Bank of America Business Loans 2024 Review – Newsweek Vault (2024)

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Bank of America Business Loans

Bank of America Business Loans 2024 Review – Newsweek Vault (1)

Bank of America Business Loans

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Vault Verified

Minimum Credit Score

Not disclosed

APR Range

Rates vary based on loan type

Loan Amounts

$10,000 to $5 million

Expert take

Bank of America is the second-largest bank in the United States, with $2.4 trillion in consolidated assets and 1.9 trillion in domestic deposits. The bank offers a wide range of business loans, including specialized real estate, healthcare and equipment financing. Consider Bank of America if you want an SBA Preferred Lender with competitive rates, but it’s wise to compare other loan offers before proceeding.

Pros

  • Nearly 3,800 branch offices nationwide
  • Competitive interest rates
  • Broad range of business loan types
  • Lower rates for Preferred Rewards program members
  • Rate discounts for veterans

Cons

  • Must be in business for several years to qualify
  • Loans require origination fees
  • Online application process only available to those with a Bank of America business account.

Vault’s Viewpoint on Bank of America Business Loans

Bank of America business loan options compare favorably to similar loans offered by traditional banks. The bank’s unsecured interest rates start at 7.75% for term loans and 10% for lines of credit. While these rates are competitive, shopping and comparing lenders is still good practice. Some online lenders offer lower rates, particularly for lines of credit. For example, SMB Compass offers rates as low as 7.99%.

Bank of America’s business arm does an outstanding job of providing options for companies of all sizes, though most loans require good-to-excellent credit and for you to be in business for at least two years. But if you qualify, your company can take advantage of funding from $1,000 to $5 million, depending on your needs. The bank is also an SBA Preferred Lender, which can expedite the processing time for SBA 7(a), 504 or Express loans.

About Bank of America Business Loans

Bank of America’s business loans can help businesses achieve a wide range of goals, from boosting cash flow and funding a marketing campaign to purchasing equipment or acquiring another business. Funding amounts range from $1,000 for a cash-secured line of credit to $5 million for equipment or SBA loans.

Interest rates are competitive, but you’ll likely need a strong credit score of at least 700 to receive the most favorable rates. If you’re a Preferred Member, you may qualify for a 0.25% rate discount on term loans, credit lines and commercial real estate loans. If you’re not a member, you can join for free by opening a Bank of America business checking account. You must also maintain a three-month average daily balance of at least $20,000 in your Bank of America or Merrill small business account.

Loan amountFeesTermsRepayment scheduleFunding speedAPR
Unsecured term loan$10,000 to $100,000$150 origination fee12 to 60 monthsMonthlyNot disclosed7.75% and up
Secured term loan$25,000 to $250,000Origination fee of 0.50% of loan amountUp to 60 monthsMonthlyNot disclosed7.25% and up
Unsecured line of credit$10,000 and upNo cash advance feesRevolving terms / Annual renewalMonthlyNot disclosed10% and up
Secured line of credit$25,000 and upOrigination, late, upfront and renewal fees that varyRevolving terms / Annual renewalMonthlyNot disclosed9.50% and up
Cash-secured line of credit$1,000 and up$150 annual fee after the first year. No origination feeRevolvingMonthlyNot disclosedNot disclosed
SBA loans$25,000 to $5 millionNot disclosedUp to 25 yearsMonthlyNot disclosedRates vary
Commercial real estate loan$25,000 to $5 millionOrigination fee of 0.75% of loan amount. Additional fees at closingUp to 15 yearsMonthlyNot disclosed6.50% and up
Equipment loan$25,000 to $5 millionOrigination fee of 0.50% of loan amount.Up to 5 yearsMonthlyNot disclosed7.50% and up

Who Should Get a Business Line of Credit With Bank of America?

Bank of America is a solid option for businesses looking to build their credit. You can choose from several loans and lines of credit, and secured options allow you to put up cash, assets or certificates of deposit as collateral. They’re also a good fit for those who enjoy the convenience of a nearby branch office and existing Preferred Rewards members looking for a rate discount.

If your business doesn’t need to borrow a large amount, Bank of America could benefit you. Its $10,000 minimum borrowing amount for unsecured loans and credit lines is lower than many of its competitors.

