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Best Loans for the Self-Employed April 2024

For small business owners and contractors, navigating the path to obtaining a loan often presents more hurdles than those holding traditional W-2 employment. Yet, it's important to remember that you have viable pathways to secure financing. Here are the top loans available for the self-employed, designed to help you find the financial support you need with terms that accommodate the unique nature of your work.

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Editor's Choice
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Key Facts

  • Free-to-use marketplace with a choice of vetted lending partners.
  • Borrowers are in control and can compare competitive loan options.
  • No prepayment fees and origination fees as low as 0%

Pros

pros iconTwo minute application process

pros iconNo hard credit check for prequalified rates

Cons

cons iconNot available in New York and Hawaii

cons iconBBA rating of 1.27 stars out of 5

Personal Loans Rate and Terms Disclosure: Rates for personal loans provided by lenders on the Credible platform range between 4.60% – 35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties..

Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lenders will conduct a hard credit pull when you submit your application. Hard credit pulls will have an impact on your credit score. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile. Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680.

Bonus disclosure:
“All bonus payments are by gift card.”

*Not all available financial products and offers from all financial institutions have been reviewed by this website

  • $1K-$100K Loan Amount
  • 600 Min Credit
  • 5.99-35.99% APR
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Key Facts

  • Good credit gets low rates and zero fees
  • Fast and easy online process
  • $100 Loan Experience Guarantee¹

Pros

pros iconNo origination or prepayment fees

pros iconOffers large loans up to $100,000

pros iconA division of the reputable SunTrust Bank—one of the nation’s top financial services companies

pros iconYou can receive funds as quickly as the same day you apply (conditions apply)

Cons

cons iconLightStream does not offer pre-approval with a soft credit check

cons iconCaters to those with good credit

LightStream is a part of Truist Bank. While most correspondence will come from LightStream, you might notice the name Truist on certain communications from us. We continue to serve customers across all 50 states, and you do not need to be an existing customer to qualify for a LightStream loan.

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and credit profile. The lowest rates require excellent credit. At least 22% of approved applicants applying for the lowest rate qualified for the lowest rate available based on data from 07/01/2022 to 09/30/2022.

Rate is quoted with an AutoPay discount. AutoPay discount is only available before 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 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.

  • $5K-$100K Loan Amount
  • 660 Min Credit
  • 1 Days Funding Time
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Key Facts

  • Multiple types of funding, nationwide
  • Get help from a loan representative
  • Highly rated customer support

Pros

pros iconEasy way to compare business loans from over 35 lenders

pros iconPartners with large, established lenders such as Bluevine, OnDeck, and Funding Circle

pros iconLoan decisions are made quickly after an easy application process

Cons

cons iconNo transparency of loan terms readily available

cons iconLoan funding can take up to one week, which is longer than competitors

cons iconCollateral is required from some of BusinessLoans.com’s lending partners

BusinessLoans.com allows users to obtain information about certain loans, financial products, and services offered through third-party service providers and advertisers. BusinessLoans.com is not an agent or advisor to you or any other third party.

You acknowledge and agree that our website is solely an intermediary to connect users with service providers to obtain information about certain financial products and services. You acknowledge and agree that we are not a financial institution, credit card issuer, or other financial service provider and that any information or advice made available through the Services is for informational purposes only.

We do not, and will not, create any coverage or credit decision with any service provider that may be referred to you through our Services. We do not (i) validate the licensing, certification, or other qualifications of Service Providers that you may encounter through our Services, (ii) guarantee the terms or rates offered by any third party through or on our Services, or (iii) issue credit cards or any other financial products.

We are not responsible for the conduct or policies of the service providers. The terms and rates provided by any service provider will be subject to the applicable terms and conditions of the products and services offered by the service providers.

  • $5K-$3M Loan Amount
  • 640 Min Credit
  • 24 Hours Funding Time
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Key Facts

  • Credit Score: 570
  • Age of business: 6 months
  • Monthly revenue: $20,000
  • Origination fee: 3%

Pros

pros iconSuccessful applications receive funding in less than 72 hours

pros iconDiscounts available for early repayment of loans

pros iconLow credit threshold for loan eligibility

pros iconGood customer service and A+ BBB rating

Cons

cons iconUses factor rating instead of APR, which makes comparing with other loan offers difficult

cons iconOnly short-term loans are available

Fora Financial provides business capital, including business loans and Revenue Based Financing, directly and through a network of unaffiliated third-party funding providers. Business loans are offered by Fora Financial Business Loans LLC or, in California, by Fora Financial West LLC, a licensed California Finance Lender, License No. 603J080. Fora Financial Advance LLC offers Revenue Based Financing. Business capital is also made available through US Business Funding, a sister company of Fora Financial. The products and amounts offered vary by state.

