Running a business means juggling cash flow, unexpected expenses, and sometimes mounting debt. When business credit cards max out and vendor payments pile up, you need relief fast. Best Egg loans have become a popular option for business owners looking to tackle debt or fund operations.
But here’s the reality: Best Egg doesn’t actually offer business loans. They only provide personal loans. So how can a personal loan help with business debt? And more importantly, is a new loan the best way to manage business debt, or are there better options?
What Are Best Egg Loans?
Best Egg is an online lender that offers personal loans between $2,000 and $50,000. They’ve been around since 2014 and focus on providing quick funding to borrowers with good to excellent credit.
Their loans come with fixed interest rates ranging from about 5.99% to 29.99%. Loan terms run from 3 to 5 years, and you get predictable monthly payments throughout the life of the loan.
The application process is entirely online. Best Egg loans can fund as quickly as one business day after approval, which appeals to borrowers who need money fast.
You’re adding another monthly payment to an already strained budget, essentially.
Risks of Using Personal Loans for Business Expenses
Many entrepreneurs use personal loans to fund business needs, especially when traditional business financing isn’t available. This happens more often for businesses that can’t qualify for proper business loans.
Business owners consider personal loans because:
- Faster approval process (compared to business loans)
- Less paperwork is required
- No need to provide detailed business financial statements
- Desperation when other options seem unavailable
But using personal loans for business debt creates a dangerous precedent. You’re mixing personal and business finances, and that puts your personal assets at risk for business problems.
When you use a Best Egg loan for business debt, you become personally liable for repayment regardless of how your business performs. Mixing personal and business finances can complicate repayment if your business struggles.
What You’re Really Signing Up For W/ Best Egg
Getting a Best Egg loan might seem straightforward, but there are many reasons why it isn’t ideal for struggling businesses:
You’ll need:
- Credit score of at least 600 (preferably 700+)
- Minimum annual income of $100,000 in most states
- Debt-to-income ratio under 50%
- Proof of steady employment or income
Look, if your business is struggling with debt, your personal finances are likely affected too. That high-income requirement excludes many small business owners who need help most.
The Real Cost of Best Egg Loans
Your interest rate depends on your credit score and income. Here’s what to expect:
Excellent credit (750+): 5.99% – 12.99% Good credit (700-749): 13.99% – 19.99%
Fair credit (650-699): 20.99% – 26.99% Poor credit (600-649): 27.99% – 29.99%
Let’s look at a real example: You borrow $25,000 at 15% for 5 years to pay off business debt.
- Monthly payment: $594
- Total paid over 5 years: $35,640
- Total interest: $10,640
You’ve added $594 monthly to your expenses without reducing your original debt burden, moving debt around, and adding interest costs.
Best Egg Loans Can Create More Problems
Consider this scenario: Mike owns a small restaurant struggling with $30,000 in various business debts. He takes out a $30,000 Best Egg loan to pay them off.
Now Mike has:
- The same $30,000 debt (just to a different lender)
- $594 monthly payments for 5 years
- Personal liability for business debt
- No improvement to his restaurant’s cash flow problems
Six months later, his restaurant is still struggling. Now he has business cash flow issues AND a personal loan payment he can’t afford.
Don’t Think of MCA Either
Many business owners also consider Merchant Cash Advances (MCAs) when traditional loans aren’t available. MCAs provide quick cash but trap businesses in cycles of daily payments.
MCAs use factor rates instead of interest rates. A 1.5 factor rate means you pay back $1.50 for every $1 borrowed. These daily payments drain cash flow and make it extra tedious to grow your business.
Like Best Egg loans, MCAs don’t solve the underlying problem. They add to your payment obligations while your business still struggles with the same operational issues.
Better Alternatives to Best Egg Loans
Before taking on more debt with personal loans, consider these options that actually address your debt problem:
Business Debt Settlement can reduce what you owe significantly. We have professional negotiators who work with creditors to accept less than the full balance. Instead of paying $30,000 plus interest, you might settle for much less. Maybe around $20K, depending on your specific situation. You’d need to talk to someone from our team to know for sure. It’s free.
Business Debt Restructuring renegotiates your existing terms. You might get:
- Lower interest rates
- Extended repayment periods
- Reduced monthly payments
- Relief from daily MCA payments
MCA Debt Relief specifically addresses merchant cash advance problems. We can help negotiate to:
- Convert daily payments to monthly payments
- Reduce the total amount owed
- Remove you from UCC filing lists that attract more predatory lenders
Hold On, Debt Relief Might Make More Financial Sense
Note: This example represents a hypothetical scenario for illustration purposes. Individual results may vary based on specific circumstances and negotiations.
Let’s compare numbers:
Best Egg Loan approach:
- Original debt: $25,000
- Best Egg loan: $25,000 at 15% for 5 years
- Total paid: $35,640
- Monthly payment: $594
- Result: Same debt, higher total cost, personal liability
Debt settlement approach:
- Original debt: $25,000
- Negotiated settlement for a reduced amount (can be up to $12k here), depending on creditor agreements. Results vary based on creditors, balances, and circumstances
- Settlement fees: Around a quarter of the enrolled debt
- Total cost: $14,375
- Potential for significant savings compared to loans. Results vary based on creditors, balances, and circumstances.”
Debt settlement addresses the root problem: having more debt than you can handle. Personal loans just reorganizes the problem.
Debt Relief May Be Better When —
Consider debt relief instead of personal loans if you:
- Are already behind on business payments
- Have exhausted other financing options
- Face daily MCA payments draining cash flow
- Owe more than your business’s monthly revenue
- Can’t qualify for favorable loan terms
- Want to actually reduce debt, not just move it around
Making the Right Choice for Your Business
Best Egg loans might work in very specific situations:
- Your business is profitable but needs short-term cash flow help
- You have excellent credit and can get very low rates
- You’re consolidating small amounts of high-interest debt
- You have a clear plan for increased revenue
But for most struggling businesses, debt relief offers a better path forward.
Free consultations are available to assess your situation. You can learn:
- Whether your debts qualify for settlement
- Potential savings vs. taking more loans
- Timeline for becoming debt-free
- Impact on your business operations
The Bottom Line on Best Egg Loans
Best Egg loans add debt to solve a debt problem. For struggling businesses, this rarely works long-term. You end up with more monthly obligations without addressing why your business struggled in the first place.
Debt relief addresses the root cause by reducing what you owe. This frees up cash flow for business operations and growth instead of just servicing debt.
Before you sign up for another monthly payment with a Best Egg loan, consider whether reducing your existing debt makes more financial sense. Your business’s future might depend on solving the debt problem rather than just reorganizing it.
