Before alternative lenders start to offer easy-to-use business loans with flexible repayment terms and massive loan amount, traditional lenders were the first stop of small business owner in a financial crisis. What changed? After the downfall of the American economy in 2008, banks are hesitant to offer funds to small business with a weak financial position. Hence, they raised their qualification standard; only small businesses with the stellar financial position and ‘fair’ credit score are likely to a small business loan from banks.
Most of the American banks offer business loan at the low-interest rate and on flexible terms. Although the alternative lending industry is striving to provide business loans to small businesses, they come at a higher interest rate. According to one research of 2017, most small business owners apply for a business loan when they need extra cash flow to expand their business. Even though banks follow strict lending criteria, but this research shows that the approval rate of business loans has increased over the past years. In 2017, banks have approved more than 46% of the small business loan application.
If you are proud of your financial position and credit score, then applying for a business loan is a great option.
What kinds of loans can I get from a traditional bank?
With a low-interest rate of 4% to 10%, long loan terms, and transparent funding, you will have access to the following business loan.
Term Loans: With the fixed amount of the capital that borrowers promise to pay in time, they use the money to get rid of all types of financial problems. With longer loan terms you can invest money in a profitable business, so you can easily make the repayment.
SBA Loans: A vast number of local and international banks are offering SBA administered loans. These loans are perfect for business expansion, increasing working capital, and inventory purchases.
Business Lines of Credit: Allowing you to withdraw money from the credit lines. Apply for either secured or unsecured business loan and bid farewell to all of your financial problems.
Business Credit Cards: Technically not a loan, but a perfect line of financing for small businesses. Take advantage of the rewards and apply for a credit card with the lowest APR (Annual Percentage Rate).
Equipment Loan: Majority of the banks can finance up to 80% to 100% of the equipment. So, if your old piece of equipment breaks down easily, apply for the equipment loan from the bank.
Now that we have explored the potential loan types, let us explore some banks that are offering business loans to small businesses.
What banks should I visit?
Let’s limit your search for a small business loan from the banks. Here are five best banks; compare the loan types, interest rate, application and approval process. Pick the lender with the best customer service.
- Bank of America
Over a specific period, Banks of America has offered more than $30 billion to financially struggling small businesses. This bank makes it in the top 5 favorite banks of small business owners. If you are looking for an unsecured business loan ranging from $10,000 to $100,000, then get in touch with this bank. The interest rate starts at 5.50% and is fixed, so you don’t have to worry about the varying interest rate in the coming five years.
How can you get your hands on this business loan? You can either visit the bank in person or apply online. The lender will take some to reviews your application – banks are not famous for offering instant funding. If your loan application satisfies the lender, he or she will approve the business loan, and you can have access to the funds in five business days. With a two-year-old business and annual revenue of $100,000, you are a model borrower of a business loan by the Bank of America.
- Wells Fargo
In the year 2015, Wells Fargo lent more than $34.8 billion to the small businesses. It prides itself on being the “America’s leading small business lender.”If your business can benefit from a secured business loan, an unsecured business loan or a business line of credit don’t forget to explore Wells Fargo. In addition to this, they are also offering term loans and equipment loans.
If you are applying for an unsecured business loan, you will have access to a loan amount ranging from $10,000 to $100,000. The interest rate on this ranges from 7.75% to 22.99% and the borrower makes the monthly payments. In addition to this, to secure an unsecured business loan you don’t have to offer any collateral.
In case of the line of credit, you will have access to $5,000 to $100,000 with the starting interest rate of 1.75%. As this is the revolving credit, so you will have access to the credit whenever you need.
- Capital One
Capital One is famous for the large deposits, transactions, and business lines of credit. In addition to this, you can apply for an SBA 7(a), 504 and installment loans, If you think their existing business loans can not satisfy your financial need, you can ask the lender and your financial advisor to fashion a business loan as per your financial needs.
There is no specific deadline for the monthly payments of a business line of credit. Capital One’s small business line of credit starts at $10,000. So, pinpoint your financial needs and use the funds from a business line of credit to cover the financial gap.
- JPMorgan Chase
Forth on our list in JPMorgan Chase; in the first half of 2015, this bank offered $19.1 billion to small businesses. For decades small businesses are benefiting from Chase Business Quick Capital Loan and Chase Business Credit Cards.
In addition to this, if you already have access to Chase’s business account that you can easily apply for up to $250,000. These banks believe efficiency, so it offers quick business loans. It is a perfect funding option for small businesses looking for quick access to money.
- US Bank
Last on our list is the US Bank; this bank offers commercial loans, equipment loans, term loans, and lines of credit. In addition to this, if you are practice any art or skill, then you can apply for a business loan through this bank and enjoy the funds.
The eligibility criteria of a business loan by the US bank are easy; if your business in six months old, you can have access to more than $250,000. You can invest this money in another business, purchase a piece of new equipment, and increase your cash flow. The choice is yours!
If you are not satisfied with these terms, then explore alternative lenders. Head over to the official website, and apply for a small business loan. For more information about financial documents and tips and tricks to get the most ideal funding, follow us on Facebook and Twitter (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.