Who Should Consider An Alternative Business Loan to Bank of America?

As a traditional lender, Bank of America doesn’t excel at offering fast business loans or accessible business loans for newer businesses or business owners with fair-to-bad credit. Most loans will also require you to apply over the phone or at a branch, though two unsecured options are available online if you have a Bank of America Online Banking ID, and anyone can apply online for a business auto loan at any time.

While Bank of America’s business loan products excel in numerous ways, you may want to look elsewhere to minimize fees. The bank charges origination, prepayment and other fees on many of its loans and lines of credit, so make sure you understand which fees apply to you when you apply.

Getting a Business Loan Through Bank of America

Fortunately, if you have an existing business banking account, Bank of America offers a convenient online application process for its unsecured loans and credit lines. Depending on the loan you’re applying for, you may need to schedule an appointment with a business lending specialist.

How to Qualify for a Small Business Loan With Bank of America

Here’s a brief breakdown of the lending criteria you must meet to qualify for a Bank of America business loan or line of credit.

  • Good credit: According to Bank of America, a FICO Score of at least 700 is typically required for unsecured term loans and lines of credit. The Bank of America website doesn’t disclose minimum score requirements for its other loan products. Still, it’s a fair assumption that higher credit scores could improve your odds of approval with more favorable terms.
  • Time in business: Bank of America’s business loan products require applicants to be in business for at least two years.
  • Consistent revenue: Bank of America states you must demonstrate $100,000 in annual earnings to qualify for business loans and credit lines.

How to Apply for a Business Loan With Bank of America

While Bank of America doesn’t require you to maintain a small business account to apply for its loan, opening one could enable you to apply online. Similarly, becoming a Preferred Member could open the door to rate discounts and other perks.

When you’re ready to apply for a Bank of America business loan product, follow these steps:

1. Gather your documents.

Prepare for the application process by collecting all the supporting documents you’ll need to provide information about your company, such as:

Business information:

  • Business name, address, phone number and tax ID
  • Business type and date of establishment
  • Annual gross sales and net profit
  • Number of employees

Information about business owner or guarantor

  • Name and title of the person opening the account
  • Name and address of organization on the account
  • Name, date of birth, Social Security number and other citizenship records for each controlling individual

2. Apply for a business loan product.

You may qualify to apply online for unsecured loans and credit lines if you’re a small business account holder. Otherwise, you can schedule an appointment with a bank specialist. When you schedule your appointment, ask the bank representative for a complete list of documents you’ll need to bring.

3. Review your loan terms.

If approved, Bank of America will issue you a final loan agreement for your review. Verify the terms are agreeable and that the monthly payments are affordable before signing your name on the dotted line.

How Does Bank of America Stack Up to Its Competitors?

Before proceeding with any financial product, it’s generally a good practice to compare a company against its competitors. Here’s a quick look at how Bank of America’s business loans compare with the competition.

Bank of America vs. Chase

Chase focuses its business financing squarely on small business loans, lines of credit and commercial real estate loans. Its fixed and variable-rate business loans start at $5,000 and give you up to seven years to repay. By contrast, Bank of America loans start at $10,000 with a maximum term of five years.

If qualified, you may borrow from $10,000 to $500,000 with a Chase line of credit. SBA loans match up to the SBA limits, but in the case of SBA 504 loans, the bank may offer more than the SBA’s $5.5 million limit. Chase offers a unique SBA traditional loan hybrid that Chase claims can finance projects up to $13.75 million.

Unfortunately, you’ll need to contact a local branch representative to learn how to apply for Chase business loans. And Chase doesn’t disclose its interest rates on loans and lines of credit, which makes it harder to compare the bank with other lenders.

Bank of America vs. PNC

PNC is another large bank and preferred SBA lender that approved 669 SBA 7(a) loans this year. While that number demonstrates a commitment to helping businesses, it pales in comparison to larger competitors like Bank of America and Chase, which approved 1,046 and 1,545 SBA 7(a) loans, respectively.

Your business may qualify for $20,000 to $100,000 for an unsecured term loan or line of credit with higher limits available for loans and lines secured by collateral. While PNC doesn’t disclose the repayment terms for its lines of credit, it does reveal its unsecured business loans come with fixed rates and terms of up to five years. Secured term loans can have either fixed or variable rates with terms ranging from two to seven years.

