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Banks are best for small business loans if your company has been in business for more than a year and doesn’t need quick cash. Approvals can take months and are not reliable, even with good credit.
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According to the latest Biz2Credit Small Business Lending Index, banks approve only 15 percent of business loan applications.
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Biz2Credit. Biz2Credit Small Business Lending Index™ December 2022. January 12, 2023 View all resources. This is the right bank for you that will not only offer the type of business loan you need, but will also provide you with enough loans to make the financing a reality.
Here are the best banks for small business loans based on commercial and industrial lending volume and product offerings, as well as alternatives to consider.
According to S&P Global Market Intelligence, Bank of America had the most commercial and industrial loans among banks as of September 2022 — $130 billion more than the next largest lender.
S&P Global Market Intelligence. Top 25 U.S. banks and thrifts for C&I loans in 3Q22. . January 12, 2023 View all resources.
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If you value rewards, Bank of America business loans are a good choice. By qualifying for a certain account, you can enjoy discounted interest rates, no commission on money transfers, and other benefits. Bank of America also makes sense for veterans and service members because it offers them a 25% discount on credit management or payments.
Term loans. Bank of America offers fixed interest secured and unsecured term loans. Its secured loan requires a higher annual income: $100,000 versus $250,000 for the unsecured option. But it offers a higher loan limit of up to $250,000 and a lower interest rate. Both business loans require a business of at least two years and a repayment period of up to five years, which is less than what other banks offer.
Business lines of credit. Bank of America also offers secured and unsecured business loans with income requirements as well as term loans. The secured line of credit comes with additional borrowing options – starting at $25,000 and $10,000 for the unsecured option. The maximum amount of the loan is not specified. Both have conditional terms, meaning you use the money when you need it, and it renews every year.
SBA loans. Bank of America is a lender that prioritizes small business operations, but it is less active in SBA loans. For example, Wells Fargo and US Bank offer more 7(a) loans
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US Small Business Administration. 7(a) & 504 Lender’s Report. January 12, 2023 View all sources SBA is the most common type of financing.
Other business loans. Bank of America offers business auto loans starting at $10,000. The bank also has commercial real estate loans and equipment loans, both starting at $25,000.
Chase offers a variety of products for small business owners, including checking accounts, credit cards and payment solutions. Chase business loans include:
Term loans. Chase offers more fixed and adjustable loans starting at $5,000 than lenders like Bank of America or PNC Bank. The repayment period can be from one to seven years.
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Business lines of credit. Chase has business and commercial lines of credit. Its business line of credit provides financing from $10,000 to $500,000 over five years. A commercial line of $500,000 or more can be extended for one to two years.
SBA loans. Chase is an SBA preferred lender and finances several types of SBA loans. These include SBA Express loans and lines of credit that offer faster financing up to $500,000.
Other business loans. Chase offers fixed or variable rate commercial real estate loans starting at $50,000. Terms are available for up to 25 years. Chase gives you the option of paying off your loan on a standard repayment schedule or paying it off at the end of the term.
Wells Fargo offers SBA loans and several lines of credit, but its lending maximums are lower than some banks — so if you have a mortgage and need more than $500,000 in financing, consider other options.
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Business lines of credit. Wells Fargo has three different lines of credit – two unsecured and one secured – ranging from $5,000 to $1 million. Lines of credit up to $150,000 have variable rates and are revolving. To qualify for Wells Fargo’s most generous line of business credit, you need at least $2 million to $10 million in annual sales revenue. This line of credit has a one-year term. Fees vary by product.
SBA loans. SBA loans. Wells Fargo is one of the most active SBA lenders. As of January 2023, it had approved more than $114 million in SBA 7(a) loans in fiscal year 2023 – the most of any major national bank.
Other business loans. Wells Fargo offers semi-truckload financing, commercial real estate loans and equity financing, as well as special products for starting or buying a medical practice.
Citibank may be best known among entrepreneurs for their small business credit cards. But the bank also offers business loans – with fewer products than other lenders. You may want this simplicity, but it also means you can consider other lenders if Citi doesn’t advertise the type of loan you want.
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Term loans. Citibank term loans range from $5,000 to $5 million. Interest rates are fixed, terms are up to seven years, and loans require a personal guarantee. Citi does not offer equipment loans, but it does have term loans.
Business lines of credit. Citibank offers two lines of business loans ranging from $10,000 to $5 million. Both lines come with variable interest rates and revolving terms and require a personal guarantee.
PNC business loans are best for mature businesses. To qualify, you usually need to have worked for at least three years, which is longer than other banks require.
Term loans. PNC offers $20,000 to $100,000 in unsecured term loans and $100,001 to $3 million in unsecured loans. Unsecured loans come with a fixed interest rate for up to five years, while secured loans can have a fixed or variable rate and a term of up to seven years.
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Business lines of credit. Amounts for PNC’s lines of credit reflect the bank’s term loans, with unsecured options ranging from $20,000 to $100,000 and unsecured options ranging from $100,001 to $3 million. Both have variable interest rates and revolving terms. The annual fee for an unsecured line is $175, and a secured line charges 0.25 percent of the fixed line amount.
SBA loans. PNC is a preferred SBA lender, but the bank is less active than others that make these loans. As of January 2023, PNC has approved 130 SBA 7(a) loans, compared to Wells Fargo and US Bank, which each approved more than 500 in FY 2023 (as of October 2022).
Other business loans. PNC business auto loans are available from $10,000 to $250,000 for up to six years. The bank’s commercial real estate loans are available with fixed or variable interest rates, repayment periods of up to 15 years (25 years with amortization), and financing amounts from $100,001 to $3 million.
Bank of America has fewer locations than other brick-and-mortar banks, including Bank of America and Wells Fargo. If you have a branch near you, US Bank can be a good choice for startups because you can qualify for certain products that have been in business for less than a year.
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Term loans. Bank of America offers fixed-rate, guaranteed loans up to $1 million. It also offers a fast business term loan with a minimum loan amount ($250,000) but a faster application process. A payday loan can be unsecured or unsecured and offers a repayment period of up to seven years. This product can be a good choice for new companies as you need at least six months of business to apply.
Business lines of credit. A US bank line of credit is also up to $1 million and is interest-only. The bank’s revolving line of credit, called CashFlow Manager, is up to $250,000 and requires at least six months in business to qualify. If the credit line is less than $50,000, the annual fee for this product is $150.
SBA loans. If you’re in the market for an SBA loan, Bank of America can be another good choice. As of January 2023, it has approved just over 530 7(a) loan applications in FY 2023. Also, you can qualify for the exam
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