LLC Business Loan Requirements

A Limited Liability Company (LLC) offers flexibility and liability protection—but when it comes to financing, there are specific requirements you’ll need to meet. Lenders evaluate your legal status, financial health, and business history to determine eligibility for a loan. Here’s what you need to know to improve your chances of approval.

1. Legal Establishment and Records

• Articles of Organization: These confirm your LLC is legally registered and authorized to operate.
• Operating Agreement (recommended): A formal document outlining ownership and management structure, demonstrating professionalism to lenders.

2. Credit and Financial History

• Business Credit Score: An established business credit history helps build lender confidence.
• Personal Credit Score: For newer LLCs, lenders often check the owner’s credit—aim for 600+.
• Financial Statements: Include recent balance sheets, income statements, and cash flow records to show stability.

3. Cash Flow and Revenue

• Consistent Revenue: A reliable stream of income over 6–12 months is preferred by lenders.
• Cash Flow Statements: Show that your business earns enough to meet loan repayment obligations.

4. Time in Business

Many lenders require your LLC to be operating for at least 6 months to 2 years. Startups may still qualify through alternative lenders, but requirements can be more stringent.

5. Collateral and Loan Type

• Collateral (for larger loans): May include inventory, equipment, property, or accounts receivable.
• Unsecured Loans: Available for smaller amounts, but typically come with higher interest rates and stricter conditions.

6. Business Plan and Loan Purpose

• Business Plan: A detailed plan showing how you’ll use the funds and how they will contribute to growth and repayment.
• Loan Objective: Clarify whether the loan is for working capital, expansion, equipment, or other specific needs.

7. Legal and Tax Documentation

• Tax Returns: Typically required for the past 1–3 years to confirm income and tax compliance.
• Licenses and Permits: Ensure your LLC is operating legally in your industry and region.

8. Personal Guarantees

Especially for new or small LLCs, lenders may request a personal guarantee. This makes the owner personally liable if the business cannot repay the loan, which increases the lender’s security but also the borrower’s personal risk.

The Bottom Line

To qualify for a loan as an LLC, you’ll need more than a good idea—you need solid documentation, reliable income, and a clear use case for the funding. Having your records organized, your business plan refined, and your legal status in good standing can all improve your chances.

Next Steps

If you’re seeking funding for your LLC, make sure your documents are in order, your credit is strong, and your business goals are clear. Contact Swish Funding today to explore financing options tailored to your business needs.