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While minority businesses have often faced barriers in accessing capital, there are now a growing number of small business loan programs designed specifically for minority entrepreneurs. Many of these funding opportunities also offer additional resources, including business training, mentors, and workshops.

Minority-owned businesses are those with 50% or more ownership by a Black, Hispanic, Native-American, Asian, or another racial or ethnic group. In many cases, women-owned small businesses also qualify.

Read on to learn about minority and Hispanic business loans, grants, and other resources that may help open doors for your small business.

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What Are Minority Small Business Loans?

Any business owner, regardless of ethnic or racial background, can apply for a small business loan. However, there are also small business loans designed to provide more access to this financing in underserved markets. These loans often offer competitive rates, yet have more flexible qualification requirements than traditional business loans. These lenders are looking to support businesses like yours and give them an even playing field among other small businesses.

Recommended: Success Secrets of Hispanic Owned Businesses

Who Qualifies for Minority Small Business Loans?

Specific qualifications for individual loans will vary from one lender to another, but the biggest criteria is that a majority (at least 51%) of the business must be owned and run on a daily basis by a minority.

The Small Business Administration (SBA) recognizes these groups as minorities:

•  African Americans

•  Asian Americans

•  Hispanic Americans

•  Native Americans

For many loans, women are also considered minorities.

Recommended: Small Business Loans for Sole Proprietors

Finding Minority Business Funding Options

As you’ll see below, there are many options when it comes to minority business loans. Often, the biggest challenge is knowing which to apply for.

Before applying for a business loan, you’ll want to look closely at the qualifications, including what type of business owner the loan is targeted to, time in business, annual revenue, credit scores, and if there are any restrictions on how the funds need to be used.

Once you find loan options that may be a good fit for your business, you may want to find out if it’s possible to prequalify. This means finding out whether you would be approved for small business funding and at what interest rate without the lender doing a hard credit check. This allows you to compare small business loans and offers without impacting your credit.

Recommended: Guide to Small Business Expansion Loans

Minority Business Loan Options

Below are some minority loan options for both startups and established businesses.

Minority SBA Loans

The U.S. Small Business Administration (SBA) offers several loan programs, some of which are designed specifically for underserved communities.

8(a) Business Development Program

While it’s not a loan program, the SBA’s 8(a) Business Development program aims to help small disadvantaged businesses (many of which are owned by minorities) by awarding at least 5% of all federal contracting dollars to these businesses. Disadvantaged business owners who participate in the SBA’s 8(a) Business Development program also have a better chance of qualifying for SBA loans.

To qualify for the 8(a) program, your business must be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged, and have been in operation for two years or more. In addition to securing federal contracts, approved businesses can also get business assistance, mentorships, and free training.

Community Advantage Loans

Another SBA small business loan option may be the SBA’s Community Advantage Loan program, which is specifically designed to meet the needs of business owners in underserved communities. To qualify for an SBA community advantage loan, which provides up to $250,000 in capital, business owners need to have good credit and a strong business plan. However, the business’s balance sheet and amount of collateral will not affect eligibility.

To find a Community Advantage Loan in your area, you can ask your current financial institution for a list of local lenders that participate in the program or consult this SBA chart.

Microloans

If you are looking for a smaller loan to either start or expand a business, you may want to check out the SBA’s microloan program. The program is administered by an intermediary network of nonprofit community-based lenders, rather than traditional banks.

Through these lenders, the SBA aims to reach lower-income communities and minority-owned businesses that are often overlooked by traditional lenders. These microloan options come with low interest rates, six-year terms, and up to $50,000 in capital.

Accion

Accion’s mission is to “build a financially inclusive world with access to economic opportunity for all.” The organization does this through free events, training, and workshops, as well as by offering minority business loans.

Its Accion Opportunity Fund provides working capital for minority businesses of $5,000 to $100,000, and is quick and easy to apply for online. To qualify, your business must have been open for at least 12 months, and you must have at least $50,000 in annual revenues.

Accion also offers online resources, events, and networking opportunities (in Spanish and English) to help minority business owners learn and scale their companies.

U.S. Bank’s Business Diversity Lending Program

U.S. Bank is a nationwide bank with an eye on supporting diversity and minority businesses. Its Diversity Lending Program supports woman-, minority-, and veteran-owned businesses by lending qualified applicants up to $250,000.

Specific qualifications vary depending on which kind of financing a business owner is accessing.

The Business Consortium Fund

The Business Consortium Fund (BCF) says its mission is to expand capital access for small businesses across the United States to advance a more inclusive and equitable society. It focuses on minority business enterprises operating in the supply chains of the nation’s largest corporations and government organizations.

A loan officer will guide you through the qualification process and loan options.

Indian Loan Guarantee Program

Run by the U.S. Department of the Interior, the Indian Loan Guarantee and Insurance Program (ILGP) is designed to help American Indian and Alaska Native businesses overcome barriers to conventional financing at reasonable rates.

To qualify, you must be an individual who is an enrolled member of a federally recognized American Indian and Alaska Native tribe or group and own at least 51% of your business. You must also have at least 20% equity in the project you want financed, and that project must benefit the economy of a reservation or tribal service area.

State and Local Loans for Minorities

Loans targeted to minority business owners are often offered at the state and local levels. In many cases, these loans focus on specific industries or for specific uses. It’s worthwhile to research your state’s minority-focused loan programs, grants, and resources.

CDFI Loans

The Community Development Financial Institutions Fund (CDFI Fund), which is part of the U.S. Treasury, gives funds to companies and organizations throughout the U.S. that help underserved people and communities. Minority business owners can reach out to local banks and nonprofit groups that have received CDFI funds to discuss and apply for low-cost business loans.

