Bank of America Small Business Loans & Financing: requirements and How to apply

Bank of America offers both secured and unsecured lines of credit to small businesses, each with distinct features and benefits.

Secured Business Lines of Credit:

• Purpose: Primarily used to support ongoing operational expenses.
• Collateral: Typically secured by a blanket lien on your business assets or a Certificate of Deposit (CD).
• Benefits:
  • Lower interest rates compared to unsecured lines of credit.
  • Potentially higher credit limits depending on the value of your collateral.
  • Revolving credit line, meaning you can borrow, repay, and borrow again as needed.
  • No cash advance fees.
  • No interest charges until you use the funds.

Unsecured Business Lines of Credit:

• Purpose: Can be used for various purposes, including operating expenses, inventory purchases, or unexpected costs.
• Collateral: No collateral is required, making it more accessible for businesses with limited assets.
• Features:
  • Credit lines ranging from $10,000 to $100,000.
  • Flexible access to funds through online banking, checks, or a debit card.

Cash Secured Business Line of Credit:

• Purpose: Specifically designed for businesses looking to build or improve their credit history.
• Collateral: Secured by cash in a Bank of America business savings or checking account.
• Benefits:
  • Opportunity to graduate to an unsecured line of credit over time.
  • Lower interest rates compared to credit cards.

Which is Right for You?

The best option for your business depends on various factors, including your credit history, financial needs, and available collateral.

I recommend comparing the features and requirements of both secured and unsecured lines of credit to determine which one aligns with your business goals. You can also reach out to a Bank of America small business specialist for personalized guidance.

Bank of America offers equipment loans to help businesses finance the purchase of new or used equipment essential for their operations.

Key Features of Bank of America Equipment Loans:

• Loan Amounts: Starting from $25,000 with no set upper limit.
• Loan Terms: Up to 5 years when secured by business assets.
• Interest Rates: Competitive and can be as low as 7.25%, depending on your creditworthiness and loan terms.
• Benefits:
  • Helps you acquire necessary equipment without depleting your cash reserves.
  • Offers flexible repayment terms tailored to your business’s cash flow.
  • May provide tax advantages through depreciation deductions.
  • Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
  • Fee discounts are available for veteran-owned businesses.

Eligibility Requirements:

• Minimum of 2 years in business under existing ownership.
• Minimum annual revenue of $250,000.

How to Apply:

1. Visit the Bank of America Equipment Financing page:
2. Gather your financial documents, including business tax returns and financial statements.
3. Contact a Bank of America small business specialist to discuss your needs and complete the application.

Bank of America has specific requirements for borrowers seeking a business loan. These requirements vary slightly depending on the specific loan product, but generally include the following:

Basic Requirements:

• Time in Business: Your business should have been in operation for at least two years under current ownership.
• Annual Revenue: A minimum annual revenue of $250,000 is typically required for most loans. (Some unsecured loans might have a lower requirement of $100,000).
• Creditworthiness: A good personal credit score is usually required, often with a minimum FICO score of 700 or above.
• Financial Documentation: Be prepared to provide financial statements, tax returns, and a business plan to demonstrate your ability to repay the loan.

Additional Requirements for Specific Loans:

• Secured Loans: May require collateral such as business assets or a Certificate of Deposit (CD).
• Unsecured Loans: May have more stringent credit requirements and lower maximum loan amounts compared to secured loans.
• SBA Loans: May have specific eligibility criteria and additional documentation requirements set by the Small Business Administration.

Additional Information:

• Business Advantage Term Loans: Unsecured loans ranging from $10,000 to $100,000 with terms from 12 to 60 months.
• Business Advantage Credit Line: Unsecured or secured line of credit with flexible access to funds.
• Secured Term Loans: Loans secured by business assets or CDs, offering larger loan amounts and longer terms.
• Equipment Loans: Loans for purchasing new or used equipment.
• Commercial Real Estate Loans: Financing for acquiring, developing, and refinancing commercial properties.

