Best Personal Business Loans 2022

Sometimes, for one reason or another, you can’t (or don’t want to) get a business loan for your small business. You still need working capital, though.

Enter personal loans. Sure, they may not have been designed specifically for businesses―but in many cases, you can use a personal loan to finance your business. You might even find it easier to qualify for a personal loan than a business loan.

In this article, we’ll tell you about the best personal lenders for business and help you find the right lender for your business needs. For most business owners, that lender will be Avant―but let’s look at all your options.

In many cases, a personal loan won’t be your first choice for business funding. But sometimes, personal lenders offer a good alternative to business lenders.

For example, if you have a brand-new business, you may have a hard time qualifying for business loans. Yes, you can always try to get a startup loan, but even startup business loans usually require your business to be at least a few months old. So if you’re just getting your business set up, a personal loan might be your best option as a borrower. 

Likewise, if you want the flexibility to use your loan for both personal and business needs, you’ll need a personal loan. You can’t use business loans for personal expenses.

Put simply, you can absolutely fund your business with a personal loan. But before you take the next steps to becoming a borrower, make sure you understand how business loans and personal loans differ. (Our FAQ below can help.)

Avant is our favorite personal lender overall—and it has a big advantage that sets it apart from other personal lenders: it offers both unsecured and secured personal loans.

As you may recall, the difference between those two types of loans comes down to collateral. You need collateral to get a secured loan, but an unsecured loan doesn’t require any (it may still require a personal guarantee though). Many people prefer unsecured loans because they won’t want to offer anything up as collateral. But secured business loans and personal loans, thanks to their collateral, often offer lower interest rates.

And that’s exactly the case with Avant. It offers you the chance to secure your term loan with your car. In return, you’ll likely get lower interest rates and longer repayment terms. Of course, your exact rates and terms will still depend on a number of factors, but it’s a good way to qualify for a lower rate than you otherwise would.

So if you’ve got a car and you’re willing to offer it as collateral, Avant’s secured loans might offer a simple way to lower your interest rate.

There’s a lot to like about Upstart, and we’re not the only ones to think so: Upstart has the best customer reviews of the lenders on this list.

Upstart has a 4.9 out of 5 on Trustpilot, giving it an excellent score.¹ That’s not from a handful of customers, either― 32,000 people have reviewed Upstart, with 97% of them giving it an excellent score.

What do these rave reviews say? Well, they praise a lot of the things you’d expect: fast approval and funding, helpful customer service, and fair pricing. (We saw many reviews praising Upstart’s competitive rates and fees.) In other words, people like pretty much everything about Upstart―even though it doesn’t have the lowest rates or the biggest loans.

If you’re looking for a tried-and-true lender for your personal loan that also happens to have a super low credit score requirement, then give Upstart a try. See our full review here.

Rocket Loans offers pretty competitive interest rates. No, it doesn’t offer the lowest possible APR (annual percentage rate) out there. But its starting APR is still well within the range we like to see, and its maximum APR is lower than half the lenders on this list.

Throw in its fast funding turnaround (the same day if you complete the process by 1 p.m. ET), flexible loan amounts (from very small to moderately sized), and above-average customer reviews, and you can see why Rocket Loans is one of our favorites.

That’s not to say it’s the best in every category. Again, it doesn’t have the lowest possible rates or the biggest loan amounts. If those things matter to you, you may want to look at one of the other lenders we recommend.

Even so, Rocket Loans offers plenty of advantages―making it one of our favorite lenders for personal loans.

It’s not hard to see why we recommend LightStream―at least, once you take a look at its interest rates.

APR at LightStream starts under 4%. That’s thanks in part to low interest rates and in part to a complete lack of fees. Unlike other lenders on this list, LightStream doesn’t charge any kind of administrative or origination fee on its loans. So you can get rock-bottom rates from LightStream.

That’s not the only advantage to LightStream, either. It also offers large personal loans, with amounts up to twice as big as the loans from other lenders. It’s got long terms too, offering you up to 20 years to pay. Of course, with those big perks comes a big drawback. LightStream has the highest credit requirements of the lenders here. It asks for at least a “good” credit score―which translates to something above 670.

Still, if you can meet those strict credit requirements, LightStream’s low APR makes it an excellent, low-cost option for personal loans.

A personal loan may not be the right solution for every small-business owner, but it can be a good financing option―especially if you have a young business or haven’t built up business credit yet.

We think that most business owners will like Avant the best, as it offers both secured and unsecured loan options. If you want to go with a lender with phenomenal customer reviews, we recommend Upstart. Business owners interested in fast funding will want to stick with Rocket Loans. And if you’re on the search for the lowest possible rates, LightStream is the lender for you.

Not sure you want to get a personal loan for your business? Learn more about other small-business funding options.

It can be easier to get a personal loan than a business loan. Mostly, that’s because many business lenders want your business to have been in operation for a certain length of time, while a personal lender doesn’t care about how long your business has been around.

Likewise, business lenders often have high revenue requirements. Personal lenders have income requirements, sure, but they don’t care about your business’s revenue specifically.

And as you can probably guess, a business lender usually wants to see a good business credit score as part of your application. A personal lender shouldn't ask about your business credit.

That said, some personal lenders have higher personal credit requirements than some business lenders. For example, most of the lenders on this list generally want to see a personal credit score in the 600s. In comparison, the best business lenders for bad credit accept credit scores in the 500s.

So really, it depends on the specific lender you’re applying with.

Business loans and personal loans have a few key differences you should understand. These differences can help you figure out which type of loan is the better financing option for you and your business.

As we said, a business loan must be used for business purposes. A personal loan, on the other hand, can be used for both personal and business needs.

The loan application process can be different too. Both personal and business lenders look at your personal credit score. But business lenders will often look at your business credit and your business’ revenue too. Personal lenders, though, will focus on your personal income.

And from a practical standpoint, funding from a business loan goes into a business bank account, while financing from a personal loan goes into a personal bank account.

Plus, as a general rule, business loans usually come in larger loan amounts than personal loans (though your specific loan amount will depend on things like your personal credit, business credit, revenue, and more).

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.