Wells Fargo Line Of Credit Review 2024

Pros

• High borrowing amounts
• Rates tend to be inexpensive
• Website advertising is clear & informative

Cons

• High credit score requirements
• Funds can take a while to disburse

What Is Wells Fargo?

Wells Fargo is the third largest bank in America when measured by assets and has branches in 37 states. While it does business with some of the biggest corporations in the world, Wells Fargo also offers SBA loans and lines of credit to small businesses.

Services Offered

Wells Fargo offers small businesses secured and unsecured business lines of credit. Rather than coming in a single lump sum, lines of credit allow customers to borrow against an established credit limit, drawing upon it at will. They can draw as many times as they want so long as they don’t exceed the credit limit, paying interest only on the amount they use.

The bank also offers SBA loans which are partially guaranteed by the federal Small Business Administration. This guarantee allows borrowers to access terms and rates that would otherwise be unavailable to them.

While these options cover a decent range of circumstances, it’s a surprisingly small breadth of offerings from such a huge institution. Borrowing amounts are also on the small side unless you’re going the SBA loan route. It all averages out to a 3.9/5 for services offered.

Borrower Qualifications

Wells Fargo uses several different guidelines to evaluate potential borrowers. In addition to the prerequisites below, Wells Fargo will also look at your capacity to convert assets to cash. If you’ve declared bankruptcy within the last 10 years, the bank will be unlikely to extend credit to you. You’ll also need to have been profitable for the last two years.

All things considered, Wells Fargo’s borrower qualifications are pretty reasonable and transparent — as far as traditional lenders go. The two years in business qualification is standard for banks, but Wells Fargo notably makes provisions for younger businesses with its Small Business Advantage lines of credit. You’ll need good credit to qualify, which is also standard for banks.

The revenue requirements are a little different than you’ll see with a lot of online lenders. Instead of defining a minimum cash flow, Wells Fargo sets the requirement relative to the amount you want to borrow. That said, a 1.5 ratio is a bit higher than average and may put lending out of reach of companies without strong cashflow.

All this considered, we give Wells Fargo a 3.7/5 for eligibility requirements.

Rates & Fees

As a large bank, Wells Fargo offers a wide variety of products through multiple divisions, with excellent terms, low fees, and interest rates close to prime. It doesn’t get too much better than this until you get to the rates offered to large corporations. We give Wells Fargo a 5/5 for rates and fees.

Below is a look at what the bank offers small businesses.

Lines Of Credit

These are the terms and fees for Wells Fargo lines of credit:

Wells Fargo offers three versions of a revolving line of credit to small businesses: two unsecured and one secured. For the uninitiated, a revolving line of credit functions similarly to a credit card. In fact, you can get it linked to a Mastercard access card for more convenient usage. You pay interest only on the amount of credit you’ve drawn upon, and as you pay off your debt, you free up your credit to be used again.

Wells Fargo’s credit line products are the BusinessLine line of credit and the Small Business Advantage line of credit, which are both unsecured lines of credit for businesses that have been in operation for fewer than two years. For businesses with sales between $2 million and $10 million, there’s also the Wells Fargo Prime Line of Credit. This is a secured line of credit. It has different collateral requisites and higher credit limits than the other products. It also features interest-only payments.

• The Small Business Advantage line of credit has a lower limit, between $5,000 and $50,000.
• The Small Business Advantage line of credit has a 5-year term. The others have no scheduled annual review.
• BusinessLine accounts have no annual fee for credit lines less than $10,000. Above $10,000, you’ll be assigned a tiered fee based on your credit limit.
• The Prime Line of Credit has an origination fee but no annual fee.

Advance fees are not charged unless otherwise stated. Advance fees are charged as follows:

• BusinessLine: 3% on ATM and over-the-counter transactions from a bank or financial institution. 4% for wire transfers and Casino Cash when using BusinessLine Mastercard. The minimum transaction fee in both cases is $10.
• Small Business Advantage: 4% for wire transfers and Casino Cash when using Small Business Advantage Mastercard. The minimum transaction fee is $10.

SBA Loans

These are the terms and fees for Wells Fargo SBA loans:

Wells Fargo is an approved SBA lender, offering both 7(a) and 504 loans to qualifying businesses. With SBA 7(a) loans, expect to make a 10% down payment and provide collateral in the form of assets or real estate.

Wells Fargo charges no first-party fees on 7(a) loans up to $150,000. Loans from $150,001 to $750,000 are charged 3% of the guaranteed part of the loan. That percentage rises to 3.75% for loans above $1 million. All SBA 504 loans are charged a fee of 3.5% of the SBA debenture amount.

Application Process

Depending on the product you’re applying for and whether or not you are an existing Wells Fargo customer, you can apply online or in person at your local branch. Note that SBA loan applications must be completed in person.