Office of Hawaiian Affairs Mālama Loan

If you are a business owner of Native Hawaiian ancestry, you may be eligible for an OHA Mālama Business Loan. Approved applicants can borrow $2,500 to $149,999 with repayment terms of up to seven years. You must be a resident of Hawaii, be registered with the OHA Hawaiian Registry, have a credit score of 600 or higher, and a debt-to-income ratio of 45% or less.

Recommended: The Best Metros in the U.S. for Underrepresented Business Owners

Minority Business Loan Options vs Conventional Small Business Loans

There are a wide variety of business loans available to minority businesses, including loans specifically targeted to underserved communities and conventional loans that are available to all small businesses. Which type of financing is best for your business? There are pros and cons to each. Here’s how they compare.

Recommended: What Are Working Capital Loans?

Grants for Minority Business Owners

A minority business loan isn’t your only option for funding. It may also be possible for your business to qualify for a small business grant.

The chief benefit to business grants vs. loans is that grants, unlike loans, don’t have to be repaid. Make sure to explore both minority business loans and grants to find the best source of capital for your business.

Recommended: 20 Small Business Startup Grants, Programs and Checklists 2025

Grants.gov

Grants.gov is the largest database of federal grant opportunities. While most grants are not specifically targeted to minority small business owners, awards are available for all types of entrepreneurs, especially those focused on healthcare, U.S. defense, and environmental protection.

USDA Rural Development Grants (RBDG)

The USDA’s Rural Development Grant is available to businesses in rural communities that have fewer than 50 employees and less than $1 million in gross revenue.

This type of small business grant varies in size and can be used for a wide range of projects that aid business development in rural areas, including training, technical assistance, acquisition or development of land, building construction or renovations, equipment purchases, and pollution control.

Recommended: 30 Small Business Grants and Databases for Women in 2024

FedEx Small Business Grant Contest

FedEx has been holding its Small Business Grant Contest for over a decade. Though not specifically targeted to minority businesses, any qualified small business can enter the contest for a chance at winning grant money. In the most recent year, FedEx provided one $50,000 grant and nine $20,000 grants. Check the contest website for future opportunities.

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Small Business Resources for Minorities

Here is a look at other resources available for minority business owners.

MBDA

The Minority Business Development Agency advocates for minority-owned businesses, and offers workshops, events, research, and conferences to help underserved entrepreneurs. Its Enterprising Women of Color Initiative is aimed to help minority women succeed in business.

U.S. Minority Chamber of Commerce

The U.S. Minority Chamber of Commerce (UMCC) has locations in most cities and actively promotes the economic growth, development, and interests of minority-owned businesses. Members have access to events, training, and other business resources to support them in their growth.

Recommended: 20 Small Business Startup Grants, Programs and Checklists 2025

The Takeaway

Whether you’re looking to start a minority business or expand an existing one, you’ll likely need access to capital to turn your vision into a reality. There are several sources for funding and search tools that can help you as you hunt for funding to make your small business dreams become a reality.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

What can you use minority business loan funds for?

Some minority loans for business have strict requirements about what you can and can’t use them for, but generally speaking, you can use them for a range of business purposes, including working capital, purchasing inventory, hiring staff, and buying equipment.

Can you get minority business loans with bad credit?

Some minority loans have less stringent credit requirements than traditional bank loans and look at other criteria, such as annual revenues, to determine eligibility.

Do you need a business plan to apply for a minority business loan?

Typically, yes. Lenders (both minority-focused and conventional) often want to look at an applicant’s business plan.

What can I spend a minority grant on?

Some grants may stipulate what you can spend the money on (such as a project that benefits an underserved community), while others offer more flexibility.

Who qualifies for minority-owned business loans?

Typically, the business must be owned and operated by a minority with at least a 51% stake in the company. There may also be other requirements, such as credit scores, time in business, and annual revenues.

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Photo credit: iStock/RichLegg

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOSMB-Q424-072

The initial stages of creating a startup can be exciting — being your own boss, working flexible hours, and building something from the ground up. Finding the funding to transform an idea into a viable business venture, however, is a reality check for many entrepreneurs.

With little business history or proven revenue, startups can find it challenging to come by funding. However, some planning, determination, and creativity can help you get the money you need to kick off your startup.

This guide will explore 13 ways to fund a startup and explain how to go about getting the financing.

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Considering Types of Startup Business Funding

There are two broad categories of startup financing available to businesses — debt financing and equity financing.

Debt financing involves borrowing money to fund anything from working capital to equipment or inventory. The borrower is liable for repaying this debt and may be charged interest. Although collateral may be required for certain forms of debt financing, the borrower retains ownership of the business (as long as the debt is repaid).

The other method for raising funds is equity financing. By selling equity to investors, startup businesses may be able to obtain the capital they need to launch or expand.

Equity financing doesn’t involve the same debt repayment, though it does mean giving up some ownership of the company. That means that it may be helpful in establishing a positive cash flow for the business as quickly as possible. Emerging startups with large working capital needs might prefer forms of equity financing that let them grow quickly.

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13 Types of Funding for Startups

Securing funding is a critical step for startups looking to launch and grow their businesses. From traditional loans to innovative crowdfunding platforms, here are 13 types of funding options for entrepreneurs.

1. SBA Loans

The Small Business Administration (SBA) is a federal agency that partners with lenders such as banks and microlending institutions to provide SBA loans to startups and small businesses. Instead of directly lending to the businesses, the SBA guarantees a portion of the loan, which lets startup businesses access loans with more competitive rates and repayment terms.

SBA Microloans

SBA microloans are available for funding options for startups. This program is administered through nonprofit lending organizations, which can provide up to $50,000 in startup microloan funding for working capital, supplies, furniture, equipment, and machinery.

To receive SBA microloan financing, startup owners may have to participate in training and planning activities designed to help them launch their business ventures. This extra support might help accelerate the funding process and increase the chances of success.

