Business Loans for LLCs: How to Qualify and What to Expect

LLCs are the most common borrower — and the easiest to fund

More than half of small business funding applications come from LLCs. Funders like the structure: there is a clear legal entity, an EIN, and (usually) a dedicated business bank account. If your LLC has 3+ months of deposits, you can access every product in the market.

What an LLC needs to apply

• EIN (Employer Identification Number) from the IRS.
• Articles of organization or certificate of formation from your state.
• Business bank account in the LLC’s name with 3+ months of history.
• Owners with combined 51%+ ownership on the application.
• Each 20%+ owner provides ID and consents to a soft credit check.

Does an LLC protect me from business debt?

Partially. The LLC protects your personal assets from lawsuits and most business liabilities. But nearly every small business loan, line, and advance under about $500,000 requires a personal guarantee from owners. If the business cannot repay, the lender can pursue you personally. The exceptions are invoice factoring (recourse falls on your customers’ invoices) and some equipment deals secured fully by the asset.

Merchant cash advances technically do not require a personal guarantee of repayment, but they do include a “performance guarantee” — you promise not to switch bank accounts, block payments, or shut the business down to avoid remittances.

Single-member vs. multi-member LLCs

Single-member LLCs are underwritten almost exactly like sole proprietorships: your personal credit is the tiebreaker, your bank deposits are the decision. Multi-member LLCs need every owner above 20% on the application. If a partner has poor credit, some funders let the stronger-credit partner be the primary applicant as long as combined ownership on the application exceeds 51%.

Do I need business credit?

Not for revenue-based financing, MCAs, or most online lines of credit. Business credit scores (PAYDEX, Intelliscore) matter for bank term loans, SBA loans, and vendor trade lines. Building it is still worth doing: see our guide to building business credit.

Best products for LLCs by stage

• 3–6 months old: revenue-based financing, MCA, equipment financing.
• 6–12 months: add short-term loans and starter lines of credit.
• 1–2 years: full lines of credit, online term loans, larger equipment deals.
• 2+ years and profitable: bank term loans, SBA 7(a), commercial real estate.