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.

Stephanie Yip, Former Editor at Finder

Stephanie Yip

Former Editor

Stephanie Yip was the travel editor at Finder and has been writing about travel and lifestyle for over a decade. She has written for a range of travel publications including Thomas Cook Magazine and Showpo. Stephanie has a Bachelor of Communications from the University of Technology Sydney, Australia, and has visited over 50 countries (and counting). She has a passion for sharing her experiences and knowledge of travel and helping consumers stretch their travel cash while on holiday.

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