Bank of America Business Loans: 2023 Review
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Our Take
The bottom line:
Bank of America business loans are a good option for established businesses that have pre-existing Bank of America accounts and can take advantage of Preferred Rewards member discounts.
Full Review
Pros & Cons
Pros
- Several types of business loans available.
- Competitive interest rates.
- Preferred Rewards program can offer interest rate discounts and other perks.
- Offers specialized commercial real estate, equipment, and health care practice financing.
- Fee discounts available for veteran-owned businesses.
Cons
- Multiple years in business required to qualify.
- May need to visit a Bank of America branch or schedule a phone appointment to apply.
- Personal guarantee likely required.
- Limited information available online.
Full Review
As of August 2021, Bank of America has the most commercial and industrial loans among banks — surpassing the next closest lender by over $80 million, according to S&P Global Market Intelligence. Bank of America offers several types of small-business loans, including SBA loans, term loans, business lines of credit, auto loans and equipment financing.
Although you’ll need multiple years in business and strong credit to qualify for a business loan from Bank of America, pre-existing customers — such as those with a Bank of America business checking account — can benefit from discounted interest rates and other perks.
How Much Do You Need?
Bank of America is best for borrowers who:
Have established businesses. Bank of America requires that your business be under current ownership for at least two years in order to qualify for financing.
Are current Bank of America customers. Small-business owners with eligible Bank of America and/or Merrill business accounts can qualify for the Preferred Rewards program, which offers interest rate discounts, as well as other benefits.
Don’t need cash fast. Bank of America offers limited online loan applications. More likely than not, you’ll need to apply for a business loan over the phone or in person. Compared to online lenders that can provide financing in just 24 hours, it may take several days to get access to capital. If timing isn’t a top concern, however, you’ll be able to benefit from the competitive interest rates and loan terms that Bank of America can offer.
Types of Bank of America business loans
Bank of America offers several different types of business loans including:
Secured and unsecured term loans.
Secured and unsecured lines of credit.
Business auto loans.
Equipment financing.
Commercial real estate loans.
Franchise financing.
Health care practice loans.
Bank of America business loan features
Bank of America’s small-business loans have competitive rates and terms. Here’s what you can expect from their financing, based on the loan type:
Secured business loan | Unsecured business loan | Secured business line of credit | Unsecured business line of credit | Business auto loan | Equipment financing | Commercial real estate loan | |
|---|---|---|---|---|---|---|---|
Loan amount | $25,000 to $250,000. | $10,000 to $100,000. | $25,000 and up. | $10,000 and up. | $10,000 and up. | $25,000 and up. | $25,000 and up. |
Estimated APR range | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. | Varies based on your business’s qualifications. |
Fees | Origination fee: 0.5% of financed amount. | Origination fee: $150. | Upfront and renewal fees vary based on credit line amount. $25,000 to $100,000: $150. $100,001 to $250,000: $250. Above $250,000: 0.5% of the credit line amount. | None. | No application fee. | Origination fee: 0.5% of financed amount. | Upfront fee: 0.75% of financed amount. Additional fees and closing costs such as property insurance, flood hazard insurance and/or appraisal may apply. |
Terms | Up to four years when secured by business assets. Up to five years when secured by certificate of deposit. | 12 to 60 months. | Revolving terms with annual renewal. | Revolving terms with annual renewal. | 48 to 72 months. | Up to five years when secured by business assets. | Up to 10 years with balloon payment. Up to 15 years with full amortization. |
Repayment schedule | Monthly. | Monthly. | Monthly. | Monthly. | Monthly. | Monthly. | Monthly. |
You can make a phone or in-person appointment with your local small-business specialist to learn more about franchise or health care practice financing from Bank of America.
Bank of America SBA loans
Bank of America also offers multiple types of SBA loans, including standard SBA 7(a) loans, SBA Express loans and SBA 504 loans.
Bank of America is an SBA Preferred Lender, meaning the bank has extensive experience processing and servicing SBA loans. This designation also means that Bank of America can make final credit decisions without sending applications to the SBA, allowing for a faster loan approval timeline.
Bank of America SBA loan features
Loan amount | $25,000 to $5 million. |
Estimated APR range | Varies based on your business’s qualifications, but subject to SBA maximums. |
Fees | Guarantee, origination, packaging, processing and other miscellaneous fees may apply. |
Terms |
|
Repayment schedule | Monthly. |
Funding speed | Varies. Average timeline is 60 to 90 days for standard SBA loans. |
Where Bank of America stands out
Variety of loan options
Bank of America has a variety of business loans to choose from, including both unsecured and secured loans, as well as specialized financing options such as equipment loans, commercial real estate loans and auto loans.
If you’re not sure which type of business loan is right for your needs, you can schedule an appointment with a Bank of America lending specialist to discuss your options.
Competitive rates and terms
Among its financing options, Bank of America offers business loans with long terms and competitive interest rates.
