- Can provide fast funding — sometimes within a day.
- Fewer qualification requirements than business loans, and often easier to get.
Cons:
- APRs can be higher than on business loans.
- If you miss a monthly payment, it could hurt your personal credit score.
- Lower loan maximums in general compared to business loans.
- Repayment periods may be shorter than on business loans.
How to get a personal loan for business
The process of getting a personal loan for business is the same as getting a personal loan for any other use. And because a personal loan application doesn’t take your business details into account, it’s generally easier than applying for a business loan. Here’s how it works:
- Compare lenders: Research and compare various lenders to find a loan that works for you. Consider APRs, fees, repayment terms, and loan amounts.
- Prequalify: Prequalifying can give you an estimate of the rates, amounts, and terms you may be eligible for. Get prequalified when possible to make comparison shopping easier, but remember it is not an offer of credit, and your final rate could differ. Prequalifying won’t affect your credit, but proceeding to apply for a loan will.
- Choose a loan and apply: Once you settle on a lender, apply for the loan. Many lenders have an online application. You’ll likely need to provide your ID, proof of address, proof of income, and more. Check with the lender for specific application requirements. It is at this point that the lender will conduct a hard credit pull, which can lower your score by a few points for up to a year.
- Get your funds: If the lender approves your loan, you’ll receive a loan agreement to sign. Once you sign, you’ll get your funds. Depending on the lender and how it disburses your loan, you could get money within a day.
Compare Personal Loans
Alternatives to a personal loan for business
While a personal loan can be a smart way to invest in your business, there may be better options. Consider the following alternatives to using a personal loan for business:
- SBA loans: SBA loans are business loans backed by the Small Business Administration. You can get them from a wide range of lenders, but your business has to meet certain eligibility requirements to qualify.
- Business lines of credit: Like a personal line of credit, a business line of credit gives you access to revolving credit, so you only borrow what you need.
- Business credit cards: A business credit card is similar to a personal credit card — it’s a revolving source of credit, and you pay interest on the unpaid balance. Business credit cards often have added perks and rewards, like points for travel and dining. But interest expenses can accrue rapidly if you keep a balance on the card.
- Grants: Grants are a great way to fund your business because, unlike loans, you don’t have to repay them. The trick is finding grants you and your business are eligible for. The federal government, state governments, and private companies all offer grants for small businesses. Resources like Grants.gov, the U.S. Economic Development Administration, and the Small Business Development Centers can help.
Personal loan for business FAQ
Is it a good idea to get a personal loan for business?
It depends on your business and personal finances. A personal loan may be a good option for business needs if you need quick funding and are struggling to get a business loan. It’s also an option if you can’t qualify for a business loan. If you have a well-established business and can qualify for a business loan, however, you could potentially borrow a larger amount and not put your personal finances on the line — as well as pay less in interest.
Can you get a personal loan for business with bad credit?
Yes, it’s possible. Some lenders provide personal loans for bad credit, but you’ll probably have fewer options and higher costs. Consider looking for a lender that accepts cosigners or offers secured loans — either could help you qualify or improve your terms.
Loan Amounts:
Meet the expert:
Emily Batdorf
Emily Batdorf is a personal finance expert, specializing in banking, lending, credit cards, and budgeting. Drawing on her scientific background, she's developed a knack for analyzing financial products in the context of different needs. She finds joy in helping readers understand their best options and shuns a one-size-fits-all approach.
