Are you thinking about registering an LLC so that you can then apply for a SBA or other type of loa

23 Aug 2022 · 1 min

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Banks won't lend to new LLCs without credit history or cash flow. You'll need a personal guarantee and proof you can cover the loan yourself. Forming an LLC won't make it easier to get approved.

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Could you register an LLC to help you get a business or personal loan? A lot of people have been calling me recently saying that they want to register an LLC so that they can get a loan, so that they can then purchase an asset for their personal self or for their business. So unless you have a flawless business plan or proof that you have a deal that's about to close, then it's pretty unlikely that the bank is going to issue a brand new LLC a loan. New LLCs have no history of credit, so obviously the bank is going to be very hesitant and reluctant to trust that your LLC is you're going to make enough money to repay the loan. So unless you tell the bank that you're willing to sign a personal guarantee for the loan and show the bank that you have the funds to satisfy the loan, then it's pretty unlikely that the bank is going to issue you any sort of loan to your new LLC.

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