  • $5K-$1.5M Loan Amount
  • 570 Min Credit
  • 72 Hours Funding Time
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Key Facts

  • Credit Score: 650
  • Age of business: 1 Year
  • Monthly revenue: $25,000
  • Origination fee: 0-2%

Pros

pros iconQuick approval time

pros iconFast time to funding

pros iconGood track record

pros iconFlexible repayment options

Cons

cons iconNo transparency on rates

cons iconAdditional fees sometimes necessary

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

  • $10K-$500K Loan Amount
  • 650 Min Credit
  • 24 Hours Funding Time

What is a Loan for the Self-Employed?

A personal loan allows individuals to borrow a specific amount from banks, credit unions, or private lenders for a defined period. Unlike secured loans, personal loans are unsecured, meaning they do not necessitate the borrower to provide collateral. Repayment of these loans occurs over a predetermined timeframe, with interest applied according to the terms set by the chosen lender.

Top Loans for Self-Employed

sofi logo
SoFi

Low Rates. No Fees are Required.

680

Min Credit Score

8.99-29.99%

APR. Fixed Rate

8.99-29.99%

APR. Variable Rate

$5K-$100K

Loan Amount

24 to 84 months

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

Same-day funding if approved before 7:00 PM ET days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Personal loan application process is easy and only takes a few minutes to complete
  • con-icon Soft credit check that doesn’t affect your credit score and gives you personalized rates
  • con-icon Fixed and variable rate loans available ranging from $5,000 to $100,000
  • con-icon No late or origination fees required
  • con-icon Excellent customer support team
  • con-icon Online autopay comes with a discount on interest
  • con-icon Exclusive benefits for members (ex. networking events and access to financial advisors)
  • con-icon Unemployment Protection feature comes with a temporary payment pause (up to 12 months)
  • con-icon No prepayment penalties
  • con-icon May take up to 4 days to receive funds after approval (longer than other online lenders)
  • con-icon High eligibility requirements (ex. good credit and sufficient income)

Loan Purpose

drop-down-btn
  • Credit Card Refinance
  • Debt Consolidation
  • Home Improvement
  • Major Purchase
  • Medical Expenses
  • Relocation
  • Vacation
  • Wedding

Loan Type

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  • Unsecured Personal Loans

660

Min Credit Score

7.99-25.49%

APR. Fixed Rate

$5K-$100K

Loan Amount

2-7 years

Repayment terms

No

Soft Credit Pull

Direct

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

1 days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Get a loan for practically anything
  • con-icon Autopay discount available
  • con-icon Dedicated app to manage your loan
  • con-icon LightStream doesn’t charge any fees
  • con-icon Personal loan up to $100K
  • con-icon Requires steady income
  • con-icon 1-3 Days till funding

Loan Purpose

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  • Car
  • Major Purchase
  • Household Expenses
  • Vacation
  • Wedding
  • Other

Loan Type

drop-down-btn
  • Secured Personal Loans
  • Unsecured Personal Loans
  • Fixed-Rate Personal Loans
  • Variable-Rate Personal Loans

600

Min Credit Score

8.99-35.99%

APR. Fixed Rate

8.99-35.99%

APR. Variable Rate

$2K-$50K

Loan Amount

36-60 months

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

Yes

Other Fees

0.99-8.99%

Origination Fee

Undisclosed

Prepayment Fee

1-3 days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Soft credit pull for pre-approval
  • con-icon Funding could arrive in 1 day
  • con-icon Application takes a few minutes
  • con-icon APR presented past pre-approval
  • con-icon Credit score criteria not clear
  • con-icon Loans require an origination fee

Loan Purpose

drop-down-btn
  • Home Improvement
  • Major Purchase
  • Medical Expenses
  • Relocation
  • Vacation
  • Wedding
  • Other

Top Loan Types for Self-Employed

Finding the right personal loan can be a bit more challenging for self-employed individuals due to the variability of their income and the stricter documentation requirements. However, several types of personal loans cater specifically to the needs of the self-employed, offering flexibility and competitive terms. Here are some of the top personal loan types suitable for self-employed professionals:

  • Unsecured Personal Loans: These are the most common type of personal loans, which do not require any collateral. Lenders evaluate your creditworthiness based on your credit score, income documents, and financial history. Providing proof of a steady income through tax returns or bank statements is crucial for self-employed individuals.
  • Secured Personal Loans: Unlike unsecured loans, secured loans require collateral, such as real estate or a vehicle, making them easier to obtain for self-employed individuals with fluctuating incomes. The interest rates may also be lower compared to unsecured loans due to the reduced risk for the lender.
  • Line of Credit: A personal line of credit offers flexibility, allowing self-employed borrowers to draw funds up to a certain limit as needed. This can be particularly useful for managing cash flow irregularities common in self-employment.
  • Peer-to-Peer (P2P) Loans: P2P lending platforms connect borrowers with individual investors rather than traditional financial institutions. These platforms may offer more lenient approval criteria and a straightforward application process, which can benefit self-employed applicants.
  • SBA Loans: While primarily for business purposes, Small Business Administration (SBA) loans can also benefit self-employed individuals looking for personal loans with favorable terms. The SBA guarantees a portion of the loan, reducing the risk for lenders and potentially offering lower interest rates.
  • Invoice Financing: For self-employed individuals with a business component, invoice financing allows you to borrow against the value of your outstanding invoices. This can provide immediate cash flow to cover personal expenses while waiting for clients to pay.

