Can I Get a Business Loan with an LLC?
- William Mingione
- Dec 19, 2025
- 7 min read
Yes, you can absolutely get a business loan with an LLC. In fact, operating as a limited liability company can strengthen your loan application by demonstrating business legitimacy and legal separation from personal finances. According to the Federal Reserve's 2023 Small Business Credit Survey, 60 percent of applicants with $1 million to $10 million in annual revenue were fully approved for financing Yahoo Finance, with LLCs representing a significant portion of successful applicants.
Understanding how your LLC structure affects loan eligibility and what lenders look for can significantly improve your approval odds. This guide breaks down everything LLC owners need to know about securing business financing in 2025.
Key Takeaways
LLCs can access multiple loan types including SBA loans, term loans, lines of credit, and equipment financing
Lenders evaluate both business and personal credit, especially for newer LLCs
According to the FDIC's 2024 Small Business Lending Survey, 39% of banks can approve small loans within one business day
Required documentation includes articles of organization, EIN, financial statements, and tax returns
Building business credit early improves loan terms and approval rates
DirectLend AI's AI-powered matching connects LLCs with verified lenders based on specific business data
Table of Contents
Understanding LLCs and Business Loans
What is an LLC?
A limited liability company (LLC) is a business structure combining corporate liability protection with partnership taxation flexibility. Members enjoy protection for personal assets while maintaining operational simplicity. This structure offers credibility that sole proprietorships lack, making LLCs more attractive to lenders.
Why Lenders Favor LLCs
Lenders view LLCs positively because the formal structure demonstrates commitment and professionalism. The legal separation between business and personal finances also protects lenders' interests. According to SBA loan program data, in 2024, the SBA approved over 70,000 loans totaling $31.1 billion, with LLCs comprising a substantial portion of recipients.
How LLCs Impact Loan Eligibility
Operating as an LLC affects your loan application differently than sole proprietorships or partnerships. While the LLC structure provides liability protection, lenders still evaluate both business and personal creditworthiness.
Credit Evaluation for LLCs
For established LLCs with strong business credit, lenders may rely primarily on business financials. However, for newer LLCs or those with limited credit history, personal credit becomes crucial. According to business lending data, the average FICO score for business owners is 721, significantly above the national average of 673, giving them an advantage in loan applications.
Business Age Matters
The Federal Reserve's Small Business Credit Survey reveals that 64 percent of employer businesses that were fully approved for loans had over 20 years in business, while businesses with five years or less had 48 percent approval rate . Newer LLCs should focus on building business credit quickly and maintaining strong financial records.
LLC Loan Requirements
Essential Documentation
Lenders require specific documents to evaluate LLC loan applications:
Document Type | Purpose |
Articles of Organization | Proves LLC legal status |
Employer Identification Number (EIN) | Business tax identification |
Business Bank Statements | Shows cash flow and financial health |
Business Tax Returns | Verifies revenue and profitability |
Personal Tax Returns | Assesses owner financial stability |
Business Plan | Demonstrates repayment strategy |
Credit Score Requirements
Both business and personal credit scores matter. According to United Capital Source's LLC credit guide, a good business credit score for an LLC typically falls within the range of 80 to 100 on a scale of 1 to 100, while Experian considers anything over 75 as good United Capital Source. Personal credit scores should ideally exceed 700 for the best loan terms.
Financial Requirements
Lenders assess revenue, profitability, and debt-to-income ratios. DirectLend AI analyzes hundreds of data points including revenue, credit scores, industry type, and business age to match LLCs with the most suitable lenders, eliminating guesswork from the application process.
Types of Business Loans for LLCs
SBA Loans
SBA loans offer government-backed financing with favorable terms. According to LendingTree's business rate data, interest rates for SBA 7(a) loans range from 6% to 11.5% LendingTree, making them attractive for LLCs seeking larger amounts with longer repayment periods.
Term Loans
Traditional term loans provide lump-sum financing for specific business needs. The Federal Reserve Bank of Kansas City reports that the average interest rate for new urban small business term loans in Q4 2024 was 7.31 percent for fixed-rate loans and 7.61 percent for variable-rate loans Yahoo Finance.
Business Lines of Credit
Lines of credit offer flexible access to funds, with interest charged only on amounts used. They're ideal for managing cash flow fluctuations and unexpected expenses. Explore different types of business credit options to determine what works best for your LLC.
Equipment Financing
Equipment loans specifically fund machinery and equipment purchases, with rates starting around 7.5%. The equipment itself serves as collateral, making approval easier for LLCs with limited credit history.
Looking for same-day business loan options? DirectLend AI connects you with lenders offering rapid approval and funding.
Qualifying for a Business Loan with an LLC
Key Qualification Factors
Multiple factors determine LLC loan approval:
Business Age: Established LLCs have higher approval rates. According to the Federal Reserve's findings, businesses with six to 20 years in operation saw 48 percent full approval rates Yahoo Finance.
