Editorial Review

Live Oak Bank SBA Loans: 2020 Review

Live Oak Bank offers low-cost SBA loans up to $5 million. Only established businesses with strong financials will qualify.

Andrew L. WangApril 10, 2020

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Our Take

Live Oak Bank - SBA loan
Apply Now

on Live Oak Bank's website

Apply Now

on Live Oak Bank's website

Est. APR

5.50 - 8.25%

Min. Credit Score

650

Pros & Cons

Pros

  • Competitive rates among online lenders.

  • Faster than getting an SBA loan from a bank.

Cons

  • Must have strong financials, supported by personal and business tax returns for the past 3 years.

  • Only for specific industries.

  • Stringent rules on use of proceeds.

  • Requires business lien and personal guarantee.

Compare to Other Lenders

Live Oak Bank - SBA loan
SmartBiz - SBA loan
Credibility Capital - Online term loan
Apply NowApply NowApply Now
Est. APR

5.50 - 8.25%

Est. APR

6.73 - 10.29%

Est. APR

19.99 - 24.99%

Min. Credit Score

650

Min. Credit Score

650

Min. Credit Score

680

Full Review

LOOKING FOR CORONAVIRUS BENEFITS INFORMATION?

If you need a major cash infusion to take your small business to the next level, Live Oak Bank is a good option for obtaining Small Business Administration loans.

Live Oak may be right for your business if you:

Need capital for a major expansion: The bank offers SBA loans of up to $5 million. Borrowers typically use proceeds to expand operations.

Are an established business with strong financials: To qualify for a loan, your business must have strong enough cash flow to cover loan payments, without any bankruptcy history or outstanding tax liens.

Are in one of the industries the lender focuses on: Live Oak lends in several select industries, including agriculture, healthcare and wine/craft beverage.

Reasons to use Live Oak Bank

The guidance of an experienced SBA lender

Live Oak Bank perennially ranks among the highest-volume lenders in the SBA 7(a) program.

The bank focuses on offering SBA loans to businesses in specific industries, some of which other lenders don’t serve. They include:

  • Accounting and tax firms

  • Agriculture

  • Automotive

  • Educational services

  • Funeral homes and cemetery

  • Insurance

  • Self-storage

  • Senior care

  • Veterinary

The bank has a team of financing specialists dedicated to each industry, so when you apply for a loan, you’ll be working with people familiar with your industry as well as the SBA process.

Live Oak Bank also offers non-SBA commercial loans, but these make up a small fraction of its financing. And it offers federally guaranteed loans from the U.S. Department of Agriculture geared to farms and other rural small businesses.

Faster application process than traditional banks

With the help of web-based tools, Live Oak Bank takes an average of 45 days to process an SBA loan application. That’s faster than traditional banks, where the process can take more than three months.

Inexpensive financing for high-value SBA loans

Live Oak Bank’s average SBA loan size was $1.2 million in 2018, according to the company. The bank offers an annual percentage rate, which includes all loan fees, as low as 5.50%. For an SBA loan of more than $50,000 paid over 10 years, the APR is the current prime rate plus a spread of up to 2.75%, or 8.25%. That’s tough to beat, especially for loans of more than $1 million.

Where Live Oak Bank falls short

Only certain industries qualify

If your small business is in trucking, information technology, janitorial services or a number of other industries, Live Oak Bank is not an option. The lender serves only the industries listed above.

Stringent SBA requirements

Live Oak Bank uses its online platform to streamline the SBA loan application process. However, you still have to meet the SBA’s requirements and provide a long list of documents and information.

Longer process than other online lenders

Getting an SBA loan within 45 days is an accomplishment. But you may need financing more quickly to deal with an emergency or pounce on an opportunity. In that case, Live Oak Bank wouldn’t be a good option.

Compare 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.