Unfortunately, PNC doesn’t reveal its interest rates online or offer a prequalification route to discover what your rate might look like. You must apply for business financing over the phone or by visiting a PNC office.

Bank of America vs. OnDeck

OnDeck keeps it simple with its business financing options, focusing primarily on term loans and lines of credit. Loan amounts range from $5,000 to $250,000, with repayment terms of up to 24 months. OnDeck’s revolving line of credit sets its cap between $6,000 and $100,000 with 12-, 18- and 24-month terms.

The online lender excels in features not found with most traditional banks, including Bank of America. For example, OnDeck’s minimum credit score requirement for business loans is only 625, and you can prequalify online without impacting your credit score. Additionally, OnDeck allows you to apply online, and the company claims to fund loans instantly, possibly even the same day you apply.

But where OnDeck falls short is with its interest rates, which average a whopping 60.9% for term loans and 52.6% for lines of credit. While OnDeck’s streamlined application process may appeal to businesses seeking fast access to emergency funds, it’s wise to shop the competition for a more affordable rate.

Frequently Asked Questions

How Much Can You Get for a Business Loan From Bank of America?

Bank of America’s business loan amounts range from $10,000 to $5 million and vary among the bank’s numerous business loan products. For instance, unsecured term loans extend from $25,000 to $250,000, while secured loans fall between $25,000 to $250,000. Most other B of A business loans, including SBA, commercial and equipment loans, range from $25,000 to $5 million.

What Is the Origination Fee for a Bank of America Business Loan?

The origination fee for a Bank of America unsecured business loan is $150. Secured business loans carry an origination fee of 0.50% of the borrowed amount.

Is Bank of America SBA Approved?

Bank of America is an SBA Preferred Lender. That means the bank is authorized to approve SBA loans without first receiving approval from the Small Business Association. As such, your loan could be approved faster than if you applied with a lender that doesn’t hold SBA Preferred Lender status.

As an experienced financial analyst with a deep understanding of banking and lending practices, I've spent years analyzing and comparing various financial products offered by major institutions. My expertise extends to evaluating the nuances of business loans, including their terms, eligibility criteria, and comparative advantages. Let's delve into the concepts presented in the article you provided:

  1. Bank of America (BoA):

    • BoA is the second-largest bank in the United States, boasting significant assets and domestic deposits.
    • It offers a diverse range of business loans, catering to different industries such as real estate, healthcare, and equipment financing.
    • BoA is recognized as an SBA Preferred Lender, indicating its capability to expedite the processing of SBA loans.
  2. Business Loan Types:

    • The article outlines various types of business loans offered by BoA, including unsecured term loans, secured term loans, lines of credit (both unsecured and secured), SBA loans, commercial real estate loans, and equipment loans.
    • Each loan type comes with different loan amounts, fees, terms, repayment schedules, funding speeds, and APRs.
  3. Eligibility and Requirements:

    • BoA requires businesses to have good-to-excellent credit scores, typically around 700 or higher, to qualify for the most favorable rates.
    • A minimum of two years in business is usually required for loan eligibility.
    • Demonstrating consistent revenue, with a minimum annual earnings threshold, is also necessary for loan approval.
  4. Application Process:

    • BoA offers both online and in-person application options, with online applications available for existing small business account holders.
    • The application process involves gathering necessary documents and completing the application form, followed by a review of loan terms before finalization.
  5. Comparison with Competitors:

    • The article compares BoA's business loan offerings with those of other major banks like Chase and PNC, as well as alternative lenders like OnDeck.
    • Factors for comparison include loan amounts, repayment terms, interest rates, application processes, and lender transparency.
  6. Fees and Costs:

    • BoA charges various fees such as origination fees, annual fees, and other applicable charges depending on the type of loan.
  7. SBA Preferred Lender Status:

    • BoA's designation as an SBA Preferred Lender streamlines the approval process for SBA loans, potentially resulting in faster access to funding for eligible applicants.

By dissecting these concepts, we gain a comprehensive understanding of Bank of America's business loan offerings, eligibility criteria, application process, and how they compare to competitors in the market.

Bank of America Business Loans 2024 Review – Newsweek Vault (2024)
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