Yes, it’s possible to use a personal loan to cover business expenses. However, not all lenders allow it. Be sure to research lender loan use restrictions before applying.
A personal loan for business may come with risk but can be easier to qualify for than traditional business loans.
| Lender | User ratings | Best for… | APR range | Loan terms | Loan amounts | Credit score required | Origination fee |
|---|---|---|---|---|---|---|---|
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Large loan amounts | 6.99% - 25.49%* (with autopay) | 24 to 84 months | $5,000 - $100,000 | Good to excellent credit | None |
 | Bad-credit borrowers | 7.80% - 35.99% | 36 and 60 months | $1,000 - $50,000 | 300 | 0.00% - 12.00% | |
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | Repayment assistance programs | 7.99% - 24.99% | 36 to 84 months | $2,500 - $40,000 | 720 | None |
 | Small loan amounts | 8.49% - 35.99% (with discounts) | 24 to 84 months | $1,000 - $50,000 | 580 | 1.85% - 9.99% | |
 | Secured loans | 8.99% - 35.99% | 36 to 60 months | $2,000 - $50,000 | 600 | 0.99% - 8.99% | |
 | Same-day funding | 9.116% - 29.99% (with autopay) | 36 or 60 months | $2,000 - $45,000 | 640 | Up to 9.00% |
| APR range | 6.99% - 25.49%* (with autopay) |
| Loan terms | 24 to 84 months |
| Loan amounts | $5,000 - $100,000 |
| Origination fee | None |
| Minimum credit score | Good to excellent credit |
| Pros | Cons |
|---|---|
High borrowing cap No origination fee Same-day funding available | Only available to those with good or excellent credit No option to prequalify Higher minimum loan amount |
However, LightStream will not be a fit for all borrowers. The company is up front about the fact that it only works with those with good or excellent credit. At the same time, its $5,000 minimum loan amount may be more than some need.
Read our full LightStream personal loan review.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.99% APR with a term of 3 years would result in 36 monthly payments of $304.17. Truist Bank is an Equal Housing Lender. © 2024 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
| APR range | 7.80% - 35.99% |
| Loan terms | 36 and 60 months |
| Loan amounts | $1,000 - $50,000 |
| Origination fee | 0.00% - 12.00% |
| Minimum credit score | 300 |
| Pros | Cons |
|---|---|
Considers applicants with little or no credit history Funding available within one business day Option to change your monthly payment date | Charges an origination fee Limited loan terms available High maximum APR |
Still, if you are approved, Upstart’s maximum annual percentage rate (APR) is quite high, as are its origination fees, so you’ll likely pay more for the privilege of borrowing. Plus, you’ll only have a few options for your loan term.
Read our full Upstart personal loan review.
| APR range | 7.99% - 24.99% |
| Loan terms | 36 to 84 months |
| Loan amounts | $2,500 - $40,000 |
| Origination fee | None |
| Minimum credit score | 720 |
| Pros | Cons |
|---|---|
No origination fee Competitive minimum APR Three repayment assistance options | Charges a $39 late payment fee Higher minimum credit score No joint loans |
Unfortunately, Discover’s loans are harder to qualify for than some other lenders on this list, with a minimum credit score of 720. Additionally, the $39 late fee could add up if you have trouble making payments on time.
Read our full Discover personal loan review.
| APR range | 8.49% - 35.99% (with discounts) |
| Loan amounts | $1,000 - $50,000 |
| Loan terms | 24 to 84 months |
| Origination fee | 1.85% - 9.99% |
| Minimum credit score | 580 |
| Pros | Cons |
|---|---|
Small loan amounts available Interest rate discount available Allows for joint applications | High maximum APR Charges an origination fee Charges late fees |
Still, at 35.99%, Upgrade’s maximum APR is quite high, which can get expensive if you have bad credit. In addition, the company charges some hefty fees, including an origination fee that ranges from 1.85% - 9.99% and an additional $10 fee for late payments.
Read our full Upgrade personal loan review.
| APR range | 8.99% - 35.99% |
| Loan terms | 36 to 60 months |
| Loan amounts | $2,000 - $50,000 |
| Origination fee | 0.99% - 8.99% |
| Minimum credit score | 600 |
| Pros | Cons |
|---|---|
Low minimum APR Lower minimum credit score requirement Smaller loan amounts available | Requires collateral Charges an origination fee Limited loan terms |
However, the downside of choosing a secured loan is that the lender can repossess your collateral if you stop making payments on your loan. Also, it’s important to be aware that Best Egg does charge an origination fee on its loans.
Read our full Best Egg personal loan review.
| APR range | 9.116% - 29.99% (with autopay) |
| Loan terms | 36 or 60 months |
| Loan amounts | $2,000 - $45,000 |
| Origination fee | Up to 9.00% |
| Minimum credit score | 640 |
| Pros | Cons |
|---|---|
Same-day funding available Open to borrowers with fair credit Lower minimum APR | Charges an origination fee Not available in all states Relatively low borrowing cap |
At the same time, Rocket Loans’ borrowing cap is quite low, maxing out at just $45,000. If you need to borrow more than that, you may need to consider another lender. Additionally, Rocket Loans is not available to residents of West Virginia, Nevada or Idaho.
Read our full Rocket Loans personal loan review.
As the name suggests, a personal loan for business is simply a personal loan that’s used to fund business expenses. Since personal loans can be used to fund almost anything, many lenders allow them to be used to cover business-related purchases when needed.
The major benefit of going this route is that personal loans tend to be easier to qualify for than traditional small business loans. This is because approval is based on the financial profile of the business owner rather than the health of the business itself. In this case, your eligibility will be largely based on your personal FICO score and DTI ratio, rather than common business metrics, such as annual revenue or overall time in business.
However, the downside is that you’ll need to accept personal responsibility for paying back the loan. With a traditional business loan, the liability for repayment falls on the business itself. However, if you decide to take out a personal loan and default on the loan, your credit score will suffer the negative impact.
Luckily, the process for applying for a personal business loan is the same as if you were applying for a personal loan for any other purpose. Here’s what you can expect:
Yes, it’s possible to use a personal loan to cover business expenses. However, not all lenders allow it. Be sure to research lender loan use restrictions before applying.
Personal loans are often easier to qualify for than small business loans, which may be beneficial to some borrowers. Yet, they require the business owner to accept personal responsibility for paying back the loan, which may be a deterrent to others.
The interest on personal loans may be tax deductible if the funds are used toward business expenses. That said, it’s always a good idea to verify allowable tax deductions with a professional as you’re filing your return.