7(a) Loans

SBA 7(a) loans are versatile, government-backed loans designed to help small businesses with funding needs like working capital, equipment, or real estate. Offering up to $5 million with competitive interest rates, these loans require strong financial documentation, a credit score of 680 or higher, and a clear repayment plan​.

504 Loans

By way of contrast, SBA 504 loans are long-term, fixed-rate financing options designed for small businesses to purchase or improve fixed assets like real estate and equipment. These loans provide up to $5.5 million, promoting business growth while supporting job creation in local communities.

2. Merchant Cash Advance

Instead of taking out a loan, you might want to consider a merchant cash advance (MCA), which can help startup businesses gain quick access to capital. For an MCA, you exchange a portion of your business’s future sales for a cash advance.

Rather than charging interest as a percentage, MCAs utilize a factor rate — expressed as a decimal figure — to calculate repayment. For example, a $5,000 MCA with a factor rate of 1.3 will total $6,500 in payments made through future sales ($5,000 x 1.3 = $6,500). MCA repayment plans may use a fixed schedule or withdraw a percentage of your startup’s sales.

Criteria for MCA approval can differ from those required for traditional debt financing methods. Generally, MCA companies place more weight on business performance than on an applicant’s credit score. This accessibility can come at a cost, though, so other options may make more financial sense unless funding is needed right away.

3. Equipment Financing

Businesses in need of costly technology or machinery may be able to use equipment financing as a funding stream for their venture.

Equipment financing has some advantages as a funding option for startups.

For starters, equipment can usually act as collateral to help a business qualify and secure a lower interest rate for the loan. This is potentially useful for applicants who have faced obstacles to other financing due to limited assets and/or time in business.

Equipment financing might require a down payment, but typically, it lets startups hold onto more working capital than some other financing types. With more cash in hand, businesses can make key purchases and pursue other financing methods if needed.

When assessing equipment financing options, it’s important to compare how the repayment term and the equipment’s useful life line up. Otherwise, startups run the risk of eventually having to make payments on equipment that’s no longer being used.

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4. Business Line of Credit

For quick access to flexible working capital, a business line of credit could be a useful funding mechanism.

A line of credit gives you access to an amount of funding with a maximum established by the lender. Once secured, the line of credit acts like a revolving fund that your startup business can draw from for a variety of purposes, as long as the amount you spend stays below the credit limit.

Besides this flexibility, a line of credit can help startups establish a credit history without accumulating significant debt. Unlike conventional loans, for a line of credit, interest is only charged on the amount owed at any given time. Repaying the borrowed amount replenishes the line of credit so that it can be used again at a later date.

5. Grants

Small business grants are awards given by a government agency, foundation, nonprofit, or other entity. In most cases, they don’t have to be repaid. Small business grants may come with guidelines about how the money must be used, though these terms typically have some flexibility.

For federal grant opportunities, Grants.gov and Challenge.gov are good places to begin searching.

Grants may be sector- or demographic-specific in their focus. Here are some examples:

•  Small Business Innovation Research (SBIR) Program: These grants provide funding to encourage businesses to undertake research and development for the federal government.

•  Amber Grant: This program awards three $10,000 grants to women-owned small businesses every month.

•  Street Shares Foundation: This group awards three grants between $4,000 and $15,000 to startups or small businesses owned by veterans or their spouses.

•  USDA: The agency offers multiple grant programs for rural startup businesses.

Since grants don’t involve debt or transferring equity, they’re highly coveted by startup businesses. This fact, added to the fact that most grants are geared towards existing businesses, makes grants a more difficult funding source to obtain.

6. Crowdfunding

Rather than taking on debt or giving up equity, startups can launch a crowdfunding campaign to raise money.

Crowdfunding initiatives can widely vary in structure and funding goals. To attract financial backers and raise awareness, a campaign might host a promotional event or offer complementary products in exchange for financial contributions. Some startups may choose to simply pitch their vision to garner support.

While supportive family members and friends may be a logical audience to start with, utilizing online platforms can expand your startup’s reach.

Keep in mind that platforms like KickStarter often take a percentage of the total funds raised or employ a competitive vetting process, like SeedInvest. It’s helpful to weigh how much time to spend on a crowdfunding campaign versus the expected reward.

7. Angel Investors

An angel investor is a high-net-worth individual who seeks to increase his or her wealth through strategic investments in startups and business ventures. Depending on the nature of the relationship, an angel investor’s financial support may come as a one-time investment or as ongoing funding.

Generally, funding and mentorship from an angel investor is given in exchange for ownership equity. This support can be critical during a startup’s early growth phase.

Entrepreneurs may find an angel investor among their own family, friends, or professional circle. Joining a business incubator or accelerator is another way to gain mentorship and meet potential benefactors.

Preparing a thought-out business plan and coming in with a valuation for the ownership percentage could help you seal the deal.

8. Invoice Financing or Factoring

The common thread of invoice factoring and financing is that both let you use your company’s invoices to secure a cash advance and free up cash flow.

With invoice factoring, a lender buys your selected outstanding invoices and advances you the full invoice amount, minus a fee. That lender then is in charge of collecting the money. Instead of incurring new debt via bank loans or lines of credit, you are submitting your unpaid invoices for financing based on the strength of the customers’ credit.

As for invoice financing, you are more in control of the clients’ invoices. You use those invoices as collateral in order to receive a lump sum of financing before they’re paid. Usually, you’ll receive between 80% and 90% of the invoices total face value upfront. Once the invoice is paid, you’ll receive the remaining balance, minus any fees charged by the lender.

9. Friends and Family Loans

When trying to figure out how to fund a startup, many entrepreneurs turn to financing from their close relationships. But it’s important to get this right — or else you could end up with resentful, angry friends and family.

