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Best Personal Business Loans

February 2024

Personal loans can provide a fast and easy financing solution if you're a small business owner or an entrepreneur looking and traditional business loans are not working out for you. Discover who are the best lenders for personal business loans.
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It can be a real challenge for small businesses and startups to get a business loan. Many lenders will only consider established companies with plenty of assets on their balance sheets. A personal business loan may be an option worth considering because personal loan lenders care more about your credit history and income than how many years you have been in business or what your annual revenue is.
Here is our list of the best personal loans for small businesses.


SuperMoney's list of the top-rated personal business loans is based on the qualitative recommendations of our community members and the quantitative recommendations of our ranking algorithms. We focused on lenders that provide large loan amounts, low interest rates, and long terms.

Common Questions About Personal Business Loans

Can I get a personal loan for a business?

Yes, absolutely. One of the big advantages of personal loans is you can use them for practically anything, including starting a business. However, some lenders will charge different rates depending on the purpose of the loan.

Which bank gives the best personal loans for business?

It all depends on who is asking. Banks like Wells Fargo, Bank of America, and JP Morgan Chase all provide competitive rates and terms on business loans but are typically hard to qualify for. If you're reading this article, you are probably looking for an alternative source of funding. The lenders in the list above allow you to use a personal loan to finance your business expenses.

Is it better to get a personal loan or a business loan?

It depends on your circumstances. All things being equal, it is best to get a traditional business loan because they typically have lower interest rates and better terms. They also limit your personal liability if you can't make payments and help separate your business and personal finances when it comes to filing taxes. However, most lenders will only offer their top rates to successful companies with plenty of assets and substantial revenue. If you own a new business or you have already maxed out the credit you can get in your business's name, a personal loan may be your best option.

What do the best lenders look at when considering business personal loan?

Lenders focus on the four Cs of credit, capacity, collateral, capital, and character. If you or your business is lacking in any of those areas you may struggle to get a loan.
  • Your capacity is usually measured by your (or your business's) debt-to-income ratio.
  • Collateral refers to what assets you own that a lender could seize to cover their losses if you can't repay the loan.
  • Capital is the amount of money you or your company can access. If your business doesn't have much capital to work with, the lender may consider you too high a risk.
  • Character is related to the reputation and history of your company. When you use a personal loan, your credit history is usually the main basis for your "character."

Is it easier to get a personal or business loan?

Typically, personal loans are much easier to get than business loans. In general, business leaders have more stringent eligibility requirements than consumer loan providers. An additional benefit of choosing a personal loan for business is that personal loans are generally unsecured, so you won't have to provide collateral to get the loan.

What is a personal business loan?

A personal loan is cash you borrow from a credit union, bank, or online direct lender. They, typically, can be used to finance anything, which includes funding a business. They are sometimes called signature loans because they don't require any collateral other than the signature of the borrower. Terms usually range from 12 to 60 months, although shorter and longer terms are available.

Can I use a personal loan to buy a business?

Yes, you can use a personal loan for practically anything. That is the beauty of personal loans. However, established businesses are usually worth more than what you can borrow with a personal loan. One rule of thumb used to value small businesses is to multiply the annual revenue of the company by two or three. So a company that brings in $75,000 a year would be worth $150,000 to $225,000. Most personal loans have maximum loan amounts of $40,000 or less. Some lenders offer up to $100,000, but typically the maximum loan amounts are only available to the high-income earners with super-prime credit.

What are the best personal business loan rates?

The rates for personal loans vary widely depending on the borrower. The best personal loans for small businesses typically have rates that range from 5% to 36% APR. Only superprime borrowers with high incomes (or who have superprime cosigners) will qualify for the lowest rates.

What are the pros and cons of using a personal loan to start a business?

Here are the main benefits and disadvantages of financing your business with a personal loan.

Advantages of personal loans

  • Lower APR than a business credit card. This isn't always the case, as personal loans can have three-figure interest rates, but if you have good credit you can save money.
  • Easier to apply. Business loans usually require more paperwork.
  • Fewer restrictions. You can use the money for any business expense, such as payroll, market, and inventory; or even use some of the money for personal stuff.

Drawbacks of using personal loans for business loans

  • Smaller loan amounts. You may need more money than what personal loan providers are willing to lend.
  • Personal liability. Your personal assets may be at risk if you use your house or mortgage as security.
  • No tax benefits. You can't claim tax credits on personal loans like you sometimes can with a business loan.

What alternatives are there to personal loans for small businesses?

A personal loan is a valid option for financing business expenses, but it comes with its fair share of drawbacks. Other alternatives to a business loan include:
  • Grants. There are state and local government agencies that offer grants to small businesses.
  • Credit cards. Remember that in most cases the owner of a small business will be personally liable for credit card debt even if it's on a business credit card.
  • A line of credit. These are similar to credit cards and are often used by small businesses as bridge loans to cover cash-flow gaps.
  • Merchant cash advances. If your business often gets paid by credit or debit card you may be able to get an advance on future sales. Although they are easier to get than regular business loans, they are also much more expensive.

How do I apply for a personal loan for my business?

The exact process varies depending on the lender and your financial circumstances. However, applying for a personal loan for business use typically includes the following steps:
  • Check your credit report (business and personal) and fix any errors that may be hurting your score.
  • Decide how much money you need to borrow for your business. If you're not sure, a line of credit may be worth considering.
  • Research which lenders provide the best rates and terms for your credit profile. The list above is a great place to start.
  • Prequalify for at least three loans to see which offers the best deal.
  • Complete and submit the application form with the lender you choose. Most lenders take two to five business days to fund a loan once the application is approved.
SuperMoney's loan offer engine allows you to prequalify with multiple lenders without hurting your credit score.

About the Author

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SuperMoney is the most comprehensive financial services comparison site around. We have published hundreds of personal finance articles and provide detailed reviews on thousands of financial products and services. Our unbiased advice and free comparison tools help consumers make smart financial decisions based on hard data, not marketing gimmicks.

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