Best Personal Loans for Businesses

Contributor, Benzinga

It takes money to make money. And if you need funds to make your business plan a reality, a personal loan can close the gap. Start with Benzinga’s review of the best personal loans for business.

Best Personal Loans for Business

Because personal loans are exactly as they sound — a chunk of cash lent on credit to use for whatever you like — the money can serve many purposes. This includes quick cash to get your business off the ground, buy needed supplies or spruce up your work-from-home space. 

Read on to learn more about the best lenders and loan comparison services for personal loans.

APR
Fixed 5.99% – 24.99%.
Loan Amounts
$5,000 – $40,000
APR

Fixed 5.99% – 24.99%.

Origination Fee

0%–5% of the loan amount

Term Lengths

2–5 years

Min Credit Score

550

1 Minute Review

Happy Money offers personal loans that allow you to more efficiently consolidate high interest payments. Happy Money was previously known as Payoff. The company was founded in 2009 and has since helped fund over $3.5 billion in loans. Happy Money is a financial company that works with approved lending partners to fund loans. Happy Money designed its Payoff Loans to provide borrowers with the financial freedom and power to be matched with a lending partner. Benzinga reviews Happy Money Loans as a way for people to consolidate debt with potentially lower APR rates. 

Best For
  • People with lower credit scores
  • Credit card debt consolidation
Pros
  • No prepayment fees
  • Potentially lower APR rates starting around 5.99%
  • Improve credit score
Cons
  • Personal loans only available for credit card debt
pre-apply securely through Figure Personal Loans’s website
APR
Between 5.99% and 15%; autopay discount of 0.25%
Loan Amounts
$5,000 – $50,000
APR

Between 5.99% and 15%; autopay discount of 0.25%

Origination Fee

Between 0% and 5% (dependent on state and local laws)

Term Lengths

Fixed-rate loan terms of 3 or 5 years

Min Credit Score

680

1 Minute Review

Figure’s online personal loan application process eliminates the painstaking process of following up your paperwork to scan or send to the lender. With an entirely online application, you can get your prequalification rate without impacting your credit score. You’ll get approval within a few minutes and await funding in as little as 2 business days — up to $50,000 you can direct toward what matters most.

Figure personal loans come with multiple fixed term options so you can map out your payment schedule so that it doesn’t strain your finances. Figure also offers some perks for spreading the word out to others. You’ll receive a $150 gift card for every friend you refer, and they too will get a $150 gift card when their loan funds.

Figure’s home equity line of credit lets you turn your home equity into up to $250,000 cash in as few as 5 days. Rates start as low as 2.88% APR1, and you can choose among 5-, 10-, 15- and 30-year fixed term options. You can also get up to $500,000 cash-out in mortgage refinance, all with custom rate and payment options.

While you can easily land better rates with a higher credit score, Figure also has options for applicants with less than perfect credit. You may secure a HELOC with a credit score as low as 620 (except in Oklahoma where the minimum is 720).

Best For
  • Online loan application
  • Unsecured loans
  • Affordable loan fees
Pros
  • 100% online application
  • Quick funding
  • Competitive rates
  • Stellar customer service
  • Multiple fixed term loan options
  • A gift card for every referral (personal loan only)
  • Personal loan offered in all 50 states
Cons
  • Products not available in some states
  • Personal loans capped to $50,000
get started securely through SoFi’s website
Disclosure: Fixed rates from 6.99% APR to 21.78% APR. APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 3/24/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
APR
9.95%-35.99%
Loan Amounts
$2,000-$35,000
APR

9.95%-35.99%

Origination Fee

Up to 4.75%

Term Lengths

24-60 months.

Min Credit Score

580

1 Minute Review

Established in 2012, Chicago-based Avant helps people obtain personal loans while offering transparent credit. Since its inception, Avant has helped over 1.5 million people receive funding. 

One thing that makes Avant so unique is its background as a financial technology company instead of a traditional bank. Banking needs are addressed by Evolve Bank & Trust, a member of the Federal Deposit Insurance Corp. (FDIC). The FDIC insures deposits and protects consumers in case of bank disasters. Benzinga’s review of Avant determined it is a strong option for personal loans because of its reputation for positive customer experiences and fast funding options. 

Best For
  • People with below-average credit scores who need unsecured personal loans
  • People who need fast funding
Pros
  • Quick funding
  • Fixed payments
  • Mobile accessibility
Cons
  • Additional costs such as origination fees
  • No third-party guarantor such as a co-signer on a secured personal loan
Disclosure: *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.
APR
3.49%- 19.99%
Loan Amounts
$5,000 – $100,000
APR

3.49%- 19.99%

Origination Fee

$0

Term Lengths

Up to 240 months

Min Credit Score

660

1 Minute Review

LightStream was founded by its parent company Truist Financial. The company offers a wide range of traditional and innovative personal loan benefits and opportunities such as home improvement loans and fertility financing to address a wide range of needs. The company charges APRs between 3.49% and 19.99%. Benzinga offers a review of LightStream’s personal loan options that provide a variety of personal loans while minimizing additional fees and promoting financial flexibility. The company offers diverse loans with varying term lengths, APRs, and uses. For example, Lightstream offers a variety of home improvement loans that are designed to assist with specific needs such as funding for landscaping or solar panels.

