Business Loan for an LLC: 5 Decisions Before You Apply
Applying in your LLC’s name does not take you, the owner, out of the picture. Here are five decisions to work through before you apply, with Federal Reserve survey data for context and the questions to ask each lender.
By States Funding Team · Published
Start with the context: how often owners get what they ask for
The Federal Reserve Banks’ 2025 Small Business Credit Survey of employer firms is a useful reality check. In the 2026 report, 60% of firms had applied for financing in the prior 12 months. Of the applicants, 42% received the full amount they sought, 36% received some or most of it, and 22% received none. The survey is a convenience sample of employer firms, not every U.S. business, and it says nothing about any one lender or about States Funding. Still, the message for planning is plain: build a plan that works if you get less than you ask for.
One more number from the same report: 60% of firms that borrowed from online lenders said their actual borrowing costs were higher than expected. Keep that in mind for decision five.
Decision 1: What exactly is the money for?
In that Federal Reserve survey, the most common reasons employer firms sought financing were to meet operating expenses (56%) and to pursue an expansion or new opportunity (46%). Write down which bucket you are in, the amount, and the smallest amount that would still do the job. That smaller number is your fallback if an offer comes in under your ask.
Decision 2: Are you past the typical floors?
States Funding’s About page lists about 6 months in business and $10K or more in monthly revenue as typical floors to apply. Its FAQ lists $10K+ monthly revenue, 6+ months operating and a 500+ FICO score as a typical floor for its small business loan and revenue-based financing products.
Treat these as the starting line, not the finish. They are not approval criteria, and clearing them does not mean you will receive an offer, because independent lenders make that call. Two planning steps help:
- Count your months from when the LLC started operating, and ask each lender how it counts time in business.
- Look at your monthly deposits over recent months, not just your best month, and ask how the lender will read them.
Decision 3: Whose credit, and whose guarantee?
An LLC application still touches the people behind it. Even on States Funding’s own application, the owner’s credit is involved: applying and comparing offers uses a soft credit pull only, with no impact to the owner’s credit score, and only the final acceptance step requires a brief credit unlock for the lender. Lenders may also run their own checks before funding.
Personal guarantees are the other half of this decision, and the rules around them are not something to guess at. Ask each lender directly, and get answers in writing:
- Will you review my personal credit, and the credit of other members?
- Will you ask me, or any other member, to sign a personal guarantee?
- If there are several members, who needs to sign, and for what?
- Will the agreement allow a UCC filing, and what collateral would it describe?
Then have an attorney explain what a guarantee would mean for you personally before you sign one. For the collateral question, our guide on what a UCC filing is covers how to look up filings and what to ask.
Decision 4: Which kind of financing fits the need?
Offers through the States Funding lender network cover business lines of credit, small business term loans, revenue-based financing, invoice financing and non-dilutive capital. Instead of guessing which one is “best,” match your Decision 1 answer to a product type, then ask the questions in the right column.
| If your LLC needs | Product type to ask about | Questions for the lender |
|---|---|---|
| Money for a one-time project with a clear cost | Small business term loan | What is the total payback, the payment schedule, and the cost of paying early? |
| A cushion for uneven, recurring expenses | Business line of credit | How do draws, repayment and fees work, including on money I do not use? |
| Cash while customers take time to pay invoices | Invoice financing | Which invoices qualify, what does it cost, and what happens if a customer pays late? |
| Room to breathe when sales swing month to month | Revenue-based financing | Do payments change with my sales, how is each one calculated, and what is the total I will repay? |
| Growth capital for a bigger plan | Non-dilutive capital | What exactly is this product, how is it repaid, and what does it cost in total? |
If an offer ties payments to your sales, the Texas Office of Consumer Credit Commissioner gives a helpful description of commercial sales-based financing under Texas law: it is repaid as a percentage of a business’s sales or revenue, or through payments periodically adjusted based on sales or revenue, so payment amounts may rise or fall with sales. Ask any provider to show you how that would play out in a slow month and a strong one.
If you are weighing a government-backed loan instead, the SBA has its own checklist. Our guide to SBA loan requirements walks through it line by line. SBA loans are not a States Funding product.
Decision 5: How will you compare offers?
Remember that Federal Reserve finding about costs coming in higher than expected. The fix is to compare total payback, not just the payment. Here is an illustrative example, with made-up numbers, for an LLC looking at two offers:
| Illustrative only | Offer A | Offer B |
|---|---|---|
| Amount received | $40,000 | $40,000 |
| Total payback | $46,000 | $48,500 |
| Dollar cost of the money | $6,000 | $8,500 |
In this illustrative example, Offer B costs $2,500 more for the same amount. Payment size, term and early payoff terms can change the picture, so look at all of them. Real offers will differ, and the actual lender written terms govern.
In the States Funding portal, every offer a business qualifies for is shown side by side with full term details, total payback and effective APR. States Funding does not charge the business a fee; lenders pay it a referral fee on funded deals, and it is not paid based on the rate or fees of any specific offer. Lenders can charge their own fees, so put those in your comparison too.
What to have ready
For a States Funding application, you can securely connect a bank account through Plaid, so States Funding never stores your bank login, or upload the last four months of bank statements through the secure portal. Lenders may ask for more during their review. To answer quickly, keep your own records in one folder: your EIN, your LLC’s formation paperwork, who owns what share, and recent financial statements if you keep them. Then ask the lender which of these it actually needs.
The States Funding part, plainly
States Funding is not a lender. Its platform connects your LLC with independent third-party lenders, and each lender originates and services its own financing under separate terms. The lender, not States Funding, decides approval, rates and terms. There is no guarantee that applying leads to an offer, or that funding closes by any particular date. Nothing is binding until you e-sign the lender’s funding agreement, and from then on that signed agreement is what governs the loan, its fees and how you repay. Read how States Funding works, or start your LLC’s application when your five decisions are made.
Sources
This guide is general information for U.S. business owners, not financial, legal or tax advice. States Funding is not a lender. Loans, advances and other financing products are originated and serviced by independent partner lenders, and States Funding does not guarantee that any application will result in an offer. Any examples are illustrative. The actual lender written terms govern any offer you receive.