With headquarters in Birmingham, Alabama, BBVA Compass provides financial products and services to consumers, small businesses, and commercial and CIB clients across Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. In particular, small business owners within the bank’s jurisdiction seeking business loans will likely consider BBVA Compass Bank business loans at some point during their search.
The suite of BBVA Compass Bank business loans is pretty much what you’d expect from a traditional lending institution: they offer conventional, all-purpose lump-sum financing, lines of credit, real estate loans, and SBA loans. But unlike most banks, BBVA Compass Bank makes a good amount of information about their business loans readily available on their website (most banks, on the other hand, require in-person consultations before providing details about their loans).
In this review, we’ll share pertinent information about BBVA Compass Bank business loans so you can better determine whether this banking institution can serve your needs—and if this particular bank isn’t the right fit for you, we’ll provide you with a couple of alternative lenders to consider that can offer more accessible financing.
An Overview of BBVA Compass Bank Business Loans
In addition to BBVA bank accounts, BBVA credit cards, merchant services, and tailored financial programs, the bank offers their small business client four types of small business loans. Let’s go through the details of each of these BBVA Compass bank loans:
Business Line of Credit
Business lines of credit are among the most flexible types of loans available to small businesses, because you can use them on an as-needed basis: Your credit line will sit in reserve if and until you decide to use it. If you do need to tap into your loan, you’ll simply pull whatever amount you need up to your credit limit and only repay the funds you use. After you’ve repaid what you owe, your lender will restore your line to its original amount.
Because of that flexibility, business lines of credit are some of the best financial tools for attending to unforeseen emergencies or seizing new opportunities—whether that’s fixing a broken pipe, replenishing your inventory after a major order comes through, onboarding a wave of new hires, or simply to use as working capital.
BBVA Compass Bank offers secured lines of credit of $10,000 and up, and the length of your term depends on the value of your collateral. Unsecured lines of credit from BBVA Compass Bank are $100,000 and up with a maximum term length of 12 months. Whether your line is secured or unsecured, you’ll make interest-only payments if you take a traditional line of credit. Alternatively, you can apply for a Convenience Line of Credit, which is an unsecured line up to $100,000 on which you’ll make payments worth either 2% of your outstanding balance or $50, whichever is the greater amount.
Business Term Loan
Business term loans are lump sums of cash that you’ll repay, plus interest, over a predetermined period of time. Because of that fixed repayment plan, term loans are best used for financing major projects with predictable amounts, like purchasing equipment or renovating your facilities.
BBVA Compass Bank’s term loans may be secured or unsecured, and they’ll carry competitive, fixed rates with terms up to five years (or 10 years for healthcare professionals). The bank will work with you to design a repayment plan that works for your business’s financials.
Commercial Real Estate Loan
If you need help financing a real estate-related project—like purchasing or refinancing owner-occupied real estate, expanding or improving your facilities, or purchasing equipment—consider a commercial real estate loan from BBVA Compass. Because these loans finance major projects, terms may last up to 25 years (with a minimum of five), and loan amounts exceed $25,000 at either fixed or variable interest rates with no balloon payments. You may receive up to 85% loan-to-value (LTV) financing for owner-occupied commercial real estate, or 70% for non-owner occupied property.
The U.S. Small Business Administration is an independent federal agency whose primary mission is to help American small businesses start, grow, and thrive. One way they achieve this mission is through their loan programs. Intermediary lenders, like BBVA Compass Bank, disburse SBA loan funds proper, but they’re partially guaranteed by the federal agency in case the borrower defaults. So if you can secure an SBA loan, you’ll enjoy among the highest loan amounts, lowest interest rates, and longest repayment terms on the market.
On the downside, SBA loans can be notoriously slow to fund, as the application process requires tons of paperwork. And because so many small business owners apply for SBA loans, their approval standards are rigorous. But as an SBA National Preferred Lender, BBVA Compass can process SBA loan applications in-house, which streamlines and expedites the process; also, the bank’s SBA Lending Group is uniquely qualified to help your business position yourself favorably so you have the best possible chance of snagging one of these highly coveted loans.
