Best Banks For Small Business Loans

Get Started With Wells Fargo Business Loans

Total Rating	3.8
Rates & Fees5.0
Services3.9
Eligibility Requirements3.7
Application3.8
Sales & Advertising Transparency4.6
Customer Service1.7
User Reviews1.5

Pros

Multiple types of financing
Low rates
Easy online application process
Multiple branches nationwide

Cons

Strict credit requirements
Funds can take weeks to be disbursed
Wells Fargo has seen some scandals in recent years

Why Wells Fargo Is Great For Easy Small Business Loans

Wells Fargo offers a good variety of financial products for small business owners. Plus, with over 7,000 branches in 38 states, it shouldn't be too difficult to find a location near you.

Wells Fargo also offers an easy application process. While the process varies based on your chosen product, you can easily apply online for a loan or line of credit without even leaving your home or office. Not all big banks make applying for a loan this easy.

Wells Fargo Features

Through Wells Fargo, you can apply for the following:

Lines of credit up to $1 million
Small Business Association 7(a) loans up to $5 million
Commercial real estate loans, including the SBA 504 loan.

Wells Fargo Interest Rates & Fees

Lines of credit: Rates range from prime + 1.75% to prime + 9.75%
SBA 7(a) loans: Interest rates not disclosed
Commercial real estate loans: Interest rates not disclosed

Wells Fargo Eligibility Requirements

Wells Fargo’s lines of credit generally require at least two years in business with established business credit. However, the company states that you may be eligible for a Wells Fargo Small Business Advantage LOC with less than two years in operation. Your credit line will be limited to $50K, though.

While exact requirements are not given for the company’s SBA loans, Wells Fargo does state that they are “appropriate” for businesses with a net worth below $15 million and an average net income under $5 million.

Wells Fargo Repayment Terms

SBA 7(a) loans: 25 years for commercial real estate, up to 10 years for all other purposes
SBA 504 loans: 25 years for commercial real estate, up to 10 years for machinery or equipment
No other repayment terms are disclosed

When To Use Wells Fargo

You want a line of credit from a bank with numerous locations throughout the US
You want an SBA loan from one of the country's top SBA lenders

Chase Bank Business Loans: Best For Startup Loans

Chase Bank Business Loans

Get Started With Chase Bank Business Loans

Total Rating	3.2
Rates & Fees4.0
Services4.3
Eligibility Requirements2.6
Application1.0
Sales & Advertising Transparency3.8
Customer Service3.4
User Reviews2.6

Pros

Low-interest rates
Few extra fees
Multiple types of financing
Loans for startups & established businesses

Cons

Not available in all states
Strict credit requirements
Slow application process (you must apply in-person)

Why Chase Bank Is Great For Startup Loans

What sets Chase apart from other banks is its low rates -- purported to be some of the lowest in the industry -- and its wide selection of financial products for small business owners.

While Chase is one of the nation's largest banks, its loan application process is quite traditional -- you have to visit your local branch to apply for a small business loan. However, with over 4,700 branches in 49 states, most business owners should be able to find a local branch to kickstart the loan application process.

Chase Bank Features

Chase has financing options for credit-worthy established businesses and startups. These include:

Lines of credit of up to $500,000
Long-term loans
Commercial real estate loans
SBA loans (7(a) loans, 504 loans, and Express loans)

Chase Bank Interest Rates & Fees

Chase Bank does not disclose interest rates for its loan products.

Chase Bank Eligibility Requirements

Chase Bank does not disclose eligibility requirements for its loan products.

Chase Bank Repayment Terms

Term loans: 12 to 84 months
Lines of credit: Renewable 5-year revolving term

When To Use Chase Bank

You want an accessible business loan or line of credit from a bank with locations in 48 states
You want a business loan with terms as long as 7 years

U.S. Bank Business Loans: Best For Fixed-Rate Business Loans

U.S. Bank Business Loans

Get Started With U.S. Bank Business Loans

Total Rating	3.5
Rates & Fees4.7
Services5.0
Eligibility Requirements2.4
Application2.5
Sales & Advertising Transparency4.0
Customer Service2.4
User Reviews2.1

Pros

Multiple types of financing
Low-interest rates
Few extra fees
Good customer service & support

Cons

Strict credit requirements
Not available in all states

Why U.S. Bank Is Great For Fixed-Rate Loans

Borrowers will find that U.S. Bank offers competitive interest rates and very few extra fees. It's one of the largest banks offering quick fixed-rate loans. Additionally, U.S. Bank offers good customer support and has an overall positive reputation among its customers.