Revenue: The Small Business Credit Survey shows that companies with $1 million to $10 million in annual revenue saw 60 percent full approval rates versus 45 percent for those with $100,000 or less Yahoo Finance.
Industry: Professional services and real estate typically see higher approval rates than hospitality or retail. Learn about high-converting industry niches for business lending.
Credit History: Strong personal and business credit scores significantly improve approval odds and loan terms.
The Application Process
Most lenders follow similar steps: initial application, credit check, financial review, and underwriting. According to alternative lending research, traditional bank approvals can take 30-90 days, including 10-14 days for underwriting and 10-21 days for approval. Alternative lenders often approve applications faster.
DirectLend AI streamlines this process by pre-matching LLCs with lenders based on qualification criteria, reducing rejection rates and speeding up funding.
How to Improve Your Approval Chances
Build Business Credit Early
Establish business credit separate from personal credit by opening trade lines with vendors, obtaining a business credit card, and maintaining timely payments. Learn more about credit score requirements for business loans and how they affect your application.
Maintain Clean Financial Records
Keep accurate financial statements, separate business and personal expenses, and maintain healthy cash reserves. Lenders scrutinize financial organization as an indicator of management capability.
Strengthen Your Business Plan
A comprehensive business plan demonstrating clear repayment strategy and growth projections strengthens applications. Include market analysis, competitive positioning, and realistic financial projections.
Consider Alternative Lenders
Data shows that while only 14.6% of SMB loans were approved by big banks, alternative lenders approved 26.1% of applications Canopyservicing. Alternative lenders often have more flexible requirements and faster processing times. Discover how to find the right lender for your specific needs.
Understand Current Business Loan Rates
Stay informed about current business loan rates and factors affecting your costs to negotiate better terms.
Ready to secure financing for your LLC? DirectLend AI's AI-powered platform analyzes your business data and matches you with verified lenders offering the best rates and terms. Get started with DirectLend AI today and discover your funding options in minutes.
Frequently Asked Questions
Can a brand-new LLC get a business loan?
Yes, new LLCs can qualify for business loans, though lenders will rely more heavily on personal credit scores and owner experience. Focus on building business credit quickly and consider lenders specializing in startup financing.
Do I need collateral to get an LLC business loan?
It depends on the loan type. SBA loans and term loans often require collateral, while business lines of credit may be unsecured. Learn more about secured vs. unsecured business loans.
Will applying for a business loan affect my personal credit?
Most business loan applications involve a personal credit check, especially for LLCs with limited business credit history. This may result in a hard inquiry on your personal credit report, though the impact is typically minimal.
How long does it take to get approved for an LLC business loan?
Approval timelines vary by lender. Traditional banks may take 30-90 days, while alternative lenders and online platforms can approve applications within days or even hours. DirectLend AI connects you with lenders matching your timeline needs.
What if my LLC has bad credit?
LLCs with lower credit scores can still access financing through alternative lenders, though interest rates may be higher. Focus on improving credit scores, maintaining consistent revenue, and demonstrating strong cash flow to improve loan terms over time.
Secure LLC Financing with DirectLend AI
Getting a business loan with an LLC is entirely achievable with proper preparation and the right lending partner. Understanding requirements, maintaining strong financial records, and building business credit position your LLC for approval and favorable terms.
DirectLend AI eliminates the traditional trial-and-error approach to business lending by connecting LLCs directly with verified lenders suited to their specific needs. Our AI-powered platform analyzes business data points, credit profiles, and industry factors to ensure optimal lender matches.
Explore our comprehensive business loan leads platform to understand how lenders source quality borrowers, or visit our blog for more insights on business financing.
Take the next step:Â Contact DirectLend AIÂ to explore your LLC financing options and connect with lenders ready to fund your business growth today.
References
Federal Reserve Banks - 2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey -Â https://www.fedsmallbusiness.org/reports/survey/2024/2024-report-on-employer-firms
Federal Deposit Insurance Corporation - 2024 Report on Small Business Lending Survey -Â https://www.fdic.gov/publications/2024-report-small-business-lending-survey
U.S. Small Business Administration - Small Business Administration Loan Program Performance -Â https://www.sba.gov/document/report-small-business-administration-loan-program-performance
LendingTree - Average Business Loan Rates for 2025 -Â https://www.lendingtree.com/business/rates/
United Capital Source - How to Build Business Credit for an LLC (2025 Guide) -Â https://www.unitedcapitalsource.com/blog/build-llc-business-credit/
Nav - How to Build Business Credit for an LLC -Â https://www.nav.com/blog/how-to-build-credit-for-an-llc-29964/
Canopy Servicing - The State of Small Business Lending: Statistics and Trends for 2025 -Â https://www.canopyservicing.com/blog/small-business-lending-statistics/