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Banks are best for small business loans if your business has been around for more than a year and you don't need quick cash. Approvals can take months and are far from safe, even with good credit. Banks approve only about 13% of business loan applications, according to latest data from Biz2Credit's Small Business Loan Index. That means that the bank that's right for you not only offers you the type of business loan you need, but it also funds enough loans to make financing possible.
These are the best banks for small business loans based on their commercial and industrial lending volume and product offerings, as well as alternative options to consider. Bank of America business loans are a good option if you value rewards. By meeting certain account requirements, you may qualify for interest rate discounts, no wire transfer fees and other benefits. Bank of America can also be useful for veterans and service members by offering them a 25% discount on loan administration or origination fees.
Bank of America is a preferred lender to the Small Business Administration, but is less active in issuing SBA loans. For example, Wells Fargo and US, S. Bank lends more loans 7 (a) the most common type of SBA financing. Citibank may be best known among entrepreneurs for its small business credit cards.
But the bank also offers commercial loans, although it has fewer products than other lenders. You might prefer that simplicity, but it also means you'll want to consider other lenders if Citi doesn't advertise the type of loan you want. Wells Fargo offers semi-trailer financing, commercial real estate loans and equity financing, as well as specific products for starting or buying a doctor's office. PNC Business Business Loans Best for More Mature Companies.
Typically, you must have been in business for at least three years to qualify, which is more than other banks may require. PNC is a preferred SBA lender, but the bank is less active than others issuing these loans. The bank has fewer branches than other traditional banks, including Bank of America and Wells Fargo. But if there is a branch near you, U, S.
The bank may be a good option for collateralized startups, as you may qualify for an SBA loan with less than a year in business. Most banks require you to have at least one business checking account with your institution. While you can simply open an account with some banks to meet this requirement, others want a long-term relationship. For example, you need to have a Wells Fargo account for at least 12 months to receive any type of funding.
You'll likely need a personal credit score of at least 700. Potential deal breakers could include too much debt, too many open accounts, or negative marks, such as late payments, loan defaults, and bankruptcies. The bank will check your company's credit score for similar red flags. Two years under the same property is the norm.
But there are exceptions in both directions. Bank loan products are available if you've been in business for six months, while PNC Bank generally requires at least three years of operations for you to qualify. You don't need to put in commercial guarantees, such as commercial property or equipment, to get a bank loan. Some banks offer secured and unsecured business loans.
However, the bank can finance larger amounts for secured loans, while providing longer terms and lower interest rates to make payments more affordable. Compare Multiple Lenders That Fit Your Business NMLS Consumer Access Licenses & Disclosures. SmartBiz is a connection service that works exclusively with banks. While formerly an SBA loan broker offering packaging services, SmartBiz has diversified to help small business owners find traditional bank loans as well.
These loans are not ideal, although you may end up with an interest rate between 6.99% and 24.99%. But if you want an SBA loan, this could also be a good place to start. Only preferred lender partners and packaging services can reduce response time from months to weeks. Live Oak Bank is one of the nation's most active SBA lenders.
Specializes in financing large projects, such as business expansion and acquisition. Their loan specialists have extensive experience working with a wide range of industries and can help you tailor your loan to the specific financial needs of your company. And it even offers lower rates than some SBA loan providers. But it's not ideal if you need funding for working capital or if you're looking for a quick change.
Live Oak Bank can take months. Term loans are often available through traditional banks and online lenders; however, banks may require more qualification requirements than online lenders. When you apply for a small business loan, the bank will analyze whether your business is in good shape and has enough income to support the amount you want to borrow. Some business owners choose to use their personal assets, including their homes, as collateral on a business loan.
Your commercial accountant can prepare the necessary business and tax documents to support your small business loan application and guide you in accounting and tax matters related to your business. American Express is ideal if you already have a business card and are looking for a small loan amount. While the first banks on this list are more traditional domestic banks, Live Oak Banking Company does not have any consumer lending products or physical locations. Short-term loans tend to have less paperwork than long-term loans, while equipment financing generally doesn't require as much documentation as a business line of credit.
Wells Fargo, one of the big names in business banking, has been managing financial loans for consumers and businesses for a long time. The process for obtaining a startup loan varies by financial institution and type of funding, but similar requirements are imposed by most banks and online lenders. As with personal loans, it's possible to get a small business loan with poor credit scores as low as 580. At Nav we have worked with many lenders over the years, and when it comes to traditional lenders, also known as local and national banks, they always top the list.
Business loan application and underwriting processes vary by lender, but applications can generally be completed online, over the phone, or at a branch. Term loans have a pre-set amount and a specific term to repay funds, with a monthly repayment schedule that is consistent throughout the loan term. For example, if you are denied a traditional loan, a business credit card can offer you the funds you need with less strong ratings. In addition, your business must have been in operation for a minimum of six months to one year, depending on the type of loan you apply for.