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Banks are best for small-business loans if your company has been around more than a year and doesn’t need cash fast. Approvals can take months and are far from a sure thing — even with good credit.
Banks approve only about 15% of business loan applications, according to the latest data from the Biz2Credit Small Business Lending Index. That means the right bank for you not only offers the type of business loan you need, but also funds enough loans to make financing possible.
How Much Do You Need?
Here 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.
1. Bank of America
Bank of America had the most commercial and industrial loans among banks as of March 2022 — surpassing the next closest lender by about $122 billion, according to S&P Global Market Intelligence.
Bank of America business loans are a good choice if you value rewards. By meeting certain account requirements, you can qualify for interest rate discounts, no fees on wire transfers 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 loans. Bank of America offers both fixed-rate secured and unsecured term loans. Its secured loan requires greater annual revenue: $250,000 versus $100,000 for the unsecured option. But it offers higher borrowing limits — up to $250,000 — and a potentially lower interest rate. Both business loans require at least two years in business and can have repayment terms of up to five years, which is less than other banks may offer.
Business lines of credit. Bank of America also offers secured and unsecured business lines of credit, with the same revenue requirements as its term loans. The secured line of credit comes with additional borrowing power — starting at $25,000 compared with $10,000 for the unsecured option. There is no set borrowing maximum. Both have revolving terms, meaning you use the money as needed, that renew annually.
SBA loans. Bank of America is a preferred Small Business Administration lender, but it is less active in issuing SBA loans. For example, Wells Fargo and U.S. Bank lend more 7(a) loans — the most common type of SBA funding.
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, which both start at $25,000.
2. JPMorgan Chase
Term loans. Chase offers fixed- and adjustable-rate loans starting at $5,000, which is less than lenders like Bank of America or PNC Bank. Repayment terms can last from one to seven years.
Business lines of credit. Chase has business and commercial lines of credit. Its business line of credit provides $10,000 to $500,000 in funding on a renewable five-year revolving term. The commercial line is $500,000 and up, with one- to two-year terms that may be renewed.
SBA loans. Chase is an SBA-preferred lender and funds multiple types of SBA loans. That includes SBA Express loans and credit lines, which offer faster funding of up to $500,000.
Other business loans. Chase offers commercial real estate loans with fixed or variable rates that start at $50,000. Terms are available up to 25 years. Chase also gives you the option to pay back the loan on a standard repayment schedule — or pay it back with a balloon payment at the end of the term.
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 might prefer that simplicity, but it also means you may want to consider other lenders if Citi doesn’t advertise the kind of loan you want.
Term loans. Citibank’s term loan ranges from $5,000 to $5 million. Interest rates are fixed, terms last up to seven years and loans require a personal guarantee. Citi doesn't offer an equipment loan, but term loans can be used for this purpose.
Business lines of credit. Citibank offers two business lines of credit, with amounts ranging from $10,000 to $5 million. Both lines come with variable interest rates and revolving terms and require a personal guarantee.
4. Wells Fargo
Wells Fargo offers SBA loans and multiple types of lines of credit, however, its lending maximums are less than some banks — so consider other options if you have collateral and need more than $500,000 in financing.
Business lines of credit. Wells Fargo has three different lines of credit — two unsecured and one secured by collateral — ranging from $5,000 to $500,000. Credit lines of up to $100,000 have variable rates and are revolving. Those greater than $100,000 have a one-year term. You’ll typically need at least $2 million to $5 million in annual sales to qualify for Wells Fargo’s most generous business line of credit. Fees vary by product.
SBA loans. Wells Fargo is one of the most active SBA loan lenders. As of September 2022, it had approved more than $377 million in SBA 7(a) loans in the 2022 fiscal year — 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.
» MORE: Compare the best SBA lenders
PNC’s business loans are best for more mature businesses. You generally need to have been in business for at least three years to qualify, which is longer than other banks may require.
Term loans. PNC offers $20,000 to $100,000 for unsecured term loans and $100,001 to $3 million for loans secured by collateral. Unsecured loans come with a fixed interest rate and terms of up to five years, whereas rates on secured loans can be fixed or variable and terms can last up to seven years.
Business lines of credit. The amounts for PNC’s lines of credit mirror the bank’s term loans, with unsecured options ranging from $20,000 to $100,000 and secured options from $100,001 to $3 million. Both have variable interest rates and revolving terms. The unsecured line has an annual fee of $175, while the secured line charges 0.25% of the committed line amount.