It’s best to present your case with the aim of helping them understand why you need the money. Keep your pitch professional. Give them detailed information on how you’ll use the money, the time it will take you to repay them in full, and the amount that you’ll pay in interest.

Very important: Have a written agreement ready that explains all the loan details before you approach your friend or relative. Before that person disburses the funds to you, you should both sign the agreement to seal the deal.

10. Personal Savings

Roughly 78% of startup financing comes from personal savings, according to a SCORE survey of 1,000 small business startups.

The biggest advantage to self-funding is control. The fruits of your sales and investment come directly to you, and you won’t be tugged into a direction you don’t believe in because of an insistent investor.

But of course self-financing is expensive. Some people find they make serious lifestyle changes to fuel their startup goal. If the small business owner has a “day job” as well, that job may suffer from divided priorities.

Moreover, if you’re using your own money to cover production costs of a specific service or product, a large order can be too much to handle, and growth opportunities might be missed.

11. Venture Capital

Venture capital (VC) is a popular choice for startup financing options. It’s a way to secure the capital business owners need to grow, with the extra advantage of tapping experienced industry contacts for mentoring and advice. Venture capital for startups can be an exciting opportunity.

Just remember that taking on venture capital should be a partnership between your startup and the firm, and since the relationship is one that may last for years, you need it to be a good fit.

12. Small Business Loans

Another option for funding is a small business loan from a bank, credit union, or online lender. Small business loans for startups offer a vital lifeline for entrepreneurs seeking to launch or grow their ventures.

However, startups often face stricter requirements for small business loans, such as a strong credit score, a detailed business plan, and sometimes personal guarantees or collateral.

Recommended: 15 Types of Business Loans to Consider

13. Peer-to-Peer Lending

Peer-to-peer lending programs eliminate the bank as a middleman, allowing borrowers and lenders to connect via online platforms. For many borrowers, this financing offers faster approval. For investors, it can be an opportunity to support businesses they are passionate about.

Getting Funding for a Startup

On average, 4.7 million small businesses are started every year in the United States — and 20% of them fail in their first year. Having a plan for startup financing options could make the difference by helping you survive year one and grow your startup into a successful business venture.

The process of obtaining funding can vary depending on what type of funding you’re interested in and what the prospective source is. However, the information you should be ready to provide includes:

•  How long you’ve been in business

•  Your projected annual revenue

•  Your personal credit score

•  Your business plan

•  What industry you’re in

Since many startups have less revenue and experience to demonstrate to lenders and investors, personal creditworthiness and finances can factor into the funding equation. An entrepreneur could choose to leverage his or her personal credit to qualify for financing. And having a solid business plan to show potential lenders that you have a good roadmap is also a practical idea.

Recommended: What Are the 5 Stages of Business Growth?

The Takeaway

There are many startup financing options, including SBA loans, merchant cash advances, business lines of credit, and traditional business term loans. Small business funding can give your small business the boost it needs to cover startup costs, expand operations, purchase inventory, hire staff, or invest in marketing strategies, helping you achieve your growth and profitability goals.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

Is there a type of funding that is best for startups?

More than 70% of small businesses get started with personal savings. As for other funding sources, small businesses may turn to angel investors, business credit cards, or small business loans.

Where can you look for funding for your startup?

You can look for startup funding from personal savings, friends and family, angel investors, venture capital firms, crowdfunding platforms, and small business loans.

What is bootstrap funding in startups?

Bootstrap funding in startups involves using personal savings, reinvested profits, or minimal external resources to fund business operations. This approach allows entrepreneurs to maintain full control of their ventures, avoid debt, and focus on organic growth.

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Photo credit: iStock/Drazen_

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOSMB-Q424-071

If you own a small business, the line between personal credit and business credit may seem blurred, since you and the business are essentially one and the same.

But it can be wise to keep your personal and business credit as separate as possible. This can make it easier to qualify for business financing, and also protect your personal finances and assets should your business experience any financial struggles.

Read on to learn the difference between business and personal credit, how one type of credit can affect the other, and how to develop two strong (but separate) credit histories — one for yourself and one for your business.

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What Is Business Credit vs Personal Credit?

Your personal credit score and business credit score are two distinct but related numbers that tell lenders how creditworthy you, or your business, are.

Your personal credit is connected to you by your Social Security number and relates to your personal financial history. If you’ve ever applied for a car loan or home mortgage, lenders have looked at your personal credit scores to determine how financially responsible you are and what sort of risk you present as a borrower.

Your business credit, on the other hand, is linked to you by your federal Employer Identification Number (EIN), which is how the government recognizes your business for tax purposes.

Technically, you don’t need an EIN if you’re a sole proprietor. However, you will need to get one
if you want to establish business credit.

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Business Credit Score

Business credit works much the same as personal credit, except that it looks at the financial responsibility of your company, not you personally. Any small business loan or business credit card you have may impact your business credit report and score.

You have three primary business credit risk scores:

•  Dun & Bradstreet® PAYDEX® Score

•  Equifax® Commercial Risk Scores and Indicators

•  Experian® Intelliscore Plus℠

Every business credit scoring model has its own algorithm for calculating your business credit score. Business credit bureaus will typically look at your company’s:

•  Current debt

•  Payment habits

•  Available credit

•  Trade credit

•  Liens and bankruptcy filings

•  Time in business

•  Type of industry

Personal Credit Score

There are three nationwide consumer reporting agencies that can provide you with your personal credit report:

•  Equifax

•  Experian

•  TransUnion®

Your FICO® score and VantageScore® are generally based on the following information in your personal credit report:

•  Payment history

•  Total debt owed

•  Credit utilization (percentage of credit available that is currently being used)

•  Length of credit history

•  Types of credit (e.g., credit cards vs. loans)

•  New or recent credit

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How Do Business Credit Scores Work?