As with other bank loans, qualifying is reserved for the most credit-worthy borrowers. Additionally, U.S. Bank doesn't have quite as large a reach as others on this list, with 3,500+ locations in just 29 states. If you're on the East Coast, you'll need to find another lending option. However, if you're in one of U.S. Bank's service areas, consider giving them a try.

U.S. Bank Features

U.S. Bank stands out above its competitors as a small business-friendly bank. U.S. Bank offers numerous financial products suitable for businesses of all sizes, including:

Quick fixed-rate loans up to $250,000
Term loans up to $1 million
Commercial real estate loans up to $10 million
SBA 7(a) and 504 loans

U.S. Bank Interest Rates & Fees

Quick loans: No origination fee, but rates are not disclosed
No other fees or rates disclosed

U.S. Bank Eligibility Requirements

U.S. Bank does not disclose eligibility requirements for its loan products.

U.S. Bank Repayment Terms

Quick loans: Terms up to 84 months
Commercial real estate loans: Terms of 5, 10, and 15 years and amortization up to 25 years
No other repayment terms disclosed

When To Use U.S. Bank

You want a quick, fixed-rate loan from a large bank with a good public reputation
You want to choose from a wide range of business loan products

Bank of America Business Loans & Lines of Credit: Best For SBA Loans

Bank of America Business Loans & Lines of Credit

Get Started With Bank of America Business Loans & Lines of Credit

Total Rating	3.4
Rates & Fees4.2
Services4.4
Eligibility Requirements3.1
Application2.5
Sales & Advertising Transparency3.8
Customer Service2.5
User Reviews2.2

Pros

Multiple types of financing
Competitive interest rates
Good customer service & support

Cons

Not available in all states
Strict credit requirements
Slow application process

Why Bank Of America Is Great For SBA Loans

Bank Of America frequently ranks high on the SBA's most active lenders list and was also a prolific distributor of PPP loans during the COVID-19 pandemic. There are over 6,000 Bank Of America branches in 39 states, making it easy and convenient to apply for funding.

Bank Of America Features

Bank of America is an SBA Preferred Lender and offers a number of low-interest SBA loans to its customers, along with other loan types. All told, BofA offers the following:

Term loans
Lines of credit
Commercial auto loans
Equipment loans
Commercial real estate loans
SBA 7(a) loans
SBA 504 loans

Bank Of America Interest Rates & Fees

Lines of credit: Rates “as low as 10%” for unsecured LOCs (9.50% for secured lines of credit); $150 annual fee for secured LOCs (waived the first year)
Term loans: Rates “as low as 7.25%” (6.75% for secured loans), $150 origination fee if approved
Commercial real estate loans: Rates “as low as 6.00%”

Bank Of America Eligibility Requirements

Term loans and unsecured LOCs: 2 years in business under current ownership, $100k+ in annual revenue, and “typically” a personal FICO score of 700+
Secured LOCs: 6 months in business under current ownership and $50k+ in annual revenue
Commercial real estate loans: 2 years in business under current ownership and $250k+ in annual revenue

Bank Of America Repayment Terms

Term loans: 12 to 60 months
Commercial real estate loans: Up to 10 years (with balloon payment), up to 15 years (with full amortization)

When To Use Bank Of America

You want an SBA loan from an SBA Preferred Lender
You want to choose from Bank Of America's broad range of business loan products

TD Bank Business Loans: Best Big 4 Alternative

TD Bank Business Loans

Get Started With TD Bank Business Loans

Total Rating	3.6
Rates & Fees3.8
Services5.0
Eligibility Requirements2.4
Application3.0
Sales & Advertising Transparency3.8
Customer Service3.7
User Reviews2.6

Pros

Excellent customer service
No origination fees on loans under $100K
Competitive interest rates

Cons

Not available in many states
Strict credit requirements

Why TD Bank Is Great As A Big 4 Alternative

While smaller than the other banks on this list, TD Bank nonetheless provides loan options with competitive interest rates for businesses of all sizes. TD Bank has 1,100+ branches in 16 states, primarily states located on the East Coast.

In addition to its wide breadth of financial products, TD Bank sports excellent customer service. If you're in the eastern US and are looking for an alternative to the Big Four banks, look no further than TD Bank.

TD Bank Features

TD Bank offers business financing as follows:

Business term loans up to $1 million
Lines of credit up to $500,000
SBA 7(a) and 504 loans
Commercial mortgages

TD Bank Interest Rates & Fees

TD Bank doesn’t disclose interest rate ranges but does state that there are no origination fees for business loans under $100,000.

