How to Get a Business Loan for Your LLC

LLCs can get business loans. Full stop. Your business structure isn't the hurdle most people think it is. 

Lenders care far more about whether you can pay them back than whether you filed as an LLC, S-corp, or sole proprietorship. 

If your business brings in consistent revenue and you've been operating for at least six months, you've got options. 

Term loans, lines of credit, SBA financing, merchant cash advances. 

They're all on the table.

What actually determines approval? Three things: how long you've been in business, how much money you're bringing in, and your credit history. 

Get those right, and the LLC part takes care of itself.

Can an LLC Get a Business Loan?

Short answer: yes. Longer answer: your LLC is eligible for pretty much every type of business financing out there.

Here's the thing. Lenders don't sit around debating the merits of LLCs versus corporations. They're running numbers. Can this business handle the payments? Is there enough revenue? What does the bank account look like?

If anything, having an LLC works slightly in your favor. It tells lenders you've done the work to formalize things. You probably have an EIN. You've got a business bank account. Your personal finances and business finances are separated. These are boxes lenders want to check anyway.

According to the Federal Reserve's 2024 Small Business Credit Survey, 77% of employer firms that applied for financing received at least some of what they requested. The survey didn't break this down by business structure because, frankly, it's not a major factor in approval decisions. Revenue and credit history carry far more weight.

So if you've been hesitating because you weren't sure LLCs qualified, stop hesitating. They do. The real questions are whether your specific LLC qualifies based on its financials, and which type of funding makes sense for what you need.

LLC Business Loan Requirements

Different lenders have different thresholds, but they're all evaluating the same basic things.

Time in Business

Six months is the minimum for most alternative lenders. Banks typically want two years or more. The longer you've been around, the more comfortable lenders feel.

Why does this matter so much? Because lenders want to see patterns. A business that's been operating for two years has weathered some ups and downs. They've got track record. A business that launched three months ago is still an unknown quantity, no matter how promising things look.

If your LLC is newer, you're not out of luck. But your options narrow, and you'll probably pay higher rates. That's the tradeoff for less history.

Revenue Requirements

Most lenders want to see at least $10,000 to $15,000 in monthly revenue. But the number alone doesn't tell the whole story.

Consistency matters just as much as the total. Let's say you're comparing two businesses that both bring in $150,000 a year. One has steady deposits of $12,000 to $13,000 every month. The other swings between $5,000 one month and $25,000 the next. Lenders prefer the steady one. Predictable revenue means predictable ability to repay.

If your business is seasonal or your income fluctuates, that's not disqualifying. Just be ready to explain the pattern when you apply.

Credit Score Considerations

Your personal credit score is going to come up. Even though your LLC is technically a separate entity, lenders still check your personal credit for most small business loans.

Banks usually want 680 or higher. Online lenders are more flexible. Some work with scores as low as 500, though you'll pay for that flexibility with higher rates.

Over time, your LLC can build its own credit profile, which helps. But early on, your personal credit is doing the heavy lifting.

Documentation Needed

Gather this stuff before you apply and you'll save yourself a headache:

1. Three to six months of business bank statements
2. Your Articles of Organization (the document that created your LLC)
3. EIN verification letter
4. Any business licenses you hold
5. Personal ID for anyone who owns 20% or more
6. Tax returns if you're going after a larger loan or working with a traditional bank

Some online lenders have streamlined this. Connect your bank account electronically, and they pull what they need. That cuts the paperwork down significantly.

Types of Business Loans Available to LLCs

You've got the same menu of options as any other business structure. The right choice depends on what you're trying to accomplish.

Term Loans

You get a lump sum. You pay it back over time with interest. Simple.

Short-term loans usually mean repayment in under two years. They fund fast, sometimes within a day. Good for bridging a gap or jumping on a time-sensitive opportunity.

Long-term loans stretch over several years. Monthly payments are lower because you're spreading them out. These make sense for bigger investments where you need time to see returns. Equipment that'll last a decade. A second location. That kind of thing.

Lines of Credit

A business line of credit works more like a credit card than a loan. You get approved for a maximum amount. Draw what you need, when you need it. Pay interest only on what you've actually borrowed.

This is ideal if you're not sure exactly when you'll need cash or how much. Managing cash flow gaps, covering surprise expenses, keeping a safety net in place. Lines of credit for LLCs can range anywhere from $5,000 up to $5 million depending on your qualifications.

SBA Loans

The Small Business Administration doesn't lend money directly. They guarantee a portion of loans made by banks and other lenders, which makes those lenders more willing to offer better terms.

The upside: lower rates and longer repayment periods, sometimes up to 25 years. Loan amounts can reach $5 million.

The downside: paperwork and patience. SBA loans take 30 to 90 days to close, sometimes longer. 

