American Express Business Loans: 2023 Review
Pros and cons of American Express
| Pros | Cons |
|---|---|
No application or origination fees No prepayment penalties Can easily see how much you're preapproved for Applying doesn't impact credit score Can use loan for business expenses or business credit card consolidation | Must complete application online Only available if you've had an Amex small business credit card for at least a year Can only consolidate certain types of credit card debt |
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American Express small business loans review
You might be more familiar with American Express as a credit card company, and indeed it is. But along with business credit cards, it also offers a select number of small business loans, too. And though these are reserved for existing cardholders who have had a small business card for at least a year, they could be a great option if they’re made available to you. These loans feature a quick, fee-free application that won’t impact your credit and decent rates — just make sure that you’re not taking the easy route if you need money, and you’re still doing your due diligence by shopping around.
Who is American Express for?
- You want a quick and easy application that won’t affect your credit.
- You want to consolidate debt from small business cards from other lenders.
- You’ve already had an American Express small business card for at least a year.
American Express small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Term loan | $3,500 to $75,000 | 6, 12, 24 or 36 months | 6.98% to 19.97% | $39 late or insufficient funds fee |
Term loans
American Express‘s small business loans are well-suited for financing small or moderate business needs, such as consolidating existing credit card debt, purchasing inventory or as working capital loans. Amex offers relatively short term loan lengths of 6 to 36 months, and decent rates that start at 6.98% APR. They’re not the lowest rates you’ll find out there necessarily, but they’re not overly high either. Amex makes it relatively easy to get one of these loans if you do qualify, with an easy application process and zero origination or application fees.
If you plan to consolidate credit card debt, you’ll need to borrow at least $3,500 total, which you can split between one and four other cards outside of the Amex system (minimum $1,000 per card). If you’re using the funds for another business purpose, you’ll need to either have them deposited into the bank account connected to your Amex account or another outside business bank account within three days of loan approval — otherwise, your loan will be canceled and you won’t be eligible to reapply until at least 60 days have passed.
American Express borrower requirements
Applying for an American Express small business loan is a bit counterintuitive. If you need to borrow money, you typically go out and get quotes from different lenders. But with an Amex small business loan, Amex will come to you itself and let you know if and when you can apply for a loan — whether you need one right then or not. Only people who have been Amex small business cardholders for at least a year are eligible to apply, and only if you see it listed as an option when you log into your online account.
In addition to these requirements, there are a few other basic small business loan eligibility requirements to keep in mind. You’ll need to be at least 18 years old and a U.S. citizen or resident to apply, and you’ll need to have an email address. You’ll also need fair to excellent credit, although — unlike most other lenders — American Express doesn’t perform a hard credit check after you apply. (Presumably, since you’re already a customer, Amex knows your credit score.)
Required documents
American Express may request other documents from you after you apply, although they don’t specify exactly what these could include. However, when getting a small business loan, you’ll typically need to show paperwork such as your company’s operating agreement, recent tax returns, bank statements or a profit and loss statement.
Alternatives to American Express
| American Express | Chase Bank | Bank of America | |
|---|---|---|---|
| Minimum credit score | 660 | N/A | N/A |
| Loan products offered | Term loan | Line of credit, term loans, equipment financing, SBA loans, real estate loans | Secured and unsecured line of credit, secured and unsecured term loan, auto loan, equipment loan, real estate loan, health care practice loan, SBA loans |
| Time to funding | 3 to 5 business days | N/A | N/A |
| Starting APR | 6.98% | N/A | 6.50% |
| Maximum loan size | $75,000 | N/A, but starts from $5,000 | N/A, but starts from $10,000 |
| Minimum annual revenue | N/A | N/A | $100,000 |
American Express vs. Chase Bank
Chase Bank‘s small business department offers a wider range of products that anyone can apply for at any time — unlike American Express‘s small business loan, which is only available sometimes to certain people. Unfortunately, though, Chase Bank isn’t as upfront about the details of these loans, so it’ll still be on you to compare your options with other lenders. Still, given Chase Bank‘s ubiquity with brick-and-mortar branches, it’d be an especially good option if you prefer to do your small business banking in person.
American Express vs. Bank of America
Bank of America is another great choice for in-person banking, falling just behind Chase Bank in terms of size and the number of branch locations available around the country. It offers an even wider selection of small business financing products, and for an even better rate than American Express term loans. However, Bank of America small business loans are better suited for slightly larger operations: It requires a minimum annual income of at least $100,000, and the minimum amount you can borrow for a term loan is $10,000.