The 7 Best Personal Loans For Business
Our list of the best personal loans for business purposes includes lenders with quick application processes, low borrower requirements, and competitive terms and fees.
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Expert Analyst & Reviewer
UPDATED
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Are you looking for a loan to cover your business expenses? Many traditional business loans are difficult to qualify for. If you’re struggling to be approved for a traditional business loan, you may want to consider using a personal loan for business use. By using your personal credit score and assets rather than your business’s, you effectively present an alternative risk profile to skittish lenders. You can then use the personal loan funds on business expenses.
Before pulling up a loan application, you’ll want to know your 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 |
|---|---|---|
Rocket Loans  | Best for fair credit. | Best for fair credit. |
LendingPoint  | Best for fast funding. | Best for fast funding. |
Discover Personal Loans  | Best for flexible terms. | Best for flexible terms. |
Avant  | Best for lower credit scores. | Best for lower credit scores. |
LendingClub Personal Loans  | Best for building credit. | Best for building credit. |
| Show More Options | ||
Prosper  | Best for early repayment. | Best for early repayment. |
Upstart  | Best for borrowers with no credit history. | Best for borrowers with no credit history. |
| Show Fewer Options |
Read more below to learn why we chose these options.
Table of Contents [hide][show]
- 7 Top Personal Loans For Business In 2022
- 1. Rocket Loans: Best For Fair Credit
- 2. LendingPoint: Best For Fast Funding
- 3. Discover Personal Loans: Best For Flexible Terms
- 4. Avant: Best For Lower Credit Scores
- 5. LendingClub Personal Loans: Best For Building Credit
- 6. Prosper: Best For Early Repayment
- 7. Upstart: Best For No Credit Scores
- When Should I Use A Personal Loan For My Business?
- What You Need To Qualify For A Personal Loan
- Personal Loan Terms & Fees
- What To Expect From The Application Process
- Which Personal Loan Lender Is Right For My Business?
- Don't Qualify? What To Do If You Can't Get A Personal Loan For Business
- FAQS About Personal Loans For Business
- The 7 Best Personal Loans For Business
- In Summary: 7 Top Personal Loans For Business In 2022
Table of Contents
- 7 Top Personal Loans For Business In 2022
- When Should I Use A Personal Loan For My Business?
- What You Need To Qualify For A Personal Loan
- Personal Loan Terms & Fees
- What To Expect From The Application Process
- Which Personal Loan Lender Is Right For My Business?
- Don't Qualify? What To Do If You Can't Get A Personal Loan For Business
- FAQS About Personal Loans For Business
- The 7 Best Personal Loans For Business
- In Summary: 7 Top Personal Loans For Business In 2022
7 Top Personal Loans For Business In 2022
Our list of best personal loans for businesses should provide a good starting point for entrepreneurs looking for small loans to help jumpstart their businesses. Our list includes Rocket Loans, LendingPoint, Discover Personal Loans, Avant, Lending Club, Prosper, and Upstart.
1. Rocket Loans: Best For Fair Credit
Rocket Loans |
|---|
Best for fair credit.
Pros
- Suited for startups
- Competitive terms and fees
- Short application process
Cons
- Low borrowing amounts
- Some additional fees
Entrepreneurs with decent credit who need a little extra money to launch their business may want to check out Rocket Loans. With a successful application, you’ll be able to borrow between $2,000 to $45,000, with a respectable term length of three to five years. Rocket Loans work just like traditional installment loans, with monthly fixed payments until you’ve paid off the loan. The one thing to watch out for here is potentially high origination fees, which can cut into the lump sum you receive.
2. LendingPoint: Best For Fast Funding
LendingPoint |
|---|
Best for fast funding.
