PNC Small Business Financing: 2022 Review


PNC Financial Corp., headquartered in Pittsburgh, Pa., is one of the largest banks in the country. It was formed in 1983 when two banks dating back to the mid-19th century — Pittsburgh National Corporation and Provident National Corporation — merged. PNC has retail branches located in 28 states (mostly in the Midwest, Southwest, California and along the East Coast) and the District of Columbia.

PNC offers both conventional and SBA-backed business lending products. You can apply for business term loans, lines of credit and lending products for vehicle purchases or commercial real estate.


Overview: Amounts, rates and fees

PNC loans large amounts of money to highly-qualified small business owners, plus some SBA offerings.

PNC Financing At a Glance

Financing productAmountTermsStarting rateFeesMin. credit score
Term loan (unsecured)$20,000 to $100,00024 to 60 monthsFixed rate, starting rate not disclosedNot disclosedNot disclosed
Term loan (secured)$100,001 to $3,000,00024 to 84 monthsFixed or variable rate, starting rate not disclosedNot disclosedNot disclosed
Commercial real estate loan$100,001 to $3,000,00060 to 180 months (up to 25-year amortization)Fixed or variable rate, starting rate not disclosedNot disclosedNot disclosed
Vehicle finance loan$10,000 to $250,00024 to 72 monthsFixed, starting rate not disclosedNot disclosedNot disclosed
Line of credit (unsecured)$20,000 to $100,000RevolvingVariable rate, starting rate not disclosedAnnual fee of $175Not disclosed
Line of credit (secured)$100,001 to $3,000,000RevolvingVariable rate, starting rate not disclosedAnnual fee of 0.25%Not disclosed
SBA 7(a) loanUp to $5,000,000Up to 300 monthsRates vary, subject to SBA maximumsNot disclosed, though you may run into prepayment penalties on loans with terms more than 15 yearsNot disclosed
SBA 504/CDC loanUp to $5,000,000 for most industries Up to $5.5 million for some energy-efficient or manufacturing projectsUp to 300 monthsAbout 3.00%Not disclosedNot disclosed

Term loans

PNC offers small business term loans that are either secured or unsecured. Unsecured loans tend to come with higher rates and are available for loan amounts $100,000 and under. If you’re borrowing more than $100,000 at PNC, you’re only eligible for a secured loan, which will require you to put up collateral. You can borrow up to $3,000,000 with the proper collateral.

Collateral can include:

  • Machinery
  • Equipment
  • Other non-real estate assets

Terms can be as short as 24 months, and unsecured loans can have terms that go up to 60 months. If your loan is secured, term lengths can go up to 84 months. Payments are due monthly and will be automatically withdrawn from your business checking account. However, PNC doesn’t publicly disclose specific rate ranges or fee schedules for its business lending products.

Lines of credit

A line of credit is a flexible funding source to borrow against when you need it. When you make a withdrawal with a PNC line of credit, you’ll then make monthly payments until the amount you’ve borrowed is repaid. You can then borrow against the line of credit again in the future.

PNC offers both secured and unsecured lines of credit for small businesses. Unsecured lines of credit are issued for amounts of $20,000 to $100,000, and require no collateral. When you repay this line of credit, you’ll have to repay at least 1.5% of your balance on a monthly basis, or $100 —  whichever is greater.

Secured lines of credit are available for amounts of $100,001 to $3,000,000. Interest-only payments are required on a monthly basis and you can repay the principal at your own pace. It is recommended that you repay the principal as quickly as possible, though — otherwise, you’ll end up paying more in interest than is necessary. Collateral for a PNC secured line of credit can include non-real estate business assets.

SBA 7(a) loans

SBA 7(a) loans most often act the same way as term loans. They’re backed by the Small Business Administration (SBA), and are considered an attractive option due to their generous repayment terms and comparatively low interest rates.

The maximum loan amount for an SBA 7(a) loan is $5,000,000. In addition, there are annual fees and a guaranty fee of 2% to 3.5%, though they are charged to PNC rather than you as the individual consumer. However, you may see these fees passed along to you as closing costs when you sign for the loan.

SBA 7(a) loans through PNC are most commonly used for:

  • Commercial real estate
  • Renovations or improvements
  • Business acquisitions
  • Expansions or startups
  • Franchise purchases
  • Equipment or inventory
  • Working capital
  • Refinancing existing debt

You may run into prepayment penalties on SBA 7(a) loans if you have a term of greater than 15 years. This can happen when you pay off more than 25% of the outstanding balance within the first three years of loan disbursement.

SBA 504/CDC loans

SBA 504/CDC loans are often used for commercial real estate purchase, heavy equipment, construction, major renovations and debt refinancing. Typically, these loans also have a maximum of $5,000,000, though if you’re working on an energy-efficient or manufacturing project, you may be able to secure up to $5.5 million.

Terms can be anywhere between 120 and 300 months, and as of April 2022, interest rates are about 3.00%. The SBA will charge PNC a one-time guaranty fee of 0.50% on SBA 504 loans, plus an annual fee of 0.2475% (You’ll likely see PNC pass these costs along to you as the consumer via closing costs on your loan.)