Merchant Cash Advances

MCAs aren't technically loans. You get cash upfront in exchange for a slice of your future sales. Repayment happens automatically as a percentage of your daily or weekly revenue.

Because approval is based primarily on sales volume rather than credit scores, MCAs work for LLCs that might not qualify for traditional financing. The tradeoff is cost. They're typically more expensive than term loans.

If speed is your priority, same-day business funding options like MCAs can get money in your account within hours.

Personal Guarantee Requirements for LLC Loans

This catches a lot of LLC owners off guard.

One of the reasons people form LLCs is liability protection. Your personal assets are supposed to be separate from business debts. That's the whole point.

But here's the reality: most small business loans require a personal guarantee. You're signing something that says if your LLC can't pay, you will. Personally.

Why? Because most small LLCs don't have enough assets or credit history on their own to secure a loan. The personal guarantee reduces the lender's risk. Without it, many small businesses wouldn't get approved at all.

Some financing options skip the personal guarantee. Certain merchant cash advances, invoice factoring arrangements, and revenue-based financing products may not require one. But they're the exception, not the rule.

As your LLC grows and establishes its own credit history, you may eventually qualify for financing without putting yourself on the hook. But for most small business owners, especially early on, the personal guarantee is part of the deal.

How to Apply for an LLC Business Loan

The process is more straightforward than most people expect. Here's how it typically goes.

Figure out what you need and why. Not just the amount, but what the money is for. Lenders ask. Having a clear answer helps your application and helps you pick the right product.

Know where you stand. Check your personal credit. Look at your bank statements. Understand your own numbers before a lender starts asking about them. This also helps you target lenders whose requirements actually match your situation.

Get your documents together. LLC formation paperwork, bank statements, tax returns if needed, ID. Having everything ready before you start means fewer delays once you're in the process.

Compare your options. Banks offer lower rates but tougher requirements and slower timelines. Online lenders move fast and work with more credit profiles but charge more. Business funding options vary widely, so look at several before deciding.

Apply. Most applications are online now and take maybe 10 minutes. Basic info about your LLC, bank account connection or statement uploads, intended use of funds.

Review what comes back. If you're approved, read the terms carefully. Total cost of borrowing matters more than just the interest rate. Ask about fees and prepayment penalties before signing.

Get funded. Accept the offer, and money typically shows up in one to five business days. Some lenders offer same-day funding if you apply early enough.

Tips to Improve Your LLC Loan Approval Odds

A few things that genuinely help:

Keep business and personal finances completely separate. All business income should flow through your LLC's bank account. Mixing things up makes it harder for lenders to evaluate your business on its own merits.

Start building business credit now. Open trade accounts with suppliers who report to business credit bureaus. Get a business credit card and pay it on time. This stuff compounds over time.

Pay down existing debt. Your debt-to-income ratio affects approval decisions. Less outstanding debt means more room for a new loan.

Be specific about how you'll use the funds. "Growing the business" is vague. "Purchasing $40,000 in inventory before our busy season" is concrete. Lenders prefer concrete.

Ask for an amount that makes sense. Requesting more than your revenue can support raises red flags. But asking for too little can leave you short. Match the request to the actual need.

Consider starting smaller. A smaller loan or line of credit is easier to qualify for. Repaying it successfully builds your relationship with that lender and strengthens your business credit profile.

Frequently Asked Questions

Can a new LLC get a business loan?

Yes, though the options are more limited. Most lenders want at least six months of operating history. For newer LLCs, merchant cash advances, short-term loans from alternative lenders, and business credit cards are typically the most accessible options. Expect higher rates compared to what established businesses pay.

Do I need collateral for an LLC business loan?

Not necessarily. Plenty of lenders offer unsecured financing based on revenue and creditworthiness. Larger loans and those with better rates often require collateral or a personal guarantee, but many small business loans don't require you to put up specific assets.

Will applying for a business loan hurt my credit?

The initial application usually involves a soft credit check, which doesn't impact your score. A hard inquiry typically happens only when you accept an offer. Even then, the effect is usually minor and temporary.

How much can my LLC borrow?

It depends on your revenue, time in business, and credit profile. Short-term loans can reach up to $10 million for qualified borrowers. Lines of credit range from $5,000 to $5 million. SBA loans go up to $5 million. Most lenders calculate maximums as a multiple of your monthly or annual revenue.

How long does it take to get approved?

Online lenders often approve within hours and fund within one to three days. Traditional banks and SBA loans take longer, anywhere from a few weeks to a few months depending on the loan size and complexity.

Can I get a business loan with bad credit?

Yes. Some lenders work with credit scores as low as 500. They focus more on your business revenue and recent cash flow than your credit history. Rates will be higher, but options exist for LLC owners with credit challenges.