SoFi launches small-business loans for its members

SoFi has launched small-business loans for members, extending its lending offerings to entrepreneurs and small-business owners.

The loans are designed for businesses seeking funding for equipment, inventory, and hiring. Eligible borrowers can access fixed-rate loans of up to USD $250,000, with no application fee, origination fee, or prepayment penalties.

The launch adds business lending to a platform better known for personal finance products such as borrowing, saving, spending, and investing. It also expands SoFi's reach among customers who use the app to manage their personal finances while running their own businesses.

Small business owners have faced a tougher borrowing market as higher funding costs and tighter credit conditions have made financing harder to obtain. SoFi cited survey data showing that 75% of small business owners who applied for a business loan or line of credit in the past year found it difficult to access affordable capital.

It also cited Federal Reserve research showing that more than half of borrowers chose online lenders for the speed of credit decisions or funding. That trend has helped digital lenders compete with banks, which often take longer to process smaller business loans.

Loan details

Borrowers can check eligibility within minutes and, if approved, may receive funding as soon as 24 hours later. Loan sizes range from USD $2,500 to USD $250,000, according to the product terms.

The loans have fixed payments, which could help business owners plan for payroll, stock purchases, and expansion spending. The offer is open to borrowers whose home address and primary business operating address are in the United States or US territories, subject to underwriting requirements.

Customers who do not qualify may be offered financing options from another provider through SoFi's loan marketplace. Funding times for those products vary by provider.

Target sectors

Demand has been strongest in several sectors, including construction, healthcare, and professional services, according to SoFi. Those industries often need working capital for materials, equipment, and staffing, particularly when cash flow is uneven or seasonal.

Business owners have increasingly turned to digital lenders when they need faster decisions than traditional lenders can provide. The trade-off has often been uncertainty over fees and rates, an issue SoFi is seeking to address by showing offers before acceptance and setting out pricing upfront.

Anthony Noto, Chief Executive Officer of SoFi, said the launch reflects overlap between members' personal and business financial needs. "For many of our members, their financial lives do not stop at personal goals, they also include the businesses they are building," he said.

"With SoFi Small Business Loans, we are expanding our ability to serve members in more of the moments that matter, giving them access to business financing through the same digital-first platform they already use to manage their personal finances," he added.

The launch comes as fintech groups continue to look for growth beyond their original product lines. For SoFi, which has built its brand around a broad consumer finance app, small business lending offers a way to deepen relationships with existing members while entering a segment that remains underserved by many mainstream lenders.

SoFi said it now has 14.7 million members. Its technology platform, Galileo, supports 133 million global accounts used by fintechs, financial institutions, and brands.