Your business credit scores are an indication of how well you manage your business’s finances. A low business credit score might indicate that you have made some poor financial decisions in the past, and that might make a lender wary of approving a loan for your business. On the other hand, good credit scores may indicate you know how to manage your money, which means the risk in lending to your business is low.

Here are some of the typical business credit scores:

•  Dun & Bradstreet PAYDEX Score: This business credit score ranges from 1 to 100, where a higher number represents a greater likelihood that a business will pay its debts on time.

•  Equifax Payment Index (PI) Score: This business credit score ranges from 0 to 100, with 100 being the best score reflecting excellent habits of paying bills when due and 1 being the worst PI score.

•  Experian Intelliscore Plus V3: This business credit score ranges from 300–850, where a higher number represents a lower risk of severe delinquency or bankruptcy in the next 24 months.

Good credit is an asset to any business. It can help with securing credit cards, different types of small business loans, and commercial leases, as well as help you negotiate better terms with vendors. In addition, a good business credit score can prevent you from having to put your personal assets or creditworthiness on the line to secure a loan or credit card.

How Do Personal Credit Scores Work?

Your personal credit scores are an indication of how well you manage your personal finances. When you take out your first credit card or get a loan to pay for college, you begin your personal credit history and start building your credit score from that point on.

Your personal credit score will typically be a number in the 300–850 range, with 850 being a “perfect” score. If you pay your bills on time, have a mix of credit (such as different credit cards, a car loan, and a mortgage), don’t use a lot of your available credit at any one time, and avoid financial setbacks (like a foreclosure), you will likely build a strong credit profile and score.

However, if you consistently carry a credit card balance, skip bill payments or pay them late, don’t develop a diverse mix of credit sources, and/or rack up many “hard inquiries” on your credit report (which occurs when you apply for a new source of credit), your score will likely be on the lower end.

Recommended: What Factors Affect Your Credit Score?

Why You Need Business Credit

Establishing business credit can help you access capital for growing your small or medium-sized enterprise. It can be difficult to borrow small business loans if you lack business credit vs. personal credit.

You may need business credit if you’re looking to separate your personal finances from your commercial finances. Having business credit helps you avoid personal liability for your business’s debts.

Here are some points to keep in mind:

•  You might need good credit scores for business loans

•  You can apply for business credit cards without a business

•  Some lenders offer no credit check business loans

Key Differences Between Business and Personal Credit

In many ways, business credit vs. personal credit scoring models are alike: They tell lenders if you are a good bet to repay your debts, which can influence their decision to extend you credit at all, and at what terms.

However, there are also plenty of ways in which personal vs. business credit scores differ. The obvious one is that one score reflects your personal financial history, while the other reflects your business dealings. Here are some other key differences between business and personal credit scores:

Credit Corrections

Credit bureaus sometimes make mistakes, and it’s possible for incorrect information to show up on your credit reports. For personal credit reports, there are protections in place that allow you to challenge any false information on your report. By law, the credit agency must respond to your request.

With a business credit report, there are no such statutory protections in place. The issuer is generally not required to respond to any challenges you make about your business credit report. This means if you discover errors in your report, you could have a much tougher time disputing your business credit report.

For this reason, it’s a good idea to keep close tabs on your business credit reports and make sure all the information is accurate. This can make it easier to get the problem resolved.

Transfers

While your personal credit report stays with you for life, your business credit report will stay with the business. Even though that report is based on the transactions you made as owner, if you were to sell your business, the credit report would transfer to the new owner. For this reason, a business tends to be more valuable if its credit score is high.

Capacity

Capacity refers to the ability of a borrower to generate revenues to pay back a loan, and is something lenders consider when you apply for a small business loan. Businesses generally have much greater capacity for credit than individuals, no matter how good their personal credit.

Lenders may offer online personal loans up to $100K and online business loans up to $5 million. In order to maximize your company’s potential for funding, you’ll want to build and maintain your business credit.

The below table highlights some of the differences between business credit vs. personal credit:

Recommended: Line of Credit vs. Credit Card

Pros and Cons of Keeping Personal and Business Credit Scores Separate

If you own a small business and don’t plan on taking out loans in the million dollar range, you may wonder if you really need to build two credit profiles. Here’s a look at the pros and cons of keeping your business credit vs. personal credit separate:

Pros

•  If your personal credit is weak, establishing good business credit can help you qualify for loans you wouldn’t otherwise be able to get

•  Many lenders require you to have both personal and business credit scores in order to qualify for financing

•  Having business credit helps you avoid personal liability for your business’s debts

Cons

•  There are fewer legal protections for business credit, which can make it more difficult to get any mistakes on your credit report corrected

•  If you sign a personal guarantee for a business loan, you’ll still be personally responsible, even if you have worked to establish separate business and personal credit

•  Business credit card delinquencies can damage your personal credit scores

6 Tips for Keeping Personal and Business Credit Scores Separate

Here are some simple things you can do to separate business credit from personal credit:

1. Open Credit Lines With Vendors

Trade credit works a bit like a credit card — you can purchase office supplies and equipment on credit, then pay it off over one or more months. Each on-time payment will likely be reported to the business credit bureau(s), and that can contribute to building your company’s credit history and profile.

2. Choose Your Business Structure Carefully

If you operate your business as a sole proprietorship, there’s really no division between you and the business. In the eyes of the IRS and lenders, you are one and the same. Should your business not be able to pay off a loan, your personal assets could be seized to cover the debt.

Recommended: Sole Proprietorship vs. LLC: How to Choose

3. Create a Business Credit File

You’re not automatically given a business credit profile. You can wait until (hopefully) a creditor reports your business credit activity to one of the bureaus, or you can be proactive and open a business credit file with one or all three of the business credit bureaus.

