The Best Banks For Small Business Loans

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Not impressed with the easy applications but high interest rates offered by alternative lenders? Well, the good news is that, despite the ubiquity of online financing, most of the best rates in the business continued to be offered by local banks and credit unions. Because you’re likely to encounter stricter credit requirements, as well as geographic constraints, the best bank for your small business is often one you’ve already built a good relationship with. Below we’ll look at a few of the biggest financial institutions that offer business lines of credit, business term loans, and SBA loans, as there’s a better chance of them operating in your area.

If your credit is below 600 or your business hasn’t been around very long, you’ll likely have a hard time qualifying for a bank loan from any of the lenders below. Online lenders like Ondeck, Lendio, LoanBuilder, and National Business Capital often have less stringent qualifications when it comes to credit scores and time in business. Our small business loan comparison chart can point you in the right direction.

Here are the best banks for small business loans.

1. Chase Bank

Best For: Small businesses and start-ups with excellent credit.

Borrower requirements:
• Must have excellent credit (high 600s)
• Must have access to a Chase Bank branch
Read our Chase Bank review

Checkered reputation aside, Chase is one of the largest and most accessible banks, boasting tons of locations — especially in the nation’s most populous states. Chase Bank also features some of the best small business loan rates you’re likely to see from a for-profit lender.

Chase offers business lines of credit, business term loans, and SBA loans to small businesses.

How To Apply For A Chase Loan

Despite its position as industry leader, Chase is surprisingly traditional when it comes to the lending process; you’re going to have to go to a branch and meet with a Chase representative in person.

Takeaway

With high credit requirements, Chase is a fortress that’s tough to breach, but businesses with excellent credit will find some of the best rates in the industry.

2. Wells Fargo

Best For: Businesses looking for a modern and easy application process.

Borrower requirements:
• Must have $1.50 in cash flow for every dollar borrowed.
• Must have a personal credit score of 640 or above.
Read our Wells Fargo review

Wells Fargo (read our review) has developed a reputation for being a big bank that’s willing to work with small businesses. Like Chase, Wells Fargo has made some headlines for the wrong reasons in recent years, but most of those aren’t related to this area of lending.

Wells Fargo is notable for offering fast, unsecured business loans online (similar to those of an alternative lender), but at bank rates. The online application process can be especially useful for businesses without a branch nearby.

Wells Fargo offers business terms loans, lines of credit, and SBA loans.

How To Apply For A Wells Fargo Loan

Depending on the product you want, you’ll be able to either apply online at Wells Fargo’s site or will have to go to your local branch to meet with a Wells Fargo representative. You can apply for unsecured loans online.

Takeaway

Businesses seeking bank interest rates with some alternative lender conveniences should give Wells Fargo a look.

3. U.S. Bank

Best For: Mature small businesses outside of the East Coast, including areas underserved by bigger banks.

Borrower requirements:
• Must be located in a state served by U.S. Bank
• Must have been in business for two years
Read our U.S. Bank review

U.S. Bank (read our review) is one of the largest national banks in the country, serving the middle and western parts of the country. For some areas, it is the biggest banking institution available.

U.S Bank has a reputation of being a bit more personable and flexible than many of its similarly-sized or larger competitors while offering competitive interest rates. Just be aware, U.S. Bank prefers to lend to well-established businesses.

You can get a term loan, line of credit, or SBA loan through U.S. Bank.

How To Apply For A U.S. Bank Loan

U.S. Bank provides several options for application, which you can do by submitting a contact form, calling them directly, or going to your local branch. You will, however, eventually need to meet with them personally to complete your application.

Most importantly, you’ll need to live in one of the 25 states served by U.S. Bank.

Takeaway

U.S. Bank may be a good option for established companies that may not want to do business with a huge, international behemoth. East Coasters will have to look elsewhere, however, as the bank has no immediate plans to enter that market.

4. Bank of America

Best For: Mature businesses with excellent credit.

Line of credit borrower requirements:
• Must have been in business at least 2 years.
• Must have a personal credit score of 670 or above.
• Must have revenue > $200,000 for unsecured products, or greater than $250,00 for secured products.
Read our Bank of America review

Bank of America (read our review) is one of the more conservative lending institutions on this list, but it does offer a versatile array of products at excellent rates and, as the second largest bank in the country, is accessible to most population centers in the U.S.

Despite stringent lending standards, the bank has modernized its application processes more than some of the other banks on this list.

Bank of America offers business lines of credit, business term loans, and SBA loans to small businesses.

How To Apply For A Bank of America Loan

If you already have a Bank of America ID (from an existing account), you can use it to apply for unsecured loans and lines of credit on the Bank of America site.

You’ll need to submit basic information about yourself and your business, as well as your number of employees, profit, sales, outstanding obligations. You’ll also need to submit personal information about each additional business owner, guarantor, and controlling manager.

Depending on the product, you may need to have a business checking account with Bank of America if auto-debiting is required.

If you’re not a current customer, you’ll need to apply by phone or at your local branch.

Takeaway

Bank of America offers some online convenience for existing customers while providing the excellent rates you’d expect from a large banking institution. Their steep prerequisites might disqualify many businesses, however.

5. TD Bank

Best For: Mature East Coast businesses with excellent credit

Borrower requirements:
• Must have been in business for 2 years
• Must have excellent credit, 680 or above
Read our TD Bank review

T.D. Bank (read our review) may be of particular interest to readers located on the East Coast (particularly those who let out a forlorn sigh when they read that U.S. Bank doesn’t operate in their region). T.D. Bank operates almost exclusively on the East Coast and can be a good option for those looking to avoid the Big Four.

Businesses seeking less than $100,00o in funding will appreciate the fact that T.D. Bank doesn’t charge origination fees on small loans.

Small businesses can get a term loan, line of credit, or SBA loan through T.D. Bank.

How To Apply For A T.D. Bank Loan

While they’re fairly traditional, T.D. Bank gives you the opportunity to begin your application from home by downloading forms available on their site. Depending on the type of financing you’re seeking, you may need to attach additional information or forms.

You can also submit your information in a contact form if you’d like a representative to help walk you through the process.

Takeaway

While East Coasters usually have a lot of banking options available to them, T.D. can be a reasonable compromise for those looking to working with a reasonably large, but not behemoth lending institution.

Final Thoughts

You have as many potential bank loan options as you have banks operating in your area. That said, they can be tough nuts to crack, especially for businesses with less-than-perfect credit.

Don’t think you can make the cut for a traditional bank loan?

Online lenders, like Ondeck and Lendio, aren’t quite as particular when it comes to credit scores and time in business. Our small business loan comparison chart can point you in the right direction.

Chris Motola

Chris Motola

Chris Motola is an independent writer, journalist, programmer, and game designer who has mastered the art of using his laptop in no fewer than 541 positions, most of them unergonomic. When he's not pushing keys or swiping screens, he's probably out exploring urban or natural environs, experimenting in the kitchen, or delighting/annoying his friends with his ideas and theories.
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