LLC Loans: 5 Ways to Finance Your Limited Liability Company

Updated on June 23, 2021
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If you’re looking to fund your LLC—whether you’re just starting out or have been in business for a few years—there are a variety of loan options available to you. When it comes down to it, LLC business loans are just like other small business loans.

The only difference is you’d use an LLC loan to fund your limited liability company as opposed to a C-corporation or general partnership.

Here, we’ll break down the different ways you might finance your LLC, as well as offer tips on how to get a loan for your business.

Best LLC Business Loans

Type of Loan Estimated APR Minimum Credit Score Best For
Bank loans
3% to 7%
700+
Established LLCs with excellent credit
SBA loans
5% to 8% (variable based on the Prime Rate)
650+
Alternative to bank loan; long-term, affordable financing
Online term loans
9% to 99%
500+
Fast access to funding; newer LLCs
Business lines of credit
10% to 99%
600+
Working capital needs; seasonal LLCs
Invoice financing
10% to 79%
500+
LLCs with capital tied up in unpaid invoices
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1. LLC Bank Loans

Bank loans are one of the best ways to fund any business. Banks will offer the most ideal loan amounts, terms, and lowest interest rates.

In order to borrow money from a bank, however, your LLC will have to meet top qualifications. Banks will require that you have excellent credit and strong business financials. Many will also want to see that you have at least two or more years in business.

Additionally, banks have lengthy application processes with extensive documentation—these LLC loans will not be your best choice for fast financing.

Nevertheless, if you can access a bank loan, it will be the most affordable form of funding for your LLC.

Where to Get a Bank Loan

Big banks like Chase, Wells Fargo, and Bank of America all issue business loans.

If you have a relationship with your community or local bank, however, you might start by working with them to see if they can help you get financing for your LLC.

2. LLC SBA Loans

If you can’t qualify for a bank loan, an SBA loan will be the best alternative for long-term, low-rate financing. Guaranteed by the SBA and issued by lending partners (like banks and credit unions), SBA loans can be used for a variety of business purposes.

The most popular SBA loan program, the 7(a) loan program, offers loans of up to $5 million with terms of up to 25 years. Interest rates typically range from 5% to 8%, although rates vary based on the market Prime Rate, in addition to your business’s qualifications.

Like bank loans, SBA loans are slow to fund and require strong qualifications. Many SBA lenders want to see at least two years in business and credit scores of 650 or higher.

If you’re looking for an LLC startup loan, however, the SBA microloan program may offer greater flexibility.

Where to Get an SBA Loan

Most SBA lenders are banks and credit unions. Hundreds of banks across the U.S. participate in the 7(a) loan program, including well-known institutions like Chase, Wells Fargo, and U.S. Bank.

The SBA also releases a quarterly list of the top 100 most active lenders on their website—this list includes more regional options like Huntington National Bank, as well as banks like Live Oak, which allows you to submit your application online.

3. LLC Online Term Loans

Online term loans will be one of the most versatile options for financing your LLC. These loans can have repayment terms as short as six months, but as long as five years.

Online loans are quick to fund and offer streamlined applications, often with minimal documentation. Online lenders will also have more flexible requirements—meaning new LLCs and even those with bad credit may be able to qualify.

The better your qualifications, however, the better interest rates you’ll be able to receive. And although rates can start as low as 9% on these LLC business loans, they can reach as high as 99%.

Where to Get an Online Term Loan

If you have strong credit and at least two years in business, online lenders like Funding Circle and Credibility Capital will be worthwhile options for affordable LLC loans—and will fund faster than bank or SBA loans.

For less established businesses, you might consider lenders like OnDeck and Credibly. These online lenders offer short-term loans and can work with newer LLCs, those that have been operating for one year and six months, respectively.

4. LLC Business Lines of Credit

A business line of credit works differently from a traditional term loan. With a business line of credit, you receive access to a pool of funds and can draw from it when you need funding.

You only pay interest on the funds you draw—and in most cases, once you’ve repaid what you’ve borrowed—your line resets to the original amount. Business line of credit amounts can range from $10,000 up to $1 million. Repayment terms typically fall between three and 18 months.

Lines of credit are ideal for working capital needs, as well as emergency funds. If you run a seasonal LLC, this might be a great type of financing to keep in your back pocket.

Some banks offer business lines of credit, and these products will have similar qualifications and application processes to standard bank loans. Online lenders, however, also provide lines of credit—with more flexible requirements and faster access to funds.

That said, if you can qualify, a business line of credit from a bank will almost always offer more affordable interest rates.

Where to Get a Business Line of Credit

Both Wells Fargo and Bank of America offer unsecured business lines of credit with low interest rates and no collateral required. Capital One also offers a working capital line of credit designed for managing cash flow needs.

Online lenders that offer business lines of credit include BlueVine, Idea Financial, and Headway Capital. To qualify for a BlueVine line of credit for your LLC, you must have a minimum credit score of 600, at least six months in business, and a minimum monthly revenue of $10,000.

5. LLC Invoice Financing

For LLCs that have capital tied up in unpaid invoices, invoice financing is a fast and simple way to alleviate cash flow issues. With invoice financing, you’ll receive an advance of capital in exchange for your unpaid invoices—typically up to 85% of the value of the invoices—and receive the remaining amount (minus fees) when the invoices are paid.

Because invoice financing is self-securing (the invoices themselves serve as collateral), this type of LLC business loan is often easier to qualify for compared to other forms of funding.

Invoice financing is ideal for B2B businesses, as well as seasonal businesses, and can be a particularly affordable solution if your customers pay their invoices on time. Fees often range from 1% to 2% of the total value of the invoice—and are charged for each week it takes the customer to pay.

Where to Get Invoice Financing

A range of online lenders offer invoice financing, with simple applications and fast funding times. Invoice financing companies include AltLINE and Triumph Business Capital.

How to Get an LLC Business Loan

To get a loan for your LLC, you can follow these simple steps:

  1. Decide which of these types of financing is best suited for your needs. You’ll want to think about how much capital you need, what you need the funding for, and how much debt you can afford.
  2. Evaluate your eligibility. Consider your credit score, time in business, and annual revenue—as well as other key business financials.
  3. Search for the right lender. You’ll want to find a reputable lender that both offers the product you want and has requirements you think you can meet.
  4. Gather the necessary documents to submit your loan application. Typically, you’ll need to provide basic information about yourself, your business, as well as business bank statements, financial statements, and tax documents.
  5. Submit your application. The lender will review your application and follow up with questions if necessary. Once the underwriting process is complete and you’re approved, you’ll receive a loan agreement to review and sign.

Use our guide for more information on how to get a business loan.

The Bottom Line

At the end of the day, LLC small business loan options are widely available for new and established companies alike.

To find the right financing for your LLC, you’ll want to follow the same steps as any other entity type—determine your capital needs, compare the different types of funding, evaluate your qualifications, and work through the business loan application process.

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Randa Kriss
Senior Staff Writer at Fundera

Randa Kriss

Randa Kriss is a senior staff writer at Fundera.

At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions. 

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