TD Bank Eligibility Requirements

TD Bank doesn’t disclose eligibility requirements on its site.

Loans under $250k can be applied for online. Loans over that amount must be applied for in person.

TD Bank Repayment Terms

Business term loans: 3 to 5 years amortization
No other repayment terms disclosed

When To Use TD Bank

You want a business loan from a sizable bank, but not one of the Big Four banks
You're on the East Coast and you want a business loan with a competitive interest rate

Business Loan & Funding Products Review Methodology

We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.

Weighted Rating Breakdown

Rates & Fees 20%

Services 20%

Eligibility Requirements 20%

Application 15%

Sales & Advertising Transparency 10%

Customer Service 10%

User Reviews 5%

When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.

Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating

Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.

Read more about how we rate small business lenders.

Types Of Bank Loans For Business

As traditional lending institutions, banks usually offer a full spectrum of financial prospects to their customers. None of these are inherently “better” than any other, but they each come with their own sets of qualifications and terms that may make one product the superior choice for a specific business.

Term Loans

Term loans provide the borrower with a lump sum of money. You’ll then pay the amount you borrowed, called a principal, back over a timeframe called a term, plus interest. Banks usually deal in long and medium-term loans with terms longer than one year. Banks are less likely to deal with short-term loans. Our guide to short-term loans goes into further detail as to how they work.

Most banks offer both types, so make sure you know the difference between secured vs unsecured loans. Secured loans are backed by collateral, typically an asset or a cash deposit. As a result, they usually have lower rates and higher borrowing limits than comparable unsecured loans.

Lines Of Credit

Where term loans grant you a lump sum, lines of credit instead give you the ability to borrow money up to your credit limit for a specified amount of time. Most are revolving lines of credit, meaning that you can reuse credit after you have paid it off.

Whereas term loans are used for working capital, expansions, and equipment, lines of credit are more often used for miscellaneous expenses or to smooth out a company’s cash flow. They can also provide a bit of security for unexpected expenses. Like term loans, lines of credit may be secured or unsecured.

Equipment Financing

Equipment loans are a type of secured term loan that is specifically for buying equipment for your company. They follow, more or less, the same rules as term loans, but the asset that you’re purchasing is used as security for the loan.

SBA Loans

Many banks offer SBA loans. These come in a variety of different forms, the most common being the SBA 7(a) loan and the SBA 504 loan.

The SBA doesn’t originate loans, but it does provide a guarantee on loans offered through other institutions (such as banks), allowing businesses that wouldn’t otherwise qualify for financing to access capital at competitive rates and terms. Just be prepared for a longer application process.

How To Qualify For The Best Bank Loans For Business

So you like what you see and want to work with a bank? Well, there’s a reason the alternative lending market exists, and it’s because getting a bank loan can be quite challenging these days. If you want to maximize your chances of being approved, here are some things you can do.

Watch & Repair Your Credit

Traditional lenders care about traditional markers of trustworthiness, and that, unfortunately, means you’re going to need good credit. If your credit isn’t in the high 600s or better, most banks will be hesitant to take a risk on you.

Check your credit score via a free credit score site. And if your credit needs work, learn how to improve your personal credit score.

Thankfully, it’s possible to find business loans for startups with bad credit.

Have A Business Account With The Bank

If you don’t look like a fantastic borrower on paper, you can still build a relationship with your prospective bank by being a customer. Not only can this give you room to negotiate, but it will also make it easier to apply when you’re ready. Additionally, some banks will only lend to customers who have accounts with them, regardless of how good your credit is.

Watch Your Cash Flow

It should be obvious, but banks don’t want to lend to customers who are financially unable to pay back their loans. Formulae vary from bank to bank — for example, Wells Fargo likes to see $1.50 in revenue for every $1 you borrow — but you’ll want to make sure you have some margin for error for making your payments.

Learn how to calculate your debt service coverage ratio (DSCR), so you can assess whether you’re a good candidate for a bank loan.

Have A Good Track Record As A Business Owner

Most banks will want to see that you’ve been able to keep a business afloat for a while. That means having been in business for two to three years, minimum. If you need help before that, you may want to look at alternative business lenders.

Have Documentation Ready

If you’re applying to a bank where you also have business accounts, you’ll save some labor here. However, you’ll still need to be ready to produce a host of documents (doubly so if you’re applying for an SBA loan). These are things such as tax returns, proof of business registration, personal identification, financial statements, collateral (if applicable), information on any other loans you might have, and your business plan.

