Best Personal Loans for Business

These personal loans provide an alternative to hard-to-get business loans.
Best Overall
Rocket Loans
Rocket Loans
  • Icon Pros  Dark
    Lowest credit requirements
  • Icon Pros  Dark
    Flexible loan amounts
Best Customer Reviews
Upstart
Upstart
  • Icon Pros  Dark
    Excellent customer reviews
  • Icon Pros  Dark
    Competitive APR
Best for Secured Loans
Avant
Avant
  • Icon Pros  Dark
    Both secured and unsecured loans
  • Icon Pros  Dark
    Lower credit requirements
Best for Low Rates
Light Stream
LightStream
  • Icon Pros  Dark
    Lowest starting rates
  • Icon Pros  Dark
    No loan fees

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.

Info
Personal loans for business uses
Not all personal lenders let you use personal loans on your business. (See the FAQs below for more information.) We’re including only lenders that allow business uses in our rankings.

Best personal loans for small businesses

Compare the best personal loans for business

Brand
Loan min./max.
APR min./max.
Min. credit requirement
Get a Loan

Rocket Loans

$2,000/$45,000

7.16%/29.99%

540

Upstart

$1,000/$50,000

7.98%/35.99%

580

Avant

$2,000/$35,000

9.95%/35.99%

600

LightStream

$5,000/$100,000

3.49%/20.49%

“Good”

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Info
What types of savings accounts?
As you can see, we’re including both standard business savings accounts as well as money market savings accounts―anything offering an APY over 0.5%. (If you need a refresher on the differences between those kinds of accounts, check out our primer on the types of business savings accounts.)

Rocket Loans: Best overall

Rocket Loans is our favorite personal lender overall. A few things make it stand out.

Its low credit requirements, for example. Rocket Loans is the only lender on this list that will accept a credit score in the 500s (squarely in the “poor” range for a FICO credit score). That makes it accessible to more people, which we like.

Plus, 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.

Rocket Loans personal loan details

Repayment term
Payment schedule
Funding turnaround
Origination fee
Get a Loan

36–60 mos.

Monthly

As fast as same-day

1%–6%

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Throw in flexible loan amounts (from very small to moderately sized), fast funding turnaround, and above-average customer reviews, and you can see why Rocket Loans ranks so highly on our list.

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 below.

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

Upstart: Best customer reviews

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―almost 6,000 people have reviewed Upstart, with 96% of them giving it an excellent score.

Upstart personal loan details

Repayment term
Payment schedule
Funding turnaround
Origination fee
Get a Loan

3 or 5 years

Monthly

As fast as next-day

0%–8%

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

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, biggest loans, or lowest credit requirements.

If you’re looking for a tried-and-true lender for your personal loan, then give Upstart a try.

Avant: Best for secured loans

Avant 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.

Avant personal loan details

Repayment term
Payment schedule
Funding turnaround
Origination fee
Get a Loan

24–60 mos.

Monthly

As fast as next-day

Up to 4.75%

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

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.

Grow your business today

Browse hundreds of loan options, custom-tailored to your business and budget needs, from a single, simple platform.

Data effective 05/25/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

LightStream: Best for low rates

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 3%. 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.

LightStream personal loan details

Repayment term
Payment schedule
Funding turnaround
Origination fee
Get a Loan

24–144 mos.

Monthly

As fast as same-day

N/A

Data effective 11/21/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

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 12 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.

Using a personal loan for business

Now that you know where to get a personal loan for business uses, let’s talk about the logistics for a minute.

When to get a personal loan for business needs

In many cases, a personal loan won’t be your first choice for business financing. 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.

How a business loan compares to a personal loan

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.

Business loans vs. personal loans
Feature
Business loan
Personal loan

Acceptable uses

Business expenses

$25,000

Loan amount

Often higher

Often lower

Personal credit check

Business credit check

Sometimes

Financial check

Business revenue

Personal Income

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’s 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).

FAQs about personal loans for business

What is a personal business loan?

A personal business loan is just another way of describing a personal loan that you use for business reasons.

Can I use a personal loan for business expenses?

Yes, in many cases you can use a personal loan for business.

A few lenders have strict restrictions on what their loans can be used for, so you should double-check with your lender to make sure it doesn’t mind. But many personal lenders accept and even encourage applications from business owners.

Pin
Personal loans only
SoFi and Payoff are two popular personal lenders that explicitly don’t allow you to use your funds for business reasons. And while Prosper doesn’t explicitly disallow business uses, it now redirects all business customers to OnDeck.

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

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.

The takeaway

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.

Just make sure you’re borrowing from a personal lender that doesn’t mind letting you use your personal loan for business expenses (like the lenders above).

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

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.

Sources
1. Trustpilot, “Upstart.” Accessed November 21, 2020.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
Recent Articles
A young Asian businesswoman draws on a tablet while sitting in front of a desktop computer
9 Best Checking Accounts for Freelancers 2021
Best overall Lili Free sub-accounts No-fee checking Visit SiteLearn More Best interest-bearing BlueVine Interest-bearing checking...
Best Cannabis Dispensary POS 2021
Operating a cannabis dispensary is tricky because of legal regulations and restrictions. Our top picks...
The 9 Best Virtual and Outsourced Accounting Services for Small Businesses in 2021
We considered bookkeeping features, payroll and tax add-ons, integrations and software, and price to bring...
A Black businesswoman shows a financial form to a Black man and white woman
Chase vs. Bank of America: Business Banking Compared
Best for rewards Bank of America 2.6 Rewards program for small businesses Availability in 37...