Operating as a corporation or LLC creates a separate business entity. Your personal assets are protected, and, unless you sign a personal guarantee, they cannot be used to pay for the business debt.

4. Open a Separate Business Bank Account

If you’ve been using your personal checking account to cover business expenses, you may want to consider getting away from that practice. Opening a separate business checking account (using your business’s EIN) can help you build your business credit profile and will also make it easier to track business expenses in your accounting software.

5. Apply for a Small Loan

Even if you don’t need to take out financing right now, you may want to apply for a small loan to establish business credit. Lenders may look at your personal credit, annual business revenue, and time in business to make sure you qualify for a loan. Repaying that loan on time can help you start building a solid — and separate — business credit profile.

6. Get a Business Credit Card

If you use a business credit card (instead of your personal credit card) to pay business expenses, it will be easier to keep business and personal spending separate. And, if you pay at least the minimum (and ideally more) each month, it can help build credit for your business.

How Can Personal and Business Credit Affect Each Other?

Even if you keep your business and personal credit separate, there are times when they may overlap. For example, in some cases, your business credit cards can affect your personal credit.

The reason is that some (though not all) business credit card issuers will report some of your business credit card activity to the consumer credit bureaus, and not just to the commercial credit bureaus.

If your business credit card behavior makes its way to your personal credit report, it will affect your credit score in the same way as other credit cards do. Any missed payments could negatively impact your credit, as will a high credit utilization rate. If you’re concerned about this, you can ask the issuer if they report to the consumer credit bureaus before you apply for the card.

In addition, applying for a business loan (or credit card) might temporarily impact your personal credit score. If the lender wants to look at your personal credit scores to determine whether to approve you or not, you may see the loan or credit card appear as a hard inquiry on your personal credit report, which could briefly depress your score.

Finally, if you sign a personal guarantee for a business loan, you will be on the hook for making payments if your business can’t. If you then miss any of those payments or default on the loan, it will be reflected in your personal credit report. A good rule of thumb to keep in mind: If you can avoid giving your Social Security number (and hence, access to your personal credit history) for business purposes, that will help keep the two separate.

The Takeaway

For simplicity’s sake, many small business owners use personal credit to run their business. However, doing this could put your personal finances at risk if your business is ever in trouble. Plus, many creditors and lenders these days don’t want to rely on personal credit alone when judging a business’s financial health — they want to see your business credit history as well.

Your business and personal credit profile may overlap as a small business owner. But understanding how your business impacts your personal finances, and vice versa, can help you protect both types of credit.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

Is business credit the same as personal credit?

Business credit and personal credit are different. Business credit looks at financial activities your business has had, such as taking out business loans or making business credit card transactions. Personal credit looks at personal financial activities, such as student loans, consumer credit cards, and mortgage home loans.

Does business credit go on a personal credit report?

Business credit in some cases may go on your personal credit report. Creditors, for example, may report negative business credit activity to consumer reporting agencies. Having a history of late payments or serious delinquency with your business credit accounts may appear on your personal credit report as a derogatory mark.

How can I build my business credit?

You can build your business credit by taking out financing, trade credit, or a business credit card and then making on-time payments each month.

Is it better to build business credit or personal credit?

Your personal circumstances may dictate whether it’s right for you to prioritize business credit over your personal credit. Building business credit may be right for you if you’re looking to grow or expand your small or medium-sized enterprise. Building personal credit may be right for you if you need consumer loans for personal, family, or household purposes.

Photo credit: iStock/skynesher

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOSMB-Q424-070

One of the most important tasks of running a small business is being mindful about how you’re spending the money that you make. To do so, having a small business budget is crucial. By monitoring your income and your expenses and setting parameters for what you spend, you may be able to ensure that you’ll have enough money to grow your business.

Knowing how to create a budget for your small business can help you at every stage in its development, whether you’re exploring the cost to start a business, looking to trim expenses during a slow period, or considering ways to expand your company.

Keep reading to learn what a business budget is, why you need one, and how to create a small business budget.

What Is a Business Budget, and Why Do You Need One?

A business budget accounts for all the income and expenses your business expects to have over a month, quarter, or year. It may not be precise, since your revenues may fluctuate from month to month, but it’s a good guide for where your business needs to be.

Having a business budget can help ensure that you don’t spend more than your business brings in, and it can be helpful if you want to build a financial safety net in case of an emergency. Additionally, if you are looking for investor funding, potential investors may be interested in seeing your budget as well as other financial statements from your business.

Recommended: 10 Steps for Starting a Small Business

How to Create a Small Business Budget

Small business budgeting isn’t particularly difficult, but if you haven’t created a budget before, you might need a little guidance. As an example, let’s imagine you’re running a small children’s bookstore.

1. List Your Revenue and Expenses

Your business budget starts with figuring out what you’re bringing in and what you’re spending.

Estimate Revenue

Start by looking at your monthly revenues. If these fluctuate, you can take an average, though you may be better off budgeting on the lower end of that range. That way, you’re building your small business budgeting around a revenue number you feel secure that you can hit. You may bring in more some months, and that can go toward your savings.

Let’s say your bookstore’s revenues range from $15,000 to $25,000 a month. In this example, we could average your monthly revenues, but let’s be conservative and use $15,000 as your monthly revenue. That way, your spending budget should never exceed what you bring in.

List Your Fixed Costs

Now let’s move on to your business expenses. You likely have two kinds of business expenses: fixed and variable.

Start by going through your bank statements to identify fixed costs. These are expenses that recur at predictable or set amounts. They might include:

•   Commercial mortgage or rent payments

•   Internet and phone services

•   Software subscriptions

•   Insurance

•   Salaries

These will need to be included as-is in your budget.

In the bookstore example, your fixed costs might include monthly payments for rent, internet and phone service, employee wages, and yearly payments for insurance and software subscriptions.

