Capital One Business Loans Review
Need help finding a lender?
- Date Established
- McLean, VA
- Multiple types of financing available
- High borrowing amounts
- Rates tend to be inexpensive
- Monthly repayments
- Long-term financing options available
- Borrowing qualifications might be hard to meet
- Financing isn’t available in some states
- Funds can take a while to disburse
- Website advertising is not informative
Capital One Business Loans Overview
Capital One is a McLean, Virginia-based bank serving the Mid-Atlantic region and parts of the South. Capital One is perhaps best known for its credit cards and credit card marketing strategy.
Nevertheless, the bank does lend to businesses located within its retail footprint. Like most banks, these loans aren’t the easiest to qualify for, but they do have better rates than you’ll find in most of the alternative market.
Read on and see if Capital One is the right solution for your company.
Table of Contents
Business Lending Products
- Business Term Loans: Term loans offer a lump sum of cash in exchange for an agreement to repay the amount borrowed, plus interest, over an agreed period. “Installment” refers to the regular payment schedule these types of loans are known for.
- Lines Of Credit: Rather than offering a lump sum, lines of credit establish a maximum credit limit against which the applicant can borrow. The borrower can draw as many times as they want so long as the total amount borrowed does not exceed the credit limit. Interest is paid on the amount used.
- SBA Loans: SBA loans are loans, typically term loans, that are partially guaranteed by the Small Business Administration. This guarantee allows applicants to access better rates and terms than their profile may otherwise allow.
Here are the prerequisites for getting a loan from Capital One:
|Time In Business:||2 years|
You’ll need to have a Capital One business checking account or be willing to open one. You’ll also need to be based in one of the following states:
- New Jersey
- New York
- Washington, D.C.
Terms & Fees
Capital One offers the following financial products to small business:
Business Installment Loans
These are the terms for Capital One’s Business Installment Loans:
|Borrowing Amount:||$10,000 and up|
|Term Length:||1-5 years|
|Interest Rate:||Fixed monthly payments|
Capital One offers term loans to business bank account customers. These loans begin at $10,000. The bank doesn’t set an upper limit, but most banks will want you to have in the neighborhood of $1.50 in income for every dollar you borrow.
Payments are automatically deducted from your business checking account.
Lines Of Credit
These are the terms and fees for Capital One’s Working Capital Lines of Credit:
|Credit Limit:||$10,000 and up|
Capital One’s revolving lines of credit allow businesses to quickly access funds in varying increments up to whatever credit limit you qualify for. So if you have a $50,000 credit limit, you could withdraw $12,000 one month, then $20,000 the next. As you pay down your balance, the credit becomes available to you again. This gives you more flexibility than you’d have with an installment loan.
Capital One doesn’t disclose much information about its lines of credit upfront, so be sure to ask about any additional fees. Collateral is required for credit lines over $50,000.
These are the terms and fees for Capital One’s SBA loans:
|Borrowing Amount:||$250,000-$5 million (SBA 7(a) business and real estate loans)
No maximum for 1st mortgage, $5.5 million for 2nd (SBA 504 loans)
|Term Length:||Up to 25 years (SBA 7(a))
Up to 20 years (SBA 504)
|Interest Rate:||See current rates|
|Origination Fee:||0%-3.5% (SBA fee)
Unknown (bank fees)
|Collateral:||Varies by product|
If you need a large amount of money but don’t have the bona fides to get a big loan at a decent rate, you may want to explore SBA loans. The Small Business Administration (SBA) doesn’t directly lend to businesses, but it does guarantee a percentage of loans made by its lending partners, including Capital One. This guarantee allows business owners to get far better rates and terms than their borrowing profile might otherwise allow.
Capital One is old-school when it comes to loans. You’ll need to make a trip to your nearest Capital One branch and speak to a loan officer to begin the process.
Sales & Advertising Transparency
Capital One doesn’t provide much information about its products upfront. You’ll find some general information about the types of products the company offers online as well as recommendations for related products.
Customer Service & Technical Support
You can contact Capital One through its general customer service number. If you’d prefer a more direct approach, you can use Capital One’s website to locate the right department and either submit a ticket or call the department directly.
If you prefer social media, the bank is active on Facebook, Twitter, YouTube, LinkedIn, and Instagram.
As is the case with most other big banks, customer reviews of customer service run the gamut.
Negative Reviews & Complaints
Capital One is not accredited with the BBB, but it has an A ranking with the watchdog group; however, the overwhelming majority of the customer reviews are negative. Most reviews are related to credit cards. The company is quick to respond to complaints. Here are some of the more common complaints:
- Dispute Resolution: A number of customers complained about Capital One’s dispute resolution process, which they felt was unfair or unresponsive.
- Fees: A lot of customers complained about the cost and frequency of fees.
- Aggressive Marketing: You’ve probably gotten Capital One credit card offers in the mail, but these customers complained about robocalls and cold calls.
Positive Reviews & Testimonials
Some advantages of getting a loan through Capital One include:
- Relatively Low Qualifications: Compared to many other banks, Capital One doesn’t set hard limits on things such as credit. New businesses, however, may be out of luck.
- Versatile Products: Capital One offers a greater breadth of products than you’ll usually find with an alternative lender.
- Better Rates: Traditional banks will generally have better interest rates than comparable products from alternative lenders.
The irony of Capital One’s success in the credit card market is that the bank’s business credit cards will probably be a more accessible financial product for most businesses. Well-established businesses with a branch nearby may find Capital One’s loans and lines of credit to be a convenient solution. Unfortunately, the company doesn’t make it easy to compare rates without sitting down with a loan officer.