As a traditional brick-and-mortar bank, Bank of America offers term business loans, SBA loans, lines of credit and equipment financing options. With more stringent eligibility criteria than some lenders, Bank of America small business loans may be a good fit if you have an established business and strong personal credit.
Bank of America small business loans offer a variety of financing options for small business owners including lines of credit, auto loans, commercial real estate loans, equipment loans, and healthcare practice loans.
|Bank of America Small Business Loan Financing at a Glance|
|Business Advantage unsecured line of credit||From $10,000||Revolving with annual renewal||As low as 4.50%||None|
|Secured business line of credit||From $25,000||Revolving with annual renewal||As low as 3.75%||Upfront and renewal fees vary depending on the amount
|Business Advantage unsecured term loan||$10,000 to $100,000||12 to 60 months||As low as 4.75%||$150, if approved|
|Secured business term loan||From $25,000||
||As low as 2.49% on loans from $100,000 for the first 12 months on qualifying small business conventional and SBA secure term loans. Must apply by Dec. 31, 2021 and close and fund by April 30, 2022||0.50% of amount financed|
|Business Advantage auto loan||From $10,000||48 to 72 months||As low as 2.49% APR||No application fee|
|Commercial real estate loan||From $25,000||
||As low as 3.00%||
|Equipment loan||From $25,000||Up to 60 months if secured by business assets||As low as 3.00%||0.50% of the amount financed|
|Health care practice loans||Up to $5,000,000||Depends on the type of financing||Differs based on loan purpose and term||Varies depending on type of loan, loan terms, and amount financed; discounts available to members of select professional organizations and the military|
|SBA loans||$25,000 to $5,000,000||Up to 300 months||Rates vary, subject to SBA maximums||SBA fees:
Veterans and existing Bank of America business customers may be eligible for one of more of the following free and interest rate discounts.
Preferred Rewards for Business: If you have an active Bank of America business checking account and a an average daily balance of $20,000 or more in qualifying BofA business accounts or investment accounts over three months, then you may be eligible for the following discounts on interest rates with the Preferred Rewards for Business program:
Veteran discount: You may be eligible for a 25% discount on loan administration and origination fees if you’re a veteran, a servicemember on active duty or part of the U.S. Armed Forces reserves or national guard. To qualify, you must submit and be approved for a new small business loan on or after Nov. 1, 2019. This discount does not apply to the Business Advantage auto loan, Business Advantage term loan and Business Advantage lines of credit, as well as fees on renewal of lines of credit or fees charged by third parties, such as the SBA.
The Business Advantage lines of credit can help small businesses cover short-term cash flow needs like payroll, inventory and operating expenses. A business line of credit offers access to your revolving credit, which only requires repayment when you use the money. In contrast, a traditional business loan provides you with a lump sum upfront that you need to pay in predetermined increments, whether you use the funds or not.
Lines of credit are similar to small business credit cards: These products allow you to take only what you need from your credit limit, and they’ll only charge interest on the amount you use, not the amount approved. A secured line of credit requires collateral, while an unsecured line of credit does not. While business credit cards are convenient for small expenses in the short term, lines of credit provide long-term financing for larger amounts at lower interest rates.
Business Advantage unsecured line of credit:
Business Advantage secured line of credit:
If you want to purchase a car, van or light truck for your business, the Business Advantage auto loan might be an option to consider. If you’re looking for commercial vehicles that weigh over 2.5 tons, you would need to consider Bank of America’s equipment loan, not their business auto loan.
Business Advantage auto loan details:
If you want to purchase land or commercial property for your business needs, a Bank of America commercial real estate loan might be right for you. A commercial real estate loan works very similarly to a personal home mortgage: You receive a loan for the purchase price of your property, minus the down payment and any fees you owe. The key difference between the two is that you would use a commercial real estate loan to buy or build property to produce income.
Commercial real estate loan details:
Bank of America’s equipment loan can help you purchase heavy-duty equipment, such as manufacturing lines and printing presses, or general-purchase equipment like office technology. You can also use a BofA business equipment loan to buy commercial vehicles that are greater than 2.5 tons.
Equipment loan details:
Bank of America offers health care practice loans to both established and startup practices. For established practices, Bank of America business loans are available to a wide range of medical specialties. However, financing options for startups are more limited to specific medical specialties, including obstetrics and gynecology, dermatology, ophthalmology and general surgery.
Health care practice loan details:
With loans of up to $5,000,000 and repayment times as long as 300 months, SBA loans are commonly used for general operating costs or real estate purchases. They are guaranteed by the U.S. Small Business Administration, but the loan is made by a financial institution that partners with the SBA. Bank of America is a Preferred Lender for SBA loans, which means that the application process is streamlined and your loan may be processed more quickly.
Bank of America business loans have more stringent eligibility requirements, so this may not be the best fit for newer businesses with weak cash flow. Here is a rundown of the eligibility requirements:
For unsecured loans, unsecured lines of credit and auto loans, you can apply online. All other loans require you to schedule an appointment in person or over the phone to apply with a business lending specialist.
For all Bank of America business loans, you must submit the following documents from your business:
Bank of America business loans also require the following personal information:
With a wide, flexible range of financing options and an A+ rating with Better Business Bureau, Bank of America small business loans may be a good option for established businesses with at least $100,000 in annual revenue.
Bank of America may not be the right fit for a new startup or businesses with an annual revenue under $100,000. If you have a startup or have poor credit, you may want to focus on business credit or finding alternative funding options.
Readers may want to consider other options before applying for funding. Here’s how Bank of America small business loans stack up:
While Bank of America offers a 0.25% discount on interest to veterans and active service members, Navy Federal Credit Union requires that its members be active duty or veterans. If you’re eligible, Navy Federal may be a better option for newer businesses, since it offers term loans for businesses under two years. However, Navy Federal’s term loans and lines of credit are secured, so if you’re looking for unsecured loans, then Bank of America would be a better fit.
With unsecured lines of credit starting at $5,000 for some businesses, Wells Fargo business line of credit may offer a wider range of funding alternatives than Bank of America’s line of credit options. Plus Wells Fargo’s Small Business Advantage unsecured line of credit offers funding for businesses in operation less than two years, compared to Bank of America’s two-year requirement.
If your business has been in operation for less than two years, or if you struggle to meet Bank of America’s annual revenue requirements, the online lender Funding Circle may be a good option for you. Funding Circle has no minimum annual revenue requirements and offers funding to those with credit scores below 700. But while the eligibility and credit criteria are less strict than Bank of America, Funding Circle business loans do have significantly higher interest rates.