We recommend that you learn how to write a good one-page business plan before you apply for a loan.

Alternatives To Small Business Bank Loans: Online Lenders & Nonprofits

Have banks rejected you? Did you read the above section and are now worried you probably won’t qualify for a small business bank loan? Do you need money faster than most banks can deliver it? Are you just starting and need a cash infusion?

You’re not alone. In fact, there’s a large market for people like you.

How Online Lenders & Nonprofits Are Different From Banks

Since the Great Recession tightened lending standards a decade ago, an alternative online market has grown that’s focused on getting money to businesses with poorer qualifications. Banks themselves, or investors with an appetite for risk, usually finance these companies. They also tend to have much easier and quicker applications, making them appealing to businesses that need money immediately.

Of course, this comes with a trade-off. While the seedier alternative lenders tend to fail over time, you still want to enter the alternative market with caution. Even honest and transparent lenders will (probably) have higher rates than a bank would offer you. Your credit score will be less of a factor here, but still, the better your credit score is, the better the rates you can expect.

The other option is to look at programs offered by nonprofits. Of particular interest will be the loans provided by Community Development Financial Institutions (CDFIs). These may be banks, credit unions, loan funds, or even venture capitalists certified by the CDFI Fund.

CDFIs are often open to new businesses — even most online lenders shy away from businesses that haven’t been around for at least six months — and usually have good interest rates, though not as good as those of banks. Just be prepared for a lengthy application process as you try to match your needs with those of existing programs.

Where To Find Online Lenders & Nonprofits

Online lenders are very easy to find. In fact, it’s almost impossible not to stumble across them if you do business at all online. However, finding the ones you want to work with will probably take a little research.

To see a broad range of options, our complete list of startup business loan reviews is a great place to do some research.

Nonprofits are a different ballgame. Most operate on a local rather than national level, so you may have to do some research to find the ones in your area. The easiest way to do this is to use the CDFI locator on the Opportunity Finance Network or CDFI Fund websites.

FAQs About The Best Banks For Small Business Loans

How do I get a business loan from a bank?

To get a business loan from a bank, check the requirements of the bank and determine whether you meet those requirements. If requirements are met, you will need to gather paperwork, follow the bank’s application process, which may be completed online or may require you to visit your local branch.

Follow our full guide on how to open a business bank account.

Which bank gives the lowest interest rate for small business loans?

While the top banks in the nation offer competitive rates, it’s possible you may find lower rates at your local small bank or credit union, so make sure to shop around.

Which banks offer business loans?

Most banks and credit unions offer business loans, although the types of products offered may vary. Some popular small business banks include Wells Fargo, Chase, and Bank of America.

What is the best place to get a small business loan?

The best place to get a small business loan is a bank or financial institution that offers multiple products, low rates and fees, long terms, easy application processes, and good customer service and support.

Wells Fargo and Chase are both great places to start or you can check out online banks like Mercury and Novo.

Final Thoughts On The Best Banks For Business Loans

The banks listed in this article are, according to what we’ve found, the best banks for small business loans. Of course, banks also offer business bank accounts, which can be crucial to managing your business finances.

See our full directory of business bank account reviews to get a true sense of your options.

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Jason Vissers

Expert Contributor at Merchant Maverick

Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University and currently lives in Philadelphia, Pennsylvania.

@jvizz_mm

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1. Wells Fargo Business Loans

❮ ❯

Offers lines of credit, SBA 7(a) & 504 loans, and commercial real estate loans
Rates for lines of credit start at prime + 1.75%
7,000+ branches in 38 states

2. Chase Bank Business Loans

❮ ❯

Offers lines of credit, long-term loans, commercial real estate loans, and SBA 7(a), 504, & Express loans
No rate information disclosed
4,700+ branches in 49 states

3. U.S. Bank Business Loans

❮ ❯

Offers quick fixed-rate loans, term loans, commercial real estate loans, and SBA 7(a) & 504 loans
No origination fee for fixed-rate loans
3,500+ locations in 29 states

4. Bank of America Business Loans & Lines of Credit

❮ ❯

Offers term loans, lines of credit, commercial auto loans, equipment loans, commercial real estate loans, and SBA 7(a) & 504 loans
Rates for lines of credit start at 10% (9.5% for secured credit lines)
6,000+ locations in 39 states

5. TD Bank Business Loans

❮ ❯

Offers term loans, lines of credit, and SBA 7(a) & 504 loans
No rate information disclosed
1,100+ locations in 16 states