Best For
  • Potential borrowers interested in quickly funded unsecured personal loans
  • Same day funds
  • People with stronger credit scores
Pros
  • Doesn’t require collateral
  • No late fees
  • Potential same day funding
  • Self-selected funding dates
  • Offers a mobile application to ease access to loan information
Cons
  • Not recommended for bad credit scores

Types of Personal Loans for Business

There are many things that define a personal loan. What you’re offered and what you choose depends on your unique situation. A loan comparison service like Credible is a way you can compare all your options. 

Most personal loans are general use, but some may require you to disclose your intended use or offer different loan conditions for different uses. The conditions of a loan also depend on the circumstances. Your unique financial snapshot (including your credit) and the way a lender analyzes it determines if you are offered a secured, unsecured, fixed or variable rate loan. 

Secured Loans

If a lender asks that you put up collateral to back a loan, you’re being offered a secured loan. These types of loans pose less risk to the lender, as an asset like your house or bank account balance may be used to secure the loan. 

Something concerning on your credit report may cause a lender to ask you for collateral. This means while there is less risk to the lender, you’re taking on more personal risk. Be sure you are able to meet the terms of the loan so you don’t risk your assets or your credit.

Unsecured Loans

An unsecured personal loan doesn’t require collateral to back the loan. While you may get a higher loan approval amount with a secured loan, these are perfect if you don’t have assets to put up as collateral. 

BadCreditLoans.com offers general personal and business loans up to $10,000. This service connects you with lenders providing unsecured loans who are willing to work with bruised credit. 

These loans can also be used to build credit if you’re a young entrepreneur just starting out. Pay back the small loans within the terms to establish creditworthiness to lenders. This will position you as a business owner who lenders will trust with the necessary capital in the future.

If you’re a sole proprietor, you might choose a platform like MoneyLion to obtain a small loan that will help you keep your business going.

Fixed-Rate Loans vs Variable-Rate Loans

Although many lenders offer both options, fixed-rate loans are preferable to most — you know exactly what you’re getting into financially. A fixed rate allows you to calculate how much interest you’ll pay overall. But these rates may be higher or come with larger monthly payment plans, which can be troublesome if all your money is tied up in your business while you’re working toward a profit.

The higher rates and larger monthly payments reduce a lender’s risk while ensuring the loan is profitable for them. The only other downside is that your loan rate doesn’t go down if interest rates fall, but this is usually outweighed by the rest of the advantages.

A variable rate loan may offer some perks to consider. Although the interest rate may leave you owing more than the loan itself was worth, you might have to use a variable rate loan if you can’t get approved for a fixed-rate loan or need low monthly payments and a lower rate to save on cash now. 

If you think that you’ll see a worthwhile return from using a variable-rate personal loan to invest in your business, this can still be a savvy financial move.

Personal Loan Requirements and Criteria

Although these criteria vary by lender, most personal loans approval decisions depend on the following:

  • Your FICO credit score
  • Debt-to-income ratio
  • Delinquencies or negative remarks on your credit report
  • Credit utilization (your credit balance vs. your credit limit)
  • Open accounts with a positive standing (payments being made on time and so forth)

Other considerations may be made depending on your unique situation. 

Personal Loan Considerations

Although a personal loan may have looser usage restrictions than other types of loans, it’s still a serious financial obligation. Be sure you are clear on your loan terms before you sign for a loan. Following them to the letter is important to keep your credit history spot-free, an important quality if you’ll need further credit in the future. 

Look out for sketchy-looking lenders or loans, especially online. It’s best practice to go through trusted lenders. If it seems too good to be true, it probably is. Loan comparison services like Even work with vetted lenders to make your search less risky.

You can also use the Lender Match service provided by the Small Business Administration (SBA). Its loan match service will connect you with vetted lenders who offer low rates and meet certain SBA guidelines meant to protect both borrowers and lenders. 

Personal Loans vs. Credit Cards

While many businesses use business credit cards for day-to-day spending, a personal loan can be more beneficial in certain situations.

Each a line of credit, credit cards have revolving balances while a personal loan closes once it’s paid off. A personal loan is great for a large, 1-time purchase that you can pay off in installments like renovations or pricey commercial equipment. You can streamline your business-related debt payments by consolidating them with a low-rate personal loan through a service like Payoff.

Credit cards usually have variable rates while personal loans have fixed rates. Personal loans may have higher credit limits than credit cards. Credit cards can cover smaller or recurring purchases that you can pay off at your discretion.

Fund Your Business Now

Financing your business with a personal loan may be the right funding solution for you. Check out your options using a loan comparison service like Credible or connect with 1 of our recommended lenders to find the right personal loan for business today.