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Banks are best for small business loans if your business has been around for over a year and doesn’t need quick cash. Approval can take months and is far from foolproof — even with good credit.
Banks For Small Business Loans
Banks only approve about 15% of business loan applications, according to the latest data from the Biz2Credit Small Business Loan Index
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Biz2Credit. Biz2Credit Small Business Lending Index™, December 2022. Accessed January 12, 2023. View all sources. This means that the right bank for you can offer not only the type of business loan you need, but enough of it to make financing possible.
Here are the best small business loan banks based on business and industrial loan volume and product offerings, along with alternatives to consider.
According to S&P Global Market Intelligence, U.S. banks have the most commercial and industrial loans among banks through September 2022 — surpassing the next closest bank by nearly $130 billion
S&P Global Market Intelligence. Top 25 U.S. banks and thrifts for C&I loans 3Q22. . Accessed 12 January 2023. View all sources.
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If you value returns, a Bank of America business loan is a great choice. By meeting certain account requirements, you can receive interest rate discounts, no wire transfer fees, and other benefits. Bank of America may also make sense for veterans and service members, as it offers them a 25% discount on loan administration or origination fees.
Term loan. Bank of America offers fixed-rate secured and unsecured term loans. Its secured loans require a higher annual income: $250,000, compared with $100,000 for the unsecured option. But it offers higher borrowing limits — up to $250,000 — and possibly lower interest rates. Both business loans require a minimum of two years in business and repayment terms of up to five years, which is shorter than what other banks may offer.
Business line of credit. Bank of America also offers secured and unsecured business lines of credit with the same income requirements as its term loans. Secured lines of credit with additional borrowing capacity—starting at $25,000, while unsecured lines of credit are $10,000. There is no set maximum loan amount. Both have revolving clauses, which means you can use the money as you want, renewed every year.
SBA loans. Bank of America is the Small Business Administration’s preferred lender, but it has been less aggressive in making SBA loans. For example, Wells Fargo and Bank of America offer more 7(a) loans
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U.S. Small Business Administration. 7(a) and 504 Lender Reports. Accessed January 12, 2023. See all sources – most common types of SBA funding.
Other business loans. Bank of America offers commercial auto loans starting at $10,000. The bank also offers commercial real estate loans and equipment loans 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 loan. Chase offers fixed-rate and variable-rate loans starting at $5,000, less than lenders like Bank of America or PNC Bank. The repayment period can last from one to seven years.
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Business line of credit. Chase Bank has commercial and commercial lines of credit. Its business line of credit provides funding of $10,000 to $500,000, renewable for a five-year revolving term. Business lines are $500,000 and up for one to two-year terms, renewable.
SBA loans. Chase is the SBA’s preferred lender, financing many types of SBA loans. This includes SBA Express loans and lines of credit, which provide faster funding of up to $500,000.
Other business loans. Chase offers fixed or variable rate commercial real estate loans starting at $50,000. The term can be up to 25 years. Chase also gives you the option to repay your loan on a standard repayment schedule—or pay it off in one lump sum at the end of the term.
Wells Fargo offers SBA loans and several types of lines of credit, however, its loan maximums are lower than some banks — so if you have collateral and need financing over $500,000, consider other options.
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Business line 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 interest rates and are revolving. You typically need at least $2 million to $10 million in annual sales to qualify for Wells Fargo’s most generous business line of credit. The term of this line of credit is one year. Fees vary by product.
SBA loans. SBA loans. Wells Fargo is one of the most active SBA lenders. As of January 2023, it approved more than $114 million in SBA 7(a) loans for fiscal year 2023 — the most among large national banks
Other business loans. Wells Fargo offers semi-truck financing, commercial real estate purchase loans and equity financing, as well as specific products for starting or buying a medical practice.
Citibank may be better known among entrepreneurs for its small business credit cards. But the bank also offers business loans — though it has fewer products than other lenders. You may prefer the simplicity, but it also means that if Citi isn’t advertising the type of loan you want, you may need to consider other lenders.
Best Banks For Small Business Loans In 2022
Term loan. Citibank term loans range from $5,000 to $5 million. The interest rate is fixed, the term is up to seven years, and the loan requires a personal guarantee. Citi does not offer equipment loans, but term loans are available for this purpose.
Business line of credit. Citibank offers two business lines of credit ranging from $10,000 to $5 million. Both lines come with variable rates and revolving terms, and require a personal guarantee.
PNC’s business loans are best for more established businesses. You usually need to be in business for at least three years to qualify, which is longer than other banks may require.
Term loan. PNC offers unsecured term loans of $20,000 to $100,000 and mortgages of $100,001 to $3 million. Unsecured loans have a fixed interest rate and a term of up to five years, while secured loans can have a fixed or variable interest rate and a term of up to seven years.
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Business line of credit. The amount of the PNC line of credit reflects the bank’s term loan, ranging from $20,000 to $100,000 for unsecured options and $100,001 to $3 million for secured options. Both have variable rates and revolving clauses. Unsecured lines have an annual fee of $175, while secured lines charge 0.25% of the committed line amount.
SBA loans. PNC is the preferred SBA lender, but the bank is not as active as other banks making these loans. As of January 2023, PNC approved only about 130 SBA 7(a) loans, while Wells Fargo and Bank of America each approved more than 500 loans in FY 2023, which begins in October 2022
Other business loans. PNC business auto loans range from $10,000 to $250,000 with repayment terms of up to six years. The bank’s commercial real estate loans have fixed or variable interest rates, repayment terms of up to 15 years (with an amortization period of up to 25 years), and financing amounts ranging from $100,001 to $3 million.
Bank of America has fewer branches than other brick-and-mortar banks, including Bank of America and Wells Fargo. However, if you have a branch near you, U.S. Bank may be a good choice for startups, as you may be eligible for certain products if you have been in business for less than a year.
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Term loan. Bank of America offers fixed-rate, secured term loans of up to $1 million. It also offers fast business term loans with a lower maximum borrowing amount ($250,000) but a faster application process. Quick loans can be secured or unsecured and offer repayment terms of up to seven years. This product is a good option for new companies as you only need to have been in business for at least six months to apply.
Business line of credit. Bank of America also has a business line of credit of up to $1 million with an interest-only payment option. The bank’s revolving line of credit, called CashFlow Manager, is up to $250,000 and only requires at least six months of business to qualify. The product has an annual fee of $150 if the credit limit is less than $50,000.
SBA loans. If you’re in the market for an SBA loan, Bank of America may be another good option. As of January 2023, it approved more than 530 7(a) loan applications for FY 2023. Additionally, you may be eligible for