Estimate Your Variable Costs

Next, let’s consider variable costs, which can be different amounts from month to month. These may include expenses like:

•   Raw materials

•   Inventory

•   Utilities

•   Sales commissions

•   One-off expenses like a new computer

For your bookstore, that might include your book purchases, electricity bills, and heat and air-conditioning costs, for instance.

Because you won’t know exactly how much these variable costs will be each month, set a budget for each that’s on the high end of what you expect. In the bookstore example, if your utilities range from $175 to $300, budget for $300.

Once you’ve listed your revenues and both fixed and variable expenses, you have the makings of a business budget.

Recommended: How Do You Categorize Expenses for a Small Business?

2. Identify Goals to Save for

Compare your revenues against your total expenses (fixed and variable) for a specific period of time (like a quarter or a year). This can give you a sense of how much money you have left over to play with. You’ll use this “extra” money for this tip and the next.

In addition to the expenses you’ve already listed, you may have goals you want to save for, too, like a down payment on a larger office space or a new, costly piece of equipment. For your children’s bookstore, perhaps you’d like to add another employee so you can expand your hours or build out an under-utilized space to start selling games, as well. These goals should also go into your budget.

3. Plan for an Emergency Fund

You should also budget for an emergency fund. Even putting aside a few hundred dollars a month can help you build up a cushion you may need down the road. If, for example, your computer’s hard drive crashes and you need a quick replacement, that money could come in handy. Or, if that imaginary bookstore experiences an unexpected slump during the summer, having a reserve can help you pull through without going into debt.

Some experts recommend maintaining a fund of somewhere between three and six months’ worth of expenses, but different businesses may find that different amounts work for them.

Now that you know how much “extra” money you have after budgeting for all your expenses, you can decide how to allocate it among your goals and emergency fund. You may also want to open a business savings account so you can earn interest as you save.

4. Find Ways to Save

Look for sensible ways to reduce your expenses, such as:

•   Negotiating a better price with your vendors

•   Shopping for better pricing with new vendors

•   Cutting out unnecessary subscriptions

•   Shifting some staff to remote work and reducing office space

•   Investing in energy-efficient appliances

Perhaps your bookstore can find a wholesaler that charges you less for your stock. Or you might be able to save money by getting your phone and internet service from the same provider.

Whatever steps you take, once you find ways to save, you can re-allocate those savings elsewhere within your budget.

5. Get Clients to Pay Faster

To be effective, your budget relies upon money you’re owed actually coming in. Keep cash flowing in by creating a payment policy. This will outline when you expect payments to be made on invoices, and whether there are any late fees clients will have to pay if they don’t hit that deadline. This can be a great way to motivate slow-paying clients. Another option is to offer a discount if clients pay their invoices early.

If that imaginary bookstore is providing bulk orders to, say, a kindergarten, having a policy like this in place can help make sure you’ll get the money due to you and have a better sense of when to expect it.

Recommended: What Is Trade Credit?

6. Get Your Business Accounting on Track

Not everyone feels comfortable with budgeting, but there are numerous ways to keep it easy and effective. Consider some of these ideas to make sure that staying on top of your small business finances isn’t a chore or a challenge.

Use Business Budgeting Software

Gone are the days of managing your business budget in an actual paper ledger or even in a spreadsheet. There are great small business budgeting software programs and budget calculators that can track your expenses and help you keep an eye on where you’re spending money. Most will connect with your business bank account to download transactions and categorize them automatically.

Educate Yourself on Accounting

Terms like financial ratios or balance sheets might give you a headache, but as a business owner, it’s in your best interest to have at least a rudimentary understanding of accounting. Knowing where your money is going and having a strategy about where you’ll spend it in the future are a good start.

Hire Help if You Need It

While, yes, you need to understand your small business accounting, that doesn’t mean you have to struggle with managing it if you don’t have the time or energy. You can hire an accountant or bookkeeper, either full-time or on an as-needed basis, to manage your accounts, pay invoices, and file your taxes.

It may be well worth the expense to have a professional handling your finances if you’re not comfortable doing it yourself.

6. Be Smart About Financing

Having a business budget doesn’t mean you always need to pay cash for expenses, but you do need to be smart about any financing you consider. You may want to explore startup funding options if you’re just starting out, or loans for small businesses if you’re ready to expand.

You may also want to consider a business credit card with rewards. That allows you to earn points you can redeem for cash back, travel, and other perks when you use the card for business expenses. As an owner of an imaginary bookstore, you might be able to use those miles to fly to trade shows or book festivals around the country, for example.

But before you apply for financing, have a plan (and yes, a budget) for how you’re going to spend the money. Your investment should net you more revenue or the ability to serve more customers. If it won’t, it may not be worth the expense of paying the interest on the loan.

Before your business takes on any kind of financing, consider shopping around to see what sort of credit terms you qualify for. The better your personal and business credit scores, the lower the interest rates you will probably be able to get. If your credit is less than stellar, you may pay quite a high rate for financing.

Recommended: What Is the Minimum Credit Score for a Business Loan?

The Takeaway

Having a small business budget allows you to think long-term about how you want to grow your business. By keeping a keen eye on where you’re spending money (and working to reduce unnecessary costs), you can gain the ability to save for those goals that will take your company to the next level.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

How do you create a small business budget for your business?

To create a small business budget, start by identifying all income sources and categorizing fixed and variable expenses. Analyze past financial data, set realistic revenue and expense projections, and allocate funds for contingencies. Use budgeting tools or software for accuracy, and review the budget regularly to adapt to business changes.

What is the budget rule for small businesses?

The budget rule for small businesses often follows the 50/30/20 principle: allocate 50% of revenue to operating expenses, 30% to growth and reinvestment, and 20% to savings or debt repayment. This framework ensures balanced spending while maintaining financial stability and supporting long-term business goals.

