Applying for a personal loan to help fund your business may be the right choice if you need money and can’t qualify for a traditional business loan.
Below are our top picks for these loans, including options for borrowers with bad to excellent credit.
Checking rates is free and won't impact your credit score.
Best for Borrowers with bad to fair credit
2026 NerdWallet award winner
6.70 - 35.99%
$1K - $75K
None
3 to 5 years
Best for Borrowers with bad to fair credit
2026 NerdWallet award winner
6.99 - 35.99%
$2K - $50K
600
3 to 5 years
Best for Borrowers with good to excellent credit
8.01 - 29.99%
$2K - $45K
640
3 to 5 years
Best for Borrowers with good to excellent credit
8.99 - 36.00%
$5K - $50K
640
2 to 5 years
Best for Borrowers with good to excellent credit
8.74 - 24.99%
$1K - $50K
680
1 to 7 years
Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.
30+
Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
25+
Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
60+
Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
Yes, you can use a personal loan to fund almost any expense, including business expenses.
These loans are offered at banks, credit unions and online lenders. Unlike traditional business loans, they don’t consider your business history or revenue. Instead, lenders look at your personal information, like your credit score.
Once approved, you’ll receive the lump sum in your bank account. You’ll then repay the loan in fixed monthly installments, typically over two to seven years.
These installments include interest, which can range from 7% to 36% APR, or annual percentage rate. This represents the overall cost of the loan.
Nerdy Tip
Some lenders have rules around using a personal loan for business. A lender may list this information on its website, or you can call its customer service department to confirm.
Below is an in-depth explainer of what pros and cons to consider as you make this decision, but here’s a quick checklist to get started.
A personal loan for your business may be a good idea if you:
☐ Are starting a new business or don’t yet qualify for a business loan.
☐ Are looking to borrow less than $100,000.
☐ Need the loan funded within a few days.
☐ Can comfortably repay the loan in seven years or less.
Flexibility: As long as your lender has no rules against using a personal loan for your business, you can use the money however you want. This may include purchasing equipment and inventory, stocking up on office supplies, kickstarting your marketing efforts or covering other costs.
Low rates: Personal loans may charge less interest than other financing products — like credit cards, if you carry a balance. This saves you money. The interest is also fixed, so your rate won’t change over the life of the loan.
Easier to qualify: If you’re just starting your business, you may have more luck qualifying for a personal loan than a traditional business loan. Business loans look at your company’s revenue and time in business, along with your personal credit score.
Personal loans are approved based on your credit score, income and existing debt. You can also include multiple income sources — like earnings from a 9-to-5 job or rental properties — to supplement the income you’ll earn from your new venture.
» COMPARE: Best business loans for bad credit
Fast funding: Most personal loans are funded within one week. If you go with an online lender, you’ll probably receive the funds the same or next day after you’re approved. This is faster than traditional business loans. SBA loans, for example, can take 60 to 90 days to go from approval to funding.
Smaller loan size: Personal loans tend to have smaller loan amounts — up to $50,000 for most lenders — than business loans. For a small startup, the size might be just right. But if you own a larger company or plan on making big purchases, you may need a larger amount.
Shorter repayment terms: Most personal loan terms range from two to seven years. If you need a longer repayment term, you’re better off looking at other small-business financing alternatives. SBA loans tend to have the longest repayment terms, ranging from 10 to 25 years.
Harder to receive tax deduction: Interest paid on a personal loan isn’t typically tax deductible, but there’s an exception for personal loans for business. Still, you’ll need to make sure no portion of the loan is used for another type of expense. You’ll also need to provide supporting documentation. This is different from interest paid on a business loan, which is typically tax deductible by default.
Personal credit could be at risk: If you take out an unsecured personal loan and fail to repay it, your credit score will suffer. This makes it harder to access affordable financing in the future.
To get a personal loan, you’ll need to apply with a lender. If you already have a good relationship with your bank or credit union, start there.
Otherwise, online lenders are a good option, since most let you pre-qualify before submitting your application. Pre-qualifying means you can see potential loan terms without any risk to your credit score and compare offers between lenders.
» GET STARTED: Pre-qualify with multiple lenders for free on NerdWallet
Once you’ve decided on a lender, it’s time to complete your application. You’ll need to supply personal details, including your Social Security number. You’ll also be asked for documents that can verify your income, like a pay stub or tax return.
The lender conducts a hard credit pull at this stage, meaning your credit score will drop a few points. This is temporary.
Approval decisions can be instantaneous or take a few days, depending on the lender.
Once approved, you’ll sign the loan documents and receive the funds in your account, sometimes as early as the same or next day.
Once funded, make a plan for how you’ll manage your payments over the life of the loan. Missing even one payment can trigger a late fee and hurt your credit score.
» MORE: How to manage your personal loan
Small-business loan: If you're an established business and want to explore other options, a small-business loan may be a smart choice. When reviewing your application, small-business lenders prefer to see at least two years of operation. Some online lenders may only require a minimum of six months.
» COMPARE: NerdWallet’s picks for the best small-business loans
Business line of credit: A business line of credit is a type of small-business loan but with more flexibility. It works like a credit card, letting you borrow up to a certain limit and then pay interest only on what you borrow. These credit cards are ideal for business owners who aren’t sure of the scope of their financial need.
» COMPARE: NerdWallet’s picks for the best business lines of credit
Business credit card: A business credit card offers revolving credit that’s ideal for short-term expenses. It may be easier to qualify for than a small-business loan. Business credit cards also offer rewards, like cash back or travel points, and help keep your business and personal finances separate.
» COMPARE: NerdWallet’s picks for the best business credit cards