To apply online for a line of credit, you’ll need:

• Business information including, name, address, phone number, and date established
• Tax identification number or Social Security Number
• Number of owners
• Ownership type
• Gross annual revenue
• Annual household income of every owner with 25% or more interest

Prime Line of Credit applicants will also need to provide:

• Two years of personal tax returns
• A personal financial statement (form provided by Wells Fargo)
• Two years of business tax returns
• Two years of company-prepared, year-end financial statements

Wells Fargo will usually inform applicants of its decision in written form within 10 business days. Prime Lines of Credit will take slightly longer to approve, typically two weeks after all documentation has been submitted.

It all adds up to a transparent but slow application process. This is typical of traditional lenders, but if you want their rates you need to play on their timeline. Wells Fargo gets a 3.8/5 for its application process.

Sales & Advertising Transparency

While Wells Fargo has developed a reputation for behind-the-scenes hijinks, you might be surprised to hear that it has one of the most transparent websites of any large bank, with exhaustive breakdowns of fees and terms in the FAQs.

As large banking websites go, Wells Fargo’s site is easy to navigate. Bank personnel appear to be similarly transparent, although you may have to get transferred a few times to reach someone able to answer all of your questions. The bank has an active social media presence, but its public reputation isn’t exactly stellar. We rate Wells Fargo 4.6/5 for transparency in terms of its business loans.

Customer Service & Technical Support

As a gigantic banking institution, Wells Fargo is not known for its personal touch. Expect to have to navigate through some menus to find the help you need. That said, you should be able to reach someone whenever you need to.

Self-service options are limited to the disclosures you see about the products. Don’t expect any deep dives on how these products work on-site. We give Wells Fargo a 1.7/5 for customer service.

User Reviews

While Wells Fargo can offer a lot of value to small businesses, the bank’s name has become almost synonymous with “questionable business practices.” Wells Fargo isn’t accredited with the BBB, but the company has an F rating with the organization due to a combination of government actions taken against the bank over the past three years, as well as thousands of customer complaints.

It should be noted that most of these complaints concern personal bank accounts and employment practices more than business loans, but regardless, you’re looking at doing business with a company that is, to put it nicely, ethically challenged.

Wells Fargo gets a rating of 1.5/5 for user reviews.

Negative Reviews & Complaints

Among the multitude of complaints about Wells Fargo are:

• Customer Service: Most complaints involved customer service, which often comes across as hard to navigate and ineffective at resolving problems. Note that most of these involve banking service complaints, like overdraft disputes.
• Technical Issues: Related to customer service, several customers report running into glitches and technical problems that make it difficult to use accounts, accurately track their balances, and have payments credited when they need to be.
• Scandals: This is where it gets wild. Wells Fargo’s reputation has suffered due to multiple scandals, including customers being signed up for fake accounts, fraudulent charges, overcharging credit cards, and retaliation against whistleblowers. Will the company ever straighten itself out? It hasn’t yet.

Positive Reviews & Testimonials

While Wells Fargo’s reputation has taken a bit of an online beating, there are positive reviews that praise elements like:

• Efficiency: Several customers found Wells Fargo’s lending processes to be smooth, efficient, and more modern than many of its competitors.
• Accessibility: Wells Fargo operates in most of the country, making it easy to access and meet representatives face-to-face when necessary.
• Willingness To Work With Small Businesses: While many large banks have become wary of giving loans to small businesses since 2008, Wells Fargo offers a robust line of products to customers who don’t have enormous, commercial resources.

Final Verdict

Wells Fargo’s rates, terms, and fees are significantly better than you’ll find in most of the alternative markets and, unlike a lot of other big bank competitors, they’re not completely out of reach of small businesses. In fact, we consider Wells Fargo to be among the best small business loans. The loss of Wells Fargo’s small business term loan programs is a bit of a blow to Wells Fargo’s previous small business-friendly reputation, but its lines of credit still offer a lot of value and decent rates.

On the other hand, the company’s poor consumer reputation can’t be ignored. Are legitimately good products worth dealing with a troubled institution? It all depends on your appetite for chaos, but I’d recommend taking your time, Googling recent news about the bank, and doing your own risk assessment. We give Wells Fargo’s business loans an overall rating of 3.8 out of 5.

Business Loan & Funding Products Review Methodology

Merchant Maverick has been researching and reviewing business lenders since 2015. Our writers have tested over a hundred different funding products, including traditional term loans, online loans, lines of credit, start-up loans, merchant cash advances, and equipment financing. In each review, we evaluate rates and fees, services, eligibility requirements, application process, sales and advertising transparency, customer service, and user reviews.

Read more about how we rate business loans and funding products.

When comparing different lenders and loan products, we consider many data points, including the ease and transparency of the application process, interest rates, repayment structure, sales ethics, time to funding, revenue and time in business qualifications, and credit score requirements. Our lists of the best funding products include only those we’ve deemed worthwhile from multiple vantage points, and often share qualities such as widespread accessibility across fifty states, low rates, flexible requirements, and competitive borrowing amounts.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure the loans and funding products included meet our internal standards for quality and reputation.

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