Approved Small Business Administration loans

source: USAFACTS

The trend in approved SBA loans from 2007 to 2021 showcases the economic resilience and policy responsiveness of the U.S. towards small businesses. Beginning with 124,360 loans in 2007, the figures dipped during the 2008 financial crisis but surged dramatically in 2020 and 2021, with over 9 million and 7 million loans approved, respectively. This surge reflects the substantial government support extended to small businesses during the COVID-19 pandemic, highlighting the pivotal role of SBA loans in aiding businesses through challenging economic times.

How to Take Out a Loan

  1. Assess Your Financial Health: Ensure your credit report is accurate to improve or maintain your score and organize tax returns and bank statements to demonstrate consistent earnings.
  2. Determine Loan Needs: Define the purpose and the exact amount you need, considering your income's variability.
  3. Research Lenders: Compare the terms and eligibility criteria of banks, credit unions, and online platforms for working with self-employed individuals.
  4. Prepare Documentation: Prepare your financial documents, including tax returns, profit and loss statements, bank statements, and personal identification.
  5. Apply: Complete the lender's application process accurately, providing all requested information.
  6. Review Terms: Carefully examine the loan's interest rate, fees, repayment schedule, and penalties.
  7. Plan for Repayment: Set aside a portion of your income for repayments or adjust your budget to manage the new expense efficiently.

Average Loans Interest Rates by Credit Score for Self-Employed

Credit Score Range Average Interest Rate
720 and above 10.3% - 12.5%
690 - 719 13.5% - 15.5%
630 - 689 17.8% - 19.9%
300 - 629 28.5% - 32.0%

How To Compare Loan Providers for the Self-Employed

Comparing personal loan providers is critical for self-employed individuals due to their unique financial situations. Here's how to effectively compare lenders to find the best personal loan:

  1. Interest Rates: Look for the lowest annual percentage rate (APR), including the interest rate plus any fees. Lower APRs mean lower overall costs.
  2. Loan Terms: Seek terms that match your repayment ability. Shorter terms mean higher payments but lower interest costs, and vice versa. Additionally, consider how the loan term affects your monthly payment and total interest paid.
  3. Fees and Charges:
  • Origination Fees: Some lenders charge a fee to process the loan, which can be a flat amount or a percentage of the loan amount.
  • Prepayment Penalties: Avoid lenders that penalize you for paying off the loan early if you plan to do so.
  • Late Payment Fees: Understand the fees for late payments.
  1. Eligibility Requirements: Check the lender's eligibility requirements before applying. Some lenders may have strict credit scores or income requirements, while others may be more flexible.
  2. Reputation and customer service: Look for lenders with a good reputation and positive customer reviews. Check online reviews and ratings from sites Lendstart. Consider the lender's customer service options and responsiveness rate.
  3. Prequalification Process: Opt for lenders that offer a prequalification process with a soft credit check, which won’t affect your credit score. This gives you an idea of the rates and terms you might qualify for without committing.

Alternative Options to Loans for the Self-Employed

If a personal loan isn't the right fit for your financial situation, or if you're looking for different financing options, there are several alternatives to consider. Each alternative has its own advantages and disadvantages, depending on your needs, creditworthiness, and the purpose of the loan. Here are some common alternatives to personal loans:

  • Credit Cards: Credit cards can be a convenient option for short-term financing or smaller amounts, especially if you qualify for a card with a 0% introductory APR offer. However, interest rates can be high if the balance isn't paid off before the promotional period ends.
  • Home Equity Loans or Lines of Credit (HELOCs): If you own a home and have equity in it, a home equity loan or a HELOC can provide access to funds at lower interest rates than unsecured personal loans. The risk here is that your home is collateral, which means it could be at risk if you fail to make payments.
  • Borrowing from Friends or Family: This can be a no- or low-interest option with more flexible repayment terms. However, it's important to consider the potential impact on your relationship if you cannot repay the loan as agreed.
  • 401(k) Loans: Some 401(k) plans allow you to borrow against your retirement savings. This option doesn't require a credit check, and interest is paid back into your account. However, there are risks, including penalties and taxes if you don't repay the loan according to the terms, and the potential impact on your retirement savings.

Conclusion

Choosing the right personal loan is crucial for self-employed individuals, given their unique challenges in proving income stability and meeting other lender requirements. It's important to thoroughly research and compare loan options, considering factors like interest rates, loan terms, and lender flexibility. By carefully selecting the best fit for your financial situation, you can leverage a personal loan to meet immediate financial needs and invest in opportunities for growth and stability in your self-employment journey.