Find the Lowest Rates on Personal Loans for Business

What is a Personal Loan for Business?

By Meredith Wood, Editor-in-Chief

Last Updated: July 11, 2019

Personal loans for business purposes can be especially useful for newer businesses without established business histories. If you’re a business owner in this situation, personal loans for business often have lower interest rates than many other business loans you’d typically qualify for.

Maximum Loan Amount
$35K
Loan Term
3 to 5 years
Interest Rates
5.99 - 36% APR
Speed
As fast as 1 day
Pros
  • Can be much less expensive than a business loan
  • Great for customers with limited business history
  • Repaid monthly rather than weekly or daily
Cons
  • Reports to your personal credit history
  • Some prefer to separate business from personal finances
  • Limited to up to $40,000
Compared to other loan types
Loan types Max amount Interest rate Speed
Personal Loan for Business $35K 5.99 - 36% APR As fast as 1 day
SBA Loan $5K - $5M Starting at 7.75% As fast as 2 weeks
Business Term Loan $25K to $500K 7 - 30% As fast as 2 days
Business Line of Credit $10K to over $1M 7% - 25% As fast as 1 day
Invoice Financing Up to 100% of invoice value 8 - 30% As little as 1 day
Startup Business Loan $150K 7.9 - 19.9% As fast as 2 weeks
Equipment Financing Up to 100% of equipment value 8 - 30% As fast as 2 days
Short-Term Business Loan $2.5K - $250K Starting at 10% As fast as 1 day
Merchant Cash Advance $2.5K - $250K 1.14 - 1.18 As little as 2 days

Close

Who Qualifies for Personal Loans for Business?

If you’ve got a great personal credit score, personal loans for small business could be an excellent way to finance your new venture.

You’ll need to have a credit score of 580 or above to consider it a viable option. And again, nothing about your business will get considered in your application.

Let's get started
Most customers who were approved had

**Based on past Fundera customers

Annual Revenue
Over $45K
Credit Score
680
Time in Business
Over 2 years

How Do You Apply for Personal Loans?

The application process for a personal loan for business will depend on the type of lender you’re working with. Many business owners apply to personal loans from their preferred bank, which will typically have a longer application process.

Others will apply to personal loans online. These lenders will have more streamlined and efficient application processes—only requiring a handful of documents in the actual application.

Documents you need:
  • Driver's License
  • Credit Score
  • Bank Account Number
  • Pay Stubs / W-2s
  • Personal Tax Return

How Do Personal Loans for Business Work?

For plenty of entrepreneurs, getting that first stage of financing can seem like an impossible climb.

How can you start your business without having enough funds?

But Fundera’s marketplace offers a solution for business owners who don’t have much business history or finances yet:

Using personal loans for business.

It’s important to understand the difference between personal loans “for business” and traditional business loans, and to be aware of what personal loans for business require.

Let’s get started.

How to Get a Personal Loan for Business

Personal loans for business depend a whole lot on your personal credit score—your business’s financial track record doesn’t matter.

After all, your lenders are making a loan to you, the business owner, and it’s your responsibility to repay that loan.

What does this mean for you?

Whether you’re using those funds for your business or something else doesn’t affect that model.

When a Personal Loan Makes Sense for Business Owners

For small or new businesses that don’t have significant financial history yet, personal loans might just be a perfect fit.

However…

Personal loans for business are only really an option if you’ve got a strong credit score—that’s the most important part of the loan application process.


What Will a Personal Loan for Business Cost You?

One great thing about personal loans?

Their payment structure is easy to understand—it’s a term loan.

No hidden fees, no complicated documents—just you, a lump sum of cash, and a fixed monthly payment.

Paying the Closing Fee

There is a charge you should be aware of, though: the closing fee.

It’s also pretty straightforward, though.

Subtract the closing fee from the loan amount you’ve been approved for, and that’s how much capital you can actually expect in your bank account.

Say you apply for a $5K loan, but there’s a $250 closing fee attached.

Once you get funded, you’ll only receive $4,750 in your bank account—but you’ll have to pay interest on that original $5K.


Editor's Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.