|Lender logo||Estimated APR range: Starting from 4.24% Best for: Small business owners with good credit looking for the lowest rates from a traditional bank lender, and large-volume real estate holders.|
SBA Preferred Lender
Low starting APRs
Wide range of financing options
"Quick Loan" expedited application for loans of $250,000 or less
May come with prepayment penalties
Only available in 26 states
Limited information available on website
As the fifth-largest bank by assets in the country, US Bank offers many traditional small business loan options including term loans, lines of credit, equipment financing, SBA loans, commercial real estate loans and even medical practice loans.
Even better, the rates on these loans are quite affordable, especially for business owners with good credit. However, U.S. Bank’s small business operations are only accessible to 26 states, so you’ll need to check if your business is eligible.
|Product||Loan amounts||Repayment term||Estimated APR range||Fees|
|Term loans||Not applicable|
|SBA 7(a) loans||Up to $5,000,000||Up to 10 years for general purpose business loans |
Up to 120 months for real estate loans
|Rates vary, subject to SBA maximums||Not publicly disclosed|
|SBA 504 loans||Up to $12,375,000||24 to 300 months||Rates vary, subject to SBA maximums||Not applicable|
|Commercial real estate loans||Up to $10,000,000||24 to 300 months||Starting from 4.49% APR||Not applicable|
|Lines of credit||Not applicable||Starting from 7.99% APR||$150 (waived for lines of credit under $50,000)|
|Equipment financing||Up to $100,000||24-84 months||Starting from 4.24% APR||n/a|
Depending on your risk tolerance, you can choose from two types of business term loans: secured or unsecured. Keep in mind that with secured loans, you run the risk of having your equipment repossessed if you don’t pay, but you can get lower rates, higher borrowing amounts and longer term lengths. Also be aware that U.S. Bank assumes you have automatic payments set up from a U.S. Bank business checking account; if not, your rates will be 0.50% higher without the autopay discount.
If SBA loans are what you’re after, U.S. Bank may very well be good to check with because it’s an SBA Preferred Lender, so you can get your lending decision faster. It offers three types of SBA loans: SBA 504 loans for commercial real estate loans up to $12,375,000 with 300 months terms, SBA 7(a) loans for real estate loans for up to $5,000,000 (plus an additional $2 million directly from U.S. Bank) with 25-year terms, and a couple of other different SBA 7(a) loan options. If you’re applying for short-term business needs like inventory or working capital, you can choose term lengths up to seven years. Otherwise, it’ll be 10-year term lengths.
Most lenders only offer one generic commercial real estate loan for small business owners. But in addition to the SBA options, U.S. Bank also has two other programs for commercial real estate loans: one for businesses buying property to operate in themselves, and another for business owners buying investment real estate property. For the former, you have a flexible choice between fixed rates or variable rates.
Similarly to U.S. Bank’s term loans, you can choose from either a secured or unsecured option if you’re looking for a business line of credit. U.S. Bank calls its business credit lines “Cash Flow Manager,” and that’s generally how you use it — a revolving credit line to borrow from as you need it. Keep in mind, though, that if you choose the unsecured version, you’re limited to a max business credit line of $100,000 instead of the higher $250,000 if you opt for a secured credit line backed by collateral.
U.S Bank offers a couple of different equipment financing options. If you’re applying for a vehicle that costs anywhere from $5,000 to $100,000, you can use its “quick loan” feature to apply through an expedited process.
But its main equipment financing program is quite attractive too, where businesses may be eligible to finance up to $1 million. Details are limited, but for equipment loans up to 60 months you may be able to get equipment financing without a down payment, and you can even finance up to 25% extra for things like taxes and setup costs. You can even get preapproved for equipment financing so that you can head to the dealership knowing you already have a financing offer in hand. Payments are also flexible with monthly, seasonal or semi-annual options.
U.S. Bank offers special financing options for dentists, veterinarians and optometry professionals, but it doesn’t provide too much detail for its health care practice loans. For example, it offers a “prepayment waiver option,” which begs the question: is there a prepayment penalty? There still is much to like about this loan, however, such as zero-down financing, a six-month interest-only payment program and access to a finance team that specializes just in medical practice finance. You can use the funds to buy into another existing practice, buy a new practice, relocate or expand your current practice.
|Minimum annual revenue||Not publicly disclosed|
|Minimum annual revenue||Not publicly disclosed|
|Minimum time in business||Not publicly disclosed|
|Minimum credit score||Not publicly disclosed|
U.S. Bank is not very transparent about what business requirements you’ll need in order to qualify. But in general, it’s safe to say that as a traditional brick-and-mortar bank, you may need to meet a higher bar than with other types of lenders.
Applying for a business loan with U.S. Bank isn’t too different from any other bank. You’ll need to provide certain documents, such as your business’s formation papers (such as articles of incorporation), financial statements and your business and personal tax returns. In addition, if your business has two or fewer owners, you may be able to apply online (but remember, only business owners living in a state with an operating U.S. Bank branch are eligible for a business loan).
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|U.S. Bank||Bank of America||OnDeck|
|Minimum credit score||Not publicly disclosed||Not publicly disclosed||625|
|Loan products offered||Term loans, medical practice loans, SBA loans, commercial real estate loans, lines of credit, equipment financing||Term loans, lines of credit, auto loans, equipment loans, medical practice loans, SBA loans, commercial real estate loans||Term loans and lines of credit|
|Time to funding||One business day after approval||N/A||As soon as same day|
|Maximum loan size||$12,375,000||$5,000,000||$250,000|
|Minimum annual revenue||N/A||$100,000||$100,000|
Bank of America offers competitive options for most of its loan products, although its commercial real estate loan amounts are lower than U.S. Bank’s offerings. Bank of America, being a larger company by assets, also has nearly twice as many branches as U.S. Bank, so its branch locations are more widely available around the country. The rates on most of its loans are on par with — or cheaper — than U.S. Bank. If you’re a veteran you might also steer more toward Bank of America because it offers a 0.25% discount on loan administration and origination fees.
Traditional brick-and-mortar banks like U.S. Bank are generally great for offering lower rates, but the requirements for approval can be a bit strict. If that’s deterring you and you only need a loan or line of credit, consider OnDeck, since you can get approved with only fair credit. (Be prepared to pay a bit more for it, though.) In addition, OnDeck is more widely available and easier to apply with since you can do it online, and it’s available in every state except Nevada, North Dakota and South Dakota.