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Our list of the best personal loans for business includes lenders with quick application processes, low borrower requirements, and competitive terms and fees.
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Editor & Senior Staff Writer
Last updated onUpdated
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If you don’t qualify for a traditional business loan, personal loans for business use your personal credit score and borrower history rather than your business’s, effectively presenting an alternative risk profile to skittish lenders. You can then use the personal loan for your business expenses.
Before pulling up a loan application, you’ll want to know your personal loan options. Below, we’ve presented our top picks for personal loan lenders that can be used for business expenses.
Learn More About Our Top Picks
| Company | Best For | Next StepsBest For |
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LendingPoint
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Discover Personal Loans
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Upstart
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LendingClub Personal Loans
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Prosper
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| Show Fewer Options |
Read more below to learn why we chose these options.
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Table of Contents
The best personal loans for business have competitive rates and terms, ample funding amounts, and can be used for a variety of purposes. Here are our picks for the best personal loans for small business.
| Max. Borrowing Amount | APR | Terms | FICO | |
|---|---|---|---|---|
| LendingPoint | $36,500 | 7.99% - 35.99% | 2 - 6 years | Undisclosed |
| Discover Personal Loans | $40,000 | 7.99% - 24.99% | 3 - 7 years | 660 |
| Upstart | $50,000 | 7.4% - 35.99% | 3 or 5 years | N/A |
| LendingClub Personal Loans | $40,000 | 8.98% - 35.99% | 2 - 5 years | N/A |
| Prosper | $50,000 | 8.99% - 35.99% | 2 - 5 years | 600 |
Pros
Cons
We chose LendingPoint because it looks beyond credit scores. According to the lender, it uses technology and data to get a picture of "true creditworthiness." Though LendingPoint isn't very transparent about minimum credit score requirements, research around the web shows that lenders with fair credit scores of around 620 could be approved for funding.
We also like that LendingPoint has a fast and easy application process. You can access up to $36,500 with repayment terms of up to 6 years.
Pros
Cons
Although most known for its credit card network, Discover also offers personal loans with maximum borrowing limits of up to $40,000. What we like most about Discover is that it offers long repayment terms of up to 7 years.
That's not all we like, though, as Discover also has low, competitive interest rates, an easy application process, and fast disbursements -- as quickly as the next business day following loan approval.
Get Started With Discover Personal Loans
Pros
Cons
We like that Upstart’s underwriting process is flexible, taking credit scores into account when they’re available (you’ll still want to clear 580 if you have a score), as well as education, credentials, and work experience. This makes Upstart a viable way to get around the Catch-22 of needing to have a credit history to get credit, especially for young entrepreneurs.
Upstart also offers instant approvals, as well as fast funding in 24 hours or less following approval (in some cases). Upstart also offers loans up to $50,000, which exceeds the maximum borrowing amount of many of the other lenders on this list.
Pros
Cons
While LendingClub does offer business loans through a partnership with Accion, it primarily deals in personal loans -- and these personal loans can be used for business purposes. We like that LendingClub doesn't use the typical borrower qualifications you'd find with bank lenders or even some of its alternative lending competitors.
LendingClub gives borrowers ample time to repay and build their credit in the process (LendingClub reports positive as well as negative repayment behavior). We also like that LendingClub offers joint loans, allowing you to add a cosigner to increase your odds of approval and score a lower rate/higher borrowing amount.
Get Started With LendingClub Personal Loans
Pros
Cons
Unlike most of the lenders on this list (except LendingClub), Prosper allows joint applications. If your credit isn't up to par, you can add a co-borrower to increase your chances of receiving a loan, getting lower rates, and qualifying for a higher borrowing amount.
Speaking of borrowing amounts, Prosper has one of the higher maximum borrowing limits on this list, allowing qualified borrowers to receive up to $50,000. Add in competitive rates, no hidden fees, and next-day funding and it's easy to see why Prosper is a popular choice for personal loans.
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
Read more about how we rate small business lenders.
Why should you choose a personal loan for business over a traditional small business loan? Here are some reasons why a personal loan may be the better fit.
Business loan requirements can be difficult to meet, especially if you’re a new business owner. Your personal and business credit history, time in business, annual revenue, and other factors are considered for approval — which can be a challenge for some businesses.
A personal loan for business purposes can help resolve these problems. Your personal credit score, income, debt-to-income ratio (DTI), and other personal factors will determine your approval and maximum borrowing amount. Your time in business, business credit score, and business revenues will not be a consideration for loan approval.
If you have a high credit score, a solid credit history, and verifiable income, applying for a personal loan for business may be a smart financial move. Going this route means you can receive a higher loan amount, lower interest rates, and more financing options than you might with a business loan.
Most business lenders want to see that your business has been around for a while (usually six months, minimum) before they extend you a business loan. While personal loans aren’t the only startup business loans, they are among the most accessible.
Requirements for a personal loan vary somewhat depending on the lender. However, for most personal loans, there are a few general requirements. These include:
If getting a business loan has been a challenge, a personal loan for business expenses can be a smart solution. As with any type of loan, make sure to shop your options and understand the total cost of your loan. Apply for a loan you can afford, make your loan payment as agreed, and be financially responsible when launching, building, or expanding your business.
Ready to get started? Learn how to get a personal loan for your small business. If you think a business loan is a better fit, check out our guide on how to get a small business loan. Then compare your loan options starting with our picks for best loans for small businesses.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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