The unsecured Business Advantage Term Loan, for example, has terms ranging from 12 to 60 months, with fixed interest rates as low as 4.75% APR. (Interest rates vary depending on your creditworthiness and credit line amount, among other factors.)
Similarly, Bank of America’s business auto loan has terms ranging from 48 to 72 months, with fixed interest rates as low as 2.79% APR.
Discounts and rewards available
Bank of America offers discounts and perks to small businesses that are eligible for its Preferred Rewards for Business program. To join the program, you need:
An active Bank of America business checking account.
Three-month combined average daily balance of $20,000 or more in qualifying Bank of America business deposit accounts and/or Merrill business investment accounts.
There is no fee to join, and once you’re eligible, all you have to do is enroll through the Bank of America website.
Membership perks include discounted interest rates on business loans, no fees on select banking services and higher interest rates on savings accounts. Plus, there are three levels of reward tiers for the program — so, the more funds you hold in your qualifying Bank of America deposit accounts, the better discounts you can receive.
Where Bank of America falls short
Hard to qualify
Like other bank lenders, you’ll need to have strong financials and several years in business to qualify for funding from Bank of America. Startups and businesses with bad credit will need to consider alternative sources of financing, such as online lenders or nonprofit microlenders.
Slow application process
For the majority of business loan options, Bank of America requires you to schedule an appointment to meet with a lending specialist, either by phone or in person, in order to complete and submit an application.
If you want to apply for a loan online, you only have one option — the Business Auto loan — unless you have a Bank of America business checking account.
Compared to lenders that allow you to create an online account to upload and submit documentation, Bank of America’s loan process will likely be much slower — resulting in a longer time to fund.
Limited information available online
Although not uncommon among bank lenders, Bank of America does not provide access to information that you may find from online lending competitors, such as interest rate ranges, credit score minimums and average time to fund.
According to a Bank of America representative, the bank doesn't share specific underwriting guidelines like these publicly.
Bank of America business loan requirements
Bank of America’s minimum borrower eligibility requirements can vary based on the type of business loan you're applying for. In general, however, you can expect to need the following criteria to qualify:
Time in business: Two years or more.
Annual revenue: $250,000 or more. ($100,000 or more for unsecured loans and credit lines.)
Although Bank of America doesn’t list a minimum credit score requirement on its website, you’ll need to have strong credit — typically a FICO score of 700 or higher — for the best chances of approval.
How to apply for a business loan from Bank of America
You can apply for a small-business loan from Bank of America by scheduling an appointment by phone or in person with a business lending specialist. If you’re interested in Bank of America’s Business Advantage Auto loan, you also have the option to submit an application online.
When you work with a Bank of America business lending specialist to complete a loan application, you’ll be asked to provide basic information about your business, including:
Business name, address and phone number.
Nature of the business, date of establishment, number of employees.
Annual net profit and annual gross sales.
List of outstanding debt obligations (if applicable).
You’ll also need to provide information about each business owner, guarantor and controlling manager, such as:
Name, date of birth, residential address.
Social Security number (U.S. citizens) or passport number and country of issuance.
Country of citizenship and country of residence.
Percentage of ownership.
Personal income.
Residential status (rent or own) and monthly housing payment.
If you’re applying for a commercial real estate loan, equipment loan or business auto loan, you’ll need to include details about the property, vehicle or equipment that you plan to finance.
It’s important to note that although you do not need a Bank of America business checking account to apply for a business loan, some loans require payments to be auto-debited from one of these accounts.
If you have an existing Bank of America business online banking login, you also have the option to apply for an unsecured business line of credit or unsecured business loan online.
Alternatives to Bank of America business loans
Funding Circle
If you have strong credentials but don’t want to wait for a traditional bank loan, Funding Circle might be a good option for your business.
Funding Circle offers business term loans with competitive rates and terms, and a streamlined online application — with funding available in as little as two days. Funding Circle’s business loans are available in amounts up to $500,000, with terms from six months to seven years. Interest rates range from 15.22% to 45%.
To qualify, you’ll need a minimum credit score of 660 and at least two years in business.
» Learn more: Funding Circle business loans review
American Express Business Blueprint™
American Express Business Blueprint™ offers business lines of credit from $2,000 to $250,000, with terms of six, 12 or 18 months. Instead of a traditional interest rate, American Express charges a fee each month that you have an outstanding balance — depending on your loan’s term.
Total monthly fees incurred over the loan term range are:
Six-month term: 3% to 9%.
12-month term: 6% to 18%.
18-month term: 9% to 27%.
You can apply for an American Express® Business Line of Credit online. Plus, American Express allows you to connect your business checking account or accounting software to its underwriting platform to speed up the application process.
American Express Business Blueprint™ can also be a good option for newer businesses and those with less-than-perfect credit histories. To qualify for a line of credit, you’ll need at least one year in business, a minimum credit score of 660, and an average monthly revenue of at least $3,000. Note that the required FICO score may be higher based on your relationship with American Express, credit history, and other factors, and that all businesses are unique and subject to approval and review.
Compare small-business loans
If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