Commercial real estate

Through PNC, you can also opt for a conventional commercial real estate loan that’s not backed by the SBA. These loans are available for amounts of $100,001 to $3,000,000, with terms between 60 and 180 months, with a 25-year amortization period. Rates can be either fixed or variable, but PNC isn’t transparent with specific rate ranges across either category.

Payments on these loans are due monthly, and will be automatically paid through your business checking account. In order to qualify for this loan, you must put up equity in owner-occupied real estate as collateral.

Vehicle equipment financing

PNC also offers small business loans explicitly for vehicle equipment financing purposes. You can borrow anywhere between $10,000 and $250,000, and terms can be between 24 and 72 months. PNC doesn’t disclose its rates, but they are fixed on vehicle equipment financing loans.

You can finance up to 100% of the invoice amount for the vehicle(s), which means you might not have to put any money down. This is a term loan, so principal and interest payments will be due monthly, automatically paid through your business checking account.


Requirements: Are you eligible?

You must be a PNC Business Banking customer in order to apply online for any of its business lending products. If you don’t have an established relationship, you’ll need to visit a physical branch to initiate the process.

However, you won’t qualify for a loan if your company has any past late payments or charge-offs with PNC. Similarly, if your company has a checking account with PNC, there’s very little tolerance for a history of overdrafting your account.

Here’s an overview of the eligibility requirements:

  • Minimum credit score: Not disclosed
  • Time in business: 3 years
  • Annual revenue: Not disclosed

PNC doesn’t specify a set minimum credit score, but that doesn’t mean they’ll lend to you if you have poor credit. The lender requires its business borrowers to have a personal credit history of at least five years. It also wants your credit report to be “clean,” which means no recent late payments of 30 days or more, collection accounts, charge-offs, foreclosures, outstanding tax liens, lawsuits or judgements.

PNC will also pull your Equifax Commercial Credit Report to check that your business credit history is free of negative line items and you’re not overleveraged.

While PNC also doesn’t share specific annual revenue requirements, it does openly share that your business must be profitable, and your profit margins must be on an upward trend over the past several years. Otherwise, you won’t qualify for its business lending products.

Required documents

In addition to the above requirements for applying for a business loan, here’s a list of the required documents you should be prepared with when you apply:

  • Business’s name, physical address, phone number and email address
  • Paperwork showing your business structure and the year it was established or acquired
  • Information about when the owner bought or founded the company
  • NAICS industry code
  • Documentation for annual sales and gross revenue
  • Number of employees
  • Business tax ID
  • Most recent business and personal tax returns
  • Government ID for the owner applicant

On top of business information, you’ll also have to provide the following information on anyone who owns more than 25% of the business:

  • Name
  • Address
  • Phone number
  • Email address
  • Social Security number
  • Date of birth

It’s also helpful to know and document how much you’re trying to borrow, what you plan on using the funding for and information about any potential collateral.


Pros and cons of PNC

ProsCons

  Large loan sizes

  Not transparent about rates or fees

  SBA lending products available

  You’re not likely to qualify for a loan if you have blemishes on your credit history

  Clear credit history requirements, even if minimum credit scores are not disclosed

  There are many other lenders who don’t have minimum time in business requirements (PNC requires at least three years)


Review: Should you apply?

A PNC business loan could be good for you if you have a spotless credit history and operated business for at least three years, with year-after-year growth in your profit margins. But it’s probably not worth applying if you’re a new business or an owner whose credit report is riddled with negative line items.

PNC may be a particularly good fit for creditworthy small business owners seeking large sums of money as it lends higher sums than the competition. Conversely, if you only need a small loan, PNC is likely not your best match.


Alternatives to PNC small business loans

Whether or not PNC is worth it in terms of rates and fees is difficult to say, as it doesn’t publicly share its rates. It’s always a good idea to get a few quotes from different lending institutions before signing on to any lending products — that way you can make sure you’re getting the best offer available for your business profile and credit history.

PNC vs. Bank of America

Bank of America is another lender who offers large loans, depending on the product. Bank of America’s minimum loan amounts go much lower than PNC, and it’s also more transparent with its rates, which start very competitively for the applicants with the best credit histories. You’ll only need two years in business versus PNC’s three, but annual revenue requirements are quite high. All in all, these two lenders are likely similar, but it’s hard to judge without full information from PNC.

PNC vs. Wells Fargo

Wells Fargo offers lending products similar to PNC, but generally for smaller amounts of money. For example, while PNC secured lines of credit come with maximums of $3,000,000, Wells Fargo maxes out at $500,000. The flip side of that is that if you’re looking for a smaller line of credit — for, say, $5,000 — you’ll be able to get it at Wells Fargo, but not PNC. Still, like PNC, Wells Fargo also shields its rates from public disclosure.

PNC vs. Commercial Fleet Financing

If you need a vehicle but have less-than-perfect credit, you may want to look at Commercial Fleet Financing over PNC, where the minimum credit score requirement is 640. Loan terms can stretch over a much longer period — up to 108 months — and the time in business requirements are much lower than with PNC. Technically, you’ll need to have been in business for at least two years, but Commercial Fleet Financing will lend to startups if they put 10% to 20% down. Commercial Fleet Financing doesn’t disclose its rates, either, but generally speaking, the lower your credit score, the higher the interest rate you’ll be offered. A high interest rate can be especially harmful when combined with longer loan terms.