To apply for a Bank of America business loan, you’ll need to provide a combination of personal and business information, along with specific financial documentation. The exact requirements may vary depending on the type of loan and your business’s specific circumstances. However, here’s a general overview of the information and documents you’ll likely need:

Business Information:

• Business name and address (no P.O. Boxes): Ensure you have the official registered name and physical address of your business.
• Business phone number: Provide the main contact number for your business.
• Business Tax ID (Employer Identification Number): This is your federal tax identification number.
• Nature of business: Describe the type of business you operate (e.g., retail, manufacturing, service).
• Date established: Indicate when your business was founded.
• Business acquisition date (if applicable): If you purchased an existing business, provide the date of acquisition.
• Number of employees: State the total number of employees your business has.
• Annual gross sales and net profit: Provide information about your business’s financial performance.
• Outstanding obligations: List any existing business loans or credit lines, including the lender, current balance/credit limit, and monthly payments.

Business Owner Information:

• Name and title: Provide the name and title of the person applying for the loan.
• Social Security number (for U.S. citizens) or passport number and country of issuance (for foreign individuals): This is required for identity verification.
• Residential address: State your current residential address.
• Date of birth: This is also needed for identity verification.
• Ownership percentage: Indicate the percentage of ownership each business owner has.

Financial Documents:

• Business tax returns: Typically, you’ll need to provide the most recent 2-3 years of tax returns for your business.
• Personal tax returns: You may need to provide your personal tax returns as well, depending on the loan type and your ownership stake.
• Profit and loss statements: These documents show your business’s income and expenses over a specific period.
• Balance sheets: These statements provide a snapshot of your business’s assets, liabilities, and equity at a given point in time.
• Bank statements: Provide recent bank statements for your business accounts.
• Business plan (optional): While not always mandatory, a business plan can be helpful to demonstrate your business’s viability and growth potential.

Additional Documents (Depending on Loan Type):

• Collateral information: If you’re applying for a secured loan, you’ll need to provide details about the assets you’re offering as collateral.
• Other relevant documents: Depending on the specific loan program, you may need to provide additional documents, such as articles of incorporation, commercial lease agreements, or licenses and permits.

FAQS

Here are some frequently asked questions and answers regarding Bank of America small business loans:

Q1: What types of small business loans does Bank of America offer?

A: Bank of America offers various types of small business loans, including:

• Business Advantage Term Loans: Unsecured term loans ranging from $10,000 to $100,000.
• Secured Term Loans: Loans secured by business assets or CDs, offering larger loan amounts and longer terms.
• Lines of Credit: Flexible access to funds as needed, either secured or unsecured.
• Equipment Loans: Financing for new or used equipment purchases.
• SBA Loans: Government-backed loans with potentially lower down payments and longer repayment terms.
• Commercial Real Estate Loans: Financing for acquiring, developing, and refinancing commercial properties.

Q2: What are the eligibility requirements for a Bank of America small business loan?

A: Generally, you’ll need to meet the following requirements:

• Be in business for at least two years under current ownership.
• Have a minimum annual revenue of $250,000 (or $100,000 for some unsecured loans).
• Demonstrate good personal and business credit history.

Specific requirements may vary depending on the loan type.

Q3: How do I apply for a Bank of America small business loan?

A: You can apply online through Bank of America’s Small Business Online Banking platform or schedule an appointment with a small business specialist at a local branch.

Q4: What documents do I need to provide for a small business loan application?

A: You’ll typically need to provide:

• Business and personal tax returns for the past 2-3 years.
• Profit and loss statements and balance sheets.
• Bank statements.
• Business plan (optional but recommended).
• Additional documentation may be required depending on the loan type.

Q5: How long does it take to get approved for a Bank of America small business loan?

A: The approval timeline varies depending on the loan type and complexity. Generally, it can take several days to a few weeks.

Q6: Does Bank of America offer SBA loans?

A: Yes, Bank of America is a Preferred SBA Lender and offers various SBA loan programs.

Q7: Can I get a business loan from Bank of America with bad credit?

A: While good credit is preferred, Bank of America may consider applicants with less-than-perfect credit for certain loan products, especially if you can provide collateral or a strong business plan.