Pros
- Borrower qualifications are lower than banks
- Suited for startups
- Short application process
- Few extra fees
Cons
- Low borrowing amounts
- Rates can be high
- Not available in West Virginia
If you’re at least 18 years old, have a verifiable bank account, fair credit, and an annual income of $20,000 or more, you may be able to get a personal loan from LendingPoint that you can then use to pay for business expenses. LendingPoint is a little more lax when it comes to credit scores than many of its competitors, approving borrowers with scores as low as 600. The trade-off is slightly more expensive rates than average.
One notable quirk of LendingPoint is that origination fees are added to the amount you borrow rather than subtracted from the amount you receive.
3. Discover Personal Loans: Best For Flexible Terms
Discover Personal Loans |
|---|
Best for flexible terms.
Pros
- Suited for startups
- No prepayment penalties
- No extra fees
Cons
- High credit score requirements
- Rates can be high
- Low borrowing amounts
While Discover is mainly known for being a credit card network, it also offers personal loans. These loans are primarily marketed as a way to pay off debt, but you can also use them to fund a startup business. If you’re a US citizen who is over 18, has a credit score of at least 660, and has a household income of at least $25,000, you can borrow between $2,500 and $35,000. You’ll have three to five years to pay off the loan. Best of all, there’s no origination fee, and you get to choose your term length.
Get Started With Discover Personal Loans
4. Avant: Best For Lower Credit Scores
Avant |
|---|
Best for lower credit scores.
Pros
- Suited for startups
- Fast application process
- Builds personal credit
Cons
- Some additional fees
- Low borrowing amounts
Avant offers secured and unsecured personal loans, the former of which requires a lien on your car. Merchants can borrow between $2,000 and $35,000, with a repayment window of two to five years. Rather than an origination fee, Avant charges a one-time administration fee, which is based on the amount you’re borrowing. Generally speaking, I’d recommend trying to get an unsecured loan, as there don’t appear to be many advantages to the secured loan in terms of interest rates or term lengths.
5. LendingClub Personal Loans: Best For Building Credit
LendingClub Personal Loans |
|---|
Best for building credit.
Pros
- Suited for startups
- Fast application process
- Builds personal credit
Cons
- Rates can be high
- Low borrowing amounts
LendingClub offers regular business loans, but if you haven’t been in business very long, you’re probably better off applying for a personal loan through the lender. LendingClub does not list a minimum personal credit score as a qualification, but you should expect your score to weigh heavily into the application and underwriting processes. You can borrow between $1,000 and $40,000, with a term length of three or five years. Rates can vary quite a bit with LendingClub, so be warned that they can be pretty high for some borrowers.
Get Started With LendingClub Personal Loans
6. Prosper: Best For Early Repayment
Prosper |
|---|
Best for early repayment.
Pros
- Suited for startups
- Fast application process
- No prepayment penalties
Cons
- Some additional fees charged
- Funds can take a while to disburse
- Low borrowing amounts
Prosper offers fixed-term installment loans that can be used for business purposes. Through Prosper, you can borrow between $2,000 and $40,000 with a term length of three or five years. Prosper isn’t the cheapest option on our list, but some entrepreneurs may find it fits their needs. Prosper requires a credit score of 640 to qualify but isn’t as stringent about your income, provided you have a debt-to-income ratio below 50% and three open trades on your credit report.
7. Upstart: Best For No Credit Scores
Upstart |
|---|
Best for no credit scores.
Pros
- Suited for startups
- Fast application process
- Low borrower qualifications
Cons
- Restrictions apply in some states
- Rates can be expensive
- Low borrowing amounts
Upstart is a bit unusual because its lending campaigns primarily focus on young adults with little credit history. Despite this, Upstart’s rates generally align with most of its competitors. Upstart’s underwriting process is flexible, taking into account credit scores when they’re available (you’ll still want to clear 580 if you have a score) and education, credentials, and work experience. You can borrow between $1,000 to $50,000 with Upstart, paid back over a three or five-year term. The minimum borrowing amount may be higher if you live in Massachusetts, Ohio, New Mexico, or Georgia.