What is the average budget of a small business?

The average budget of a small business varies widely depending on its size, industry, and location, typically ranging from $10,000 to $50,000 for startups. Established small businesses may have higher budgets, often aligning their spending with operational costs, growth initiatives, and revenue expectations.

💡 Recommended: What Is Growth Equity

Photo credit: iStock/Eva-Katalin

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOSMB-Q424-067

If you’re considering selling or buying a business, something you need to pay attention to is working capital. As a seller, you want to maximize the working capital you have on your balance sheet to make your business appealing. As a buyer, you want to make sure you understand how much of the working capital that’s listed on the balance sheet will be yours once the sale goes through.

To that end, understanding working capital adjustment may come in handy. Keep reading to learn more on working capital adjustment, when they occur, the working capital adjustment formula, and more.

What Is Working Capital Adjustment?

Working capital adjustment is used to reconcile the working capital levels of a business at a specific point in time, often during transactions like mergers or acquisitions. It ensures that the actual working capital at closing aligns with the target working capital agreed upon by both parties.

Working capital, the difference between current assets and current liabilities, is essential for daily operations, and any significant deviation from the expected level can impact a business’s liquidity and functionality. Working capital adjustments account for these variations, ensuring fairness and accuracy in the financial valuation of the business being bought or sold.

Recommended: Change in Net Working Capital, Explained

When Do Working Capital Adjustments Occur?

A working capital adjustment needs to be a part of the negotiation conversation from the start. Both the buyer and seller need to be clear on which, if any, assets on the balance sheet will be transferred to the new owner. Because working capital factors into the valuation of the company, removing some or part of it from the equation likely will create a change in the valuation if that number is significant.

If the seller plans to take a large amount of the working capital to cover expenses, the buyer may need to explore different types of business loans to fund the working capital budget to ensure there’s enough money for the business to operate. Another important discussion between the buyer and seller is on how much it costs to operate the business over a given period of time. This way, the buyer has an understanding of how much working capital should be negotiated to keep.

If working capital fluctuates drastically, the actual adjustment may not happen until closing. However, the buyer and seller need to agree on how the adjustment will occur early on. This could be a dollar-for-dollar adjustment that reduces the selling price by the amount of working capital that the seller retains or spends. It could be a de minimus or capped adjustment, where adjustments are only made up to a specified level. Whatever the adjustment strategy, this needs to be agreed upon early.

Recommended: Business Cash Management, Explained

Working Capital Adjustment Formula

While the formula for working capital itself is simply current assets minus liabilities, to calculate the working capital adjustment, the buyer and seller need to agree on a working capital target. Let’s dive deeper.

Working Capital Targets

Working capital targets are an estimate of the amount of working capital that will be available at closing on the sale of the business. This amount should be sufficient to operate the business for a specified period of time.

Any amount over or under this target will need to be paid either to the buyer or the seller, accordingly.

Working Capital Adjustment Example

Let’s say the balance sheet on January 1 — when the business goes up for sale — shows working capital of $500,000. This is appealing to an investor. But on February 15, the company used $400,000 of that to pay debts. The seller might believe she’s acquiring a company with half a million in working capital, when that’s not true.

By including a working capital adjustment in the negotiation of the sale of the business, the buyer can be protected from a loss like this. The buyer can insist that the valuation be reduced, based on the fact that $400,000 is now gone from the company.

Likewise, if the company suddenly comes into an extra $300,000 between the listing of the business and the purchase, that might increase the initial valuation and thus the selling price. If the price were to increase at the last minute, the buyer might have to take out an additional business working capital loan to purchase the company, or the agreement might be for the seller to take the extra working capital.

Having a working capital adjustment eliminates unexpected surprises like these and instills trust between the buyer and seller.

Recommended: How to Read Financial Statements: The Basics

Pros and Cons of Working Capital Adjustment

Understanding how working capital adjustment affects the sale of a business is important, as is looking at both the benefits and drawbacks.

💡 Recommended: Small Business Tax Tips

Pros

It’s in a seller’s interest to have the highest possible value for a company that’s for sale, but without a working capital adjustment, the buyer could pay more than the actual value of the business after working capital is removed. The adjustment remedies this issue.

It also fosters healthy communication during the negotiation process, as well as provides transparency. And with the working capital adjustment, the seller is assured to have enough capital to run the business without having to take out a loan.

Cons

The seller may have visions of taking out a chunk of working capital to cover debts or pay himself once the deal goes through, but a working capital adjustment prevents this from happening. If a sizable amount of working capital is removed from the balance sheet, the business valuation may go down, and therefore the business may be sold for less than the asking price.

Finally, agreeing on a working capital adjustment may take time in the negotiation process, which may slow down the sale.

Recommended: 6 Step Guide to Getting a Small Business Loan

The Takeaway

Including a working capital adjustment in the negotiation of the sale of a business protects the seller from overpaying for the company and creates clear communication between the buyer and seller. Start the conversation about working capital adjustment early, and be willing to negotiate to find a happy medium for both the buyer and seller.

If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.

FAQ

What is the point of working capital adjustments?

The point of working capital adjustments is to ensure fairness in business transactions by reconciling the actual working capital at closing with the target amount agreed upon by both parties.

Is working capital added to the purchase price?

Working capital is typically factored into the purchase price through a target working capital amount agreed upon during negotiations. Any deviations from this target at closing may result in a working capital adjustment, either increasing or decreasing the final purchase price to ensure fairness.

Does negative working capital adjustment exist?

Yes, negative working capital adjustment exists and occurs when the actual working capital at closing is lower than the agreed-upon target working capital. In this case, the purchase price is reduced to account for the shortfall, ensuring the buyer does not overpay for the business.

Photo credit: iStock/Delmaine Donson

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOSMB-Q424-066