LLC business loans are similar to regular business loans. You get approved, get the funding, and then make the additional payments. The difference comes down to who is liable for the loan. With an LLC business loan, the LLC is technically the borrower.
This means that if your LLC gets approved for a business loan, the lender can only come after the LLC’s assets. Usually, however, you will need to provide a personal guarantee. This eliminates your liability protection.
There are benefits of LLC business loans such as tax return savings and helping you build your business credit. If you’re trying to finance your business, it’s worth familiarizing yourself with LLLC business loans.
An LLC business loan is money provided to a business, in this case an LLC, in exchange for repayment, plus interest. LLC business loans may take many different forms and be available from all kinds of lenders. Traditional banks, online micro-lenders, and the SBA provides LLC business loan programs.
However, unless your business has a long, successful financial record, you’ll need to provide a personal guarantee. A personal guarantee means that you agree that the lender can come after your assets if you default.
The process of finding, applying for, and getting approved for an LLC business loan is similar to the process for any other business loan. You need to determine your financing needs, gather paperwork, contact lenders, and go through the application process.
To qualify for an LLC loan will vary depending on the lender. Banks typically have more strict requirements than LLC loans from online lenders. Assuming all else is equal, large LLC business loans will have more stringent qualification criteria than small loans.
Application processes vary but there are several steps you should take before you apply.
Both of your business and personal credit profiles should be reviewed. Knowing how strong your credit is will help you find the right loan. It will also give you time to improve your credit score which will benefit your overall business.
Before providing money to your bank account, traditional lenders like banks and credit unions will typically want to see a business plan. This plan should explain what you need the funds for, how you’ll use the funds, and how you’ll pay them back.
There are many LLC business financing options. Each one works a little differently in terms of amount, cost, eligibility, use of funds, and more.
You should familiar yourself with the following types of LLC financing options:
As with any other financing product, you should shop around for your business loan. When you have identified the right lender, it’s time to submit your application.
There are many other ways to finance your business including an LLC business loan. There are many resources for you to consider that is right for you and your business.