SBA loans. PNC is a preferred SBA lender, but the bank is less active than others issuing these loans. As of September 2022, PNC had approved just over 400 SBA 7(a) loans, compared to Wells Fargo and U.S. Bank, which had approved over 1,800 each.
Other business loans. PNC business auto loans range from $10,000 to $250,000 with repayment terms up to six years. The bank’s commercial real estate loans come with fixed or variable interest rates, repayment terms up to 15 years (with up to a 25-year amortization) and financing amounts from $100,001 to $3 million.
6. U.S. Bank
U.S. Bank has fewer locations than other brick-and-mortar banks, including Bank of America and Wells Fargo. But if there’s a branch near you, U.S. Bank may be a good choice for startups, as you may be able to qualify for certain products with less than a year in business.
Term loans. U.S. Bank offers fixed-rate, secured term loans of up to $1 million. It also offers a fast business term loan, which has a lower borrowing maximum ($250,000) but a quicker application process. The Quick loan can be secured or unsecured and offers repayment terms up to seven years. This product can be a good option for newer companies as you only need a minimum of six months in business to apply.
Business lines of credit. U.S. Bank’s business line of credit also goes up to $1 million and has an interest-only payment option. The bank’s revolving line of credit, called CashFlow Manager, goes up to $250,000 and is for companies that have been in business for at least two years. That product has a $150 annual fee if the line of credit is less than $50,000.
SBA loans. U.S. Bank may be another good choice if you’re in the market for an SBA loan. As of September 2022, it had approved nearly 1,800 7(a) loan applications in the 2022 fiscal year. Plus, you may be able to qualify for an SBA loan from U.S. Bank with less than a year in business.
Other business loans. U.S. Bank offers equipment loans of up to $1 million, and soft costs of up to 25% can be included. The bank has fixed- and variable-rate commercial real estate loans of up to $10 million with five-, 10- or 15-year repayment terms, with amortizations up to 25 years.
How to get a small-business loan from a bank
Due to the pandemic and market conditions, business loan approvals at banks were down nearly 50% in December 2021 compared with the same time in 2019, according to Biz2Credit. To be able to still get a business loan from a bank, you’ll likely need the following:
An existing relationship. Most banks require you to have at least a business checking account at their institution. While you can simply open an account at some banks to meet this qualification, you can often benefit from a longer-term relationship. For example, you need an account with Wells Fargo for at least one year to apply for financing online.
Good credit. You’ll likely need a personal credit score in at least the 700s. Potential deal-breakers could include too much debt, too many open accounts or negative marks — like late payments, loan defaults and bankruptcies. The bank will check your business credit score for similar red flags.
Strong revenue. When you apply for a small-business loan, the bank will look to see whether your business is in good shape and has enough revenue to support how much you want to borrow. For example, Bank of America’s unsecured business loans require at least $100,000 in annual revenue; its secured options increase that number to $250,000.
Enough time in business. Two years under the same ownership is the standard. But there are exceptions — in both directions. For example, some U.S. Bank lending products are available if you’ve been in business for six months, whereas PNC Bank generally requires at least three years of operations for you to qualify.
Collateral. You don’t necessarily need to put up business collateral like commercial property or equipment to get a bank loan. Some banks offer both unsecured and secured business loans. But the bank may fund larger amounts for secured loans, while also providing longer terms and lower interest rates to make payments more affordable.
Alternatives to bank business loans
If you can’t get a business loan from a big bank, consider these alternatives:
Community banks. Business loan applicants report higher approval rates with smaller banks than big-name financial institutions, as well as greater overall satisfaction, according to the Federal Reserve’s 2022 Small Business Credit Survey. However, the number of community banks is dwindling, and a local bank may lack benefits you want — like online loan management or multiple locations.
Online lenders. Online business loans come with faster funding and higher approval rates than bank loans. Some online lenders even specialize in small-business loans. For example, as of September 2022, Live Oak Bank is the most-active SBA 7(a) lender by loan volume. Online lenders are also less likely to require traditional collateral and may provide funding for newer businesses. But the trade-off will likely be higher costs than a traditional bank offers.
Microlenders. Nonprofit organizations offer microloans, and these can be a good choice for startups or small businesses that need working capital but can’t qualify for a bank business loan. Microloans are typically less than $50,000 and can come with short repayment terms. Their costs may also be higher than a bank business loan.