Do you need an LLC to get a business loan?

No. Many lenders work with sole proprietors, partnerships and corporations, too. However, having an LLC may improve your chances with lenders that don't work with sole proprietors, and it helps build a separate business credit profile.

Does a business loan hurt your personal credit if you have an LLC?

Generally, no — business loan payments typically only appear on your business credit report. However, if you sign a personal guarantee and default, it can affect your personal credit and expose your personal assets.

What credit score does an LLC need to get a loan?

It depends on the lender. Fundbox accepts scores as low as 600, while banks and SBA lenders typically prefer 670 or higher. Marketplace lenders tend to offer more options for lower scores.

Can a brand-new LLC get a business loan?

It's difficult, but possible. Fundbox accepts LLCs with as little as three months in business, and marketplaces like Lendio and Fundible work with newer businesses, too. Expect higher rates and lower limits if you haven't yet reached one year in business.

What is the difference between an LLC loan and a regular business loan?

There is no structural difference. Lenders don't offer a separate "LLC loan" product. The term simply refers to a standard business loan taken out by an LLC.

Luzi Ann Javier

Editor

Luzi Ann Javier is the Senior Financial News and Community Manager at Moomoo and formerly the Markets Editor at Finder. She’s an award-winning journalist who honed her skills in financial journalism working at Bloomberg News in New York, Singapore and Manila for over 15 years. She previously led Bloomberg News’ Metals and Mining Team Americas before moving to the company’s breaking news team as an editor. When she’s not writing financial news or playing around with stock screeners and spreadsheets or paper money, you’ll find her at the beach, either in the Caribbean, Hawaii, Florida or her backyard, the Jersey shore.

Expertise

Analyzing trends in markets and financial data, writing columns and in-depth reports, editing

Experience

She was part of the 11-reporter team behind Bloomberg's "Recipe for Famine" series that won the Overseas Press Club of America's Malcolm Forbes award for best business reporting from abroad in newspapers or news services; the SABEW's award for best real-time news organization, NAAJ award for special projects and 2009 New York Press Club award for continuing coverage.
Her in-depth reports also earned honorable mention in North American Agricultural Journalists (NAAJ) awards in 2014 and 2015.

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