When Should I Use A Personal Loan For My Business?
A personal loan for business can be used for any business expense, including purchasing inventory or supplies, covering operating expenses, or funding an expansion. If your business is new or hasn’t even opened its doors, a personal loan can be used to fund your startup costs.
When You Can’t Qualify For A Business Loan
With so many business loan options on the market, though, why should you choose a personal loan? The reason is simple: qualifying for a business loan is difficult for many business owners. A lender evaluates your personal and business credit history. Your time in business, annual revenue, and other factors are also considered for approval. For some businesses, this can pose a challenge.
A personal loan for business purposes and 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 and business revenues will not be a consideration for loan approval.
When You Can Get Better Financing Options
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 with business loans.
What You Need To Qualify For A Personal Loan
| Proof Of US Citizenship | 18+ Years Old | Minimum Credit Score | |
|---|---|---|---|
| Upstart | 580 | ||
| LendingPoint | 600 | ||
| Prosper | 640 | ||
| Avant | 580 | ||
| Discover | 660 | ||
| LendingClub | N/A (may need co-signer) | ||
| Rocket Loans | 640 |
Requirements (such as credit score) to qualify for a personal loan vary somewhat, depending on the lender. However, for most personal loans, there are a few general requirements. The borrower must be a citizen or permanent resident of the United States. All borrowers must be at least 18 years old.
Credit Score Requirements
A credit score of at least 600 is required to qualify for most personal loans. While some lenders have lower credit requirements, these options typically have much higher rates and fees.
Personal Credit History
In addition to your credit score, lenders will also review your personal credit history. Some lenders will reject your loan application if you have recent bankruptcies, collections, or other negative items on your credit report.
Verifiable Income
An additional requirement is a verifiable income. Lenders will also make sure that you can afford the loan by calculating your DTI ratio. This ratio shows the relationship between your debt and your income. Lenders use this to gauge how much of a risk you are and whether you can afford a new loan payment. A good DTI is 36% or less, although some lenders will approve loans for borrowers with a higher DTI.
Personal Loan Terms & Fees
| Borrowing Amount | Term Length | Origination Fee | APR | |
|---|---|---|---|---|
| Upstart | $1,000-$50,000 | 3 or 5 years | 0%-8% | 6.76%-35.99% |
| LendingPoint | $2,000-$25,000 | 24-48 months | 0%-6% | 9.99%-35.99% |
| Prosper | $2,000-$40,000 | 3 or 5 years | 2.41%-5% | 7.95%-35.99% |
| Avant | $2,000-$35,000 | 2 to 4 years | 0.95%-4.75% (administration fee) | 9.95%-35.99% |
| Discover | $2,500-$35,000 | 3 to 7 years | None | 6.99%-24.99% |
| LendingClub | $1,000-$40,000 | 3 or 5 years | 1%-6% | 6.95%-35.89% |
| Rocket Loans | $2,000-$45,000 | 3 or 5 years | 1%-6% | 5.983%-29.99% |
Like borrower requirements, the terms and fees of personal loans vary by lender. Most personal loans have repayment terms of two years, but longer terms are available from select lenders. Interest rates are based on your creditworthiness. The lowest interest rates and best terms are typically reserved for borrowers with personal credit scores of at least in the high 600s. Personal loan APRs generally start around 5% and top out around 36%.
Lenders may also charge various fees that are added to the cost of the loan. Though these fees vary, some common fees associated with personal loans include:
- Origination fees
- Application fees
- Prepayment fees
- Credit Insurance fees
What To Expect From The Application Process
The internet has made applying for a personal loan easier than ever. To get started, visit the website of your preferred lender. You’ll be required to input some basic information, such as your name, Social Security Number, and annual income information. With some lenders, this is enough to receive a preapproved offer, which we’ll discuss in more detail in the next section.
