Which LLC Small Business Loan is best for your company?

A limited liability company (LLC) is a business formation beneficial for more than one owner. Unlike a sole proprietorship, it is a separate legal and protects the business owner(s) from legal liabilities. When a company seeks to grow, securing financing is vital for expansion. Obtaining an LLC small business loan is attainable for many companies. Traditional lending institutions, fintech funding, working capital loans, and merchant cash advances are options. We will examine the pros and cons in each scenario to help your company better assess which route is more viable for your firm.

Which LLC Small Business Loan is best for your company?


Traditional Bank Loans for Small Businesses

If you are a small business owner, there’s a good chance you’ve considered taking out a loan from a traditional bank. However, before you make any decisions, it’s important to weigh the pros and cons of this type of financing. According to Nav, here is a general breakdown of the benefits and drawbacks of conventional business loans:


  • Lower, fixed interest rates
  • Monthly payments are predictable
  • Build business credit
  • Professional banker assistance
  • Many available lending options


  • Lengthy paperwork process
  • Wait time for funding is longer
  • Requires strong credit history (in some cases, the authorized owners must personally guarantee the loan)
  • Can require specific collateral

Traditional banks require more financial stability, and if you qualify it can help propel your business to the next level of expansion.

Another option to try in conventional lending is the U.S. government. Can you get an SBA loan with an LLC? Yes, the sole purpose of the Small Business Administration (SBA) is to supply government-backed loans to businesses. Their criteria are similar (if not more stringent) to commercial banks. However, if your company qualifies it can be extremely beneficial. Here are some details:

  • 7(a) loans are a group of SBA loans that guarantee portions of the total amount, cap interest rates, and limit fees. They can be short or long-term loans with a maximum of $5 million borrowing limit.
  • 504 loans are long-term, fixed-rate financing to purchase or repair real estate, equipment, machinery, or other assets. They also cap at $5 million.
  • The microloans loan program provides $50,000 or less to help businesses start and expand.

If your business has been established for more than 2 years and has a healthy financial profile we encourage you to obtain an SBA loan.

Apply for an SBA Loan


Fintech Funding for Small Businesses

Fintech (financial tech) companies have emerged with prominence lately because of the gap in the marketplace with respect to small businesses securing financing. According to Forbes, 80% of small business loans were rejected by big banks in 2019. That figure can be deterring for an LLC key owner looking for expansion.

Fintech companies look beyond the credit score by adding AI (artificial intelligence) and data analytics to their risk assessment evaluations. Advances in AI and big data can translate into faster loan processing- something that can take months with traditional lending granted the underwriting process flows smoothly.

Some of the leaders in the fintech space for securing LLC small business loans include Kabbage (AmEx), OnDeck, and CAN Capital. There are plenty more in the space for your evaluation, here is a resource of more than 30 fintech companies offering small business loans.


Working Capital Loans for Small Businesses

Working capital loans are a good alternative to conventional business loans. A working capital loan lends an upfront amount and the business pays it back to the lender as a portion of each sale until the terms are satisfied. Your business sales history becomes the major signal for creditworthiness. The company should be in business for at least one year and the key owner should have a 600 minimum credit score. Some top lenders in the space are PayPal and Quickbooks.


Merchant Cash Advance as an LLC Small Business Loan

Merchant cash advances offer easy lump-sum loans repaid from future sales

One of the best ways a small business can secure funding for growth without jumping through all of the obstacles traditional banks put you through is by using a merchant cash advance. Similar to working capital loans, the lender will offer an upfront lump-sum payment and be repaid from your future debit/credit card sales.

Merchant cash advances do not depend on the authorized owner’s credit score. Nor do they require a personal guarantee or collateral. The company should be in business for at least 9 months and process $5,000 per month in sales. That’s it!

Funds can be available quickly (within a day in most cases) unlike the months that can be involved with traditional lending. This infusion of cash can be used for paying or hiring employees, inventory, advertising, expansion, remodeling, equipment purchases, taxes, paying bills, or emergencies.

Apply for a Merchant Cash Advance

In summary, we pointed out several LLC small business loan products available from traditional to SBA loans, from fintech offerings to working capital loans. However, a merchant cash advance is one of the fastest and easiest funding sources small businesses can secure.

Merchant cash advances are an excellent way to get the money you need to keep your business running. They do not require credit checks, personal guarantees, or collateral from the authorized owner. Furthermore, they can provide funding much faster than traditional lending institutions. If you are seeking to expand your business, apply with Merchant Capital Direct today!