Documentation Needed
Additional information and documentation are needed as you move through the application process. This includes:
- Bank statements
- Income tax returns
- Credit report and score
- Copy of driver’s license
- Proof of income
- Proof of address
For some lenders, this information is all you need for loan approval. Others may require further information or documentation during the underwriting process. Make sure you include accurate contact information on your application and make yourself available to the lender as needed.
How Long Does The Process Take?
Some lenders are able to approve your loan instantly and transfer funds to your account as soon as the next business day. Other lenders need additional time to review your information. From application to funding, here’s how long you should expect the process to take.
- Prosper: Three to five business days
- RocketLoans: One to three business days
- LendingPoint: One to two business days
- Avant: One to two business days
- Discover: One to two business days
- Lending Club: About a week
- Upstart: Generally less than a week
Which Personal Loan Lender Is Right For My Business?
Many lenders offer prequalification tools that you can use to get preapproved and find out your rates and terms. This is a great way to shop around for the most affordable loan.
A Lender Who Will Approve You
You also need to do your research to make sure you only apply for loans that you’re qualified to receive. For example, if a lender requires a credit score of 700 but your score is 660, you’ll need to seek other options. We make finding a loan easy by doing the research for you. Check out our full reviews of business loan providers to find the best lenders for personal loans that can work with your financial situation.
A Lender Who Offers Enough Funds
Also, take into consideration the amount of money you need. If a personal lender offers up to $20,000, but you need more money, mark that lender off your list and look for options that best fit your financial needs.
Don't Qualify? What To Do If You Can't Get A Personal Loan For Business
You shopped around, and maybe you even applied for a loan, but you don’t qualify. Does this mean that you have to explore other options? Not necessarily.
Co-Signer For Your Personal Loan
One option to qualify for a personal loan is to get a co-signer. A co-signer is someone with a high credit score that is qualified to receive the loan. A co-signer agrees to be held responsible for the loan, which lessens the risk for the lender. If you default on the loan, the co-signer will also be liable for the debt, so as with any other financing, make sure you pay your loan as agreed.
Secured Personal Loan
If you don’t have a co-signer, you may be able to qualify for a personal loan with collateral. With a secured personal loan, a lender gives you a lump sum of money backed by an asset (anything of value, such as a vehicle, real estate, or equipment). If you default on the loan, the lender has the right to seize the asset.
Repairing Your Credit Score
If your credit score is holding you back from a personal loan, learn how long it takes to improve your credit score. Check your score on free credit score websites, review your credit report for errors, and take a few steps to boost your score. Improving your credit will not only help you qualify for more financing options, but you’ll also receive lower rates and better terms. If you need personal credit scores explained in further detail, we can help with that.
Personal Or Business Credit Cards
If you need financing immediately and don’t have time to work on your credit, you may qualify for a personal or business credit card. There are multiple options if you have good credit, but unsecured cards are also available for borrowers with fair credit scores. If your credit is bad, you may qualify for a secured card. A secured card is backed with a cash deposit. As you use your card and pay it off on time, you can qualify for a higher credit limit, unsecured cards, and other financing options.
FAQS About Personal Loans For Business
The 7 Best Personal Loans For Business
If getting a business loan has been a challenge, a personal loan or 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.
In Summary: 7 Top Personal Loans For Business In 2022
- Rocket Loans: Best for fair credit.
- LendingPoint: Best for fast funding.
- Discover Personal Loans: Best for flexible terms.
- Avant: Best for lower credit scores.
- LendingClub Personal Loans: Best for building credit.
- Prosper: Best for early repayment.
- Upstart: Best for borrowers with no credit history.
Chris Motola
Expert Analyst & Reviewer at Merchant Maverick
An expert in personal and business loans and financial health, Chris Motola has been writing about small business finance and payments for over 5 years. He has been cited in various industry publications, including Forbes Advisor, GoBankingRates, and Medium. Chris is a graduate of the University of Central Florida.
View Chris Motola's professional experience on LinkedIn.
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