BBVA Compass Bank can offer small business owners three types of SBA loans:
SBA 7(a) loans can be used for virtually any purpose, as long as it’s approved by the SBA. Loan amounts range between $350,000 and $5 million at either fixed or variable interest rates, but they won’t exceed the SBA’s set limit. SBA 7(a) loan terms vary depending on the use of your loan: up to 25 years for real estate projects, 10 years for equipment or business acquisition, or five to seven years for working capital.
SBA 504 loans must be used for real estate- or equipment-related projects. An SBA 504 loan from BBVA Compass Bank can range between $2 million to over $15 million, at either fixed or variable interest rates within range of the SBA’s maximum. SBA 504 loan terms fully amortize over either 10 years for an equipment loan, or 20 years for a real estate loan.
Conventional SBA loans can be used for any purpose, including those that aren’t specifically eligible under the SBA 7(a) loan program. Loan sizes are unlimited, so amounts vary depending on the individual applicant’s needs and financials. Here again, interest rates may be fixed or variable, and loan terms also depend on the use case: you can generally expect a 20-year amortization with a five-year balloon payment for real estate projects, five years for equipment purchases, and one year for a working capital line of credit.
Also be aware that you’ll need to pay additional SBA loan fees, all of which are clearly delineated on the BBVA Compass Bank website.
2 Alternatives to BBVA Compass Bank Business Loans
Like most banks, BBVA Compass Bank doesn’t provide specific information about their loan eligibility requirements; but as a traditional lending institution, it’s likely that they’ll only approve the businesses that pose the least-possible risk—which means a super-strong credit score, healthy annual revenue, experience in your industry, and, depending on the type of loan you’re applying for, sufficient collateral.
If you can’t yet qualify for BBVA Compass Bank loans, give alternative lenders a shot. While these tech-forward lenders can’t promise the same generous loan terms that a brick-and-mortar bank can, their eligibility standards are much less stringent than old-school banks’. They key is only to work with the most trustworthy, premium online lenders whose loans you can qualify for. Here are two of your best options, both of which are within the Fundera network:
Kabbage Line of Credit
Business owners seeking accessible, flexible financing should look into a short-term line of credit from Kabbage. This Atlanta-based online lender can offer qualified business owners lines of credit up to $250,000 with either six-, 12-, or 18-month term lengths. Interest rates range between 1.5% and 10%, the majority of which you’ll pay upfront according to a predetermined fee schedule. Kabbage’s fee structures are fairly unusual, but they’re clearly outlined on their website.
To be eligible for a Kabbage line of credit under $100,000, you’ll need at least $50,000 in annual revenue, a 550 credit score, and at least a year in business. If you’re applying for a line of credit greater than $100,000, eligibility requirements bump to at least $1 million in annual revenue, 680 personal credit score, and three or more years in business.
The application process is all online, so applying will only take a few minutes of your time (and you won’t need to step foot in an actual bank to do so). After applying, you’ll also find out what your fee structure would look like. Even if you do qualify for a Kabbage loan, you’re under no obligation to use your funds, so there’s really no harm in lobbing in an application.
Fundation Term Loan
If you’re seeking conventional, lump-sum financing, consider a term loan through Fundation, another top lender within the Fundera network. This online lender can provide medium-term business loans up to $500,000 at erm lengths up to four years. Your interest rate will be based on your particular business’s credentials—including your financials, the stability of your business, your credit score, and your cash flow—but you can generally expect your rate to range between 7.9% and 28.9%.
To be eligible for a Fundation term loan up to $200,000, at a minimum you’ll need to come to the table with $100,000 in annual revenue, 660 personal credit score, and a year in business. Eligibility for loans greater than $200,000 will require stronger numbers: at least $750,000 in annual revenue, 720 personal credit score, and five years in business. Like Kabbage, Fundation’s application is all online; and, in general, you can expect a response on your application within two to three days of applying.
The Bottom Line on BBVA Compass Bank Business Loans
BBVA Compass Bank business loans are designed to address a range of financial needs, whether it’s working capital, making a real-estate related purchase, buying equipment or other major fixed assets, or trying your luck at a coveted SBA loan. So if you think you’re well-positioned to secure BBVA Compass Bank business loans, you’ll need to fill out an application and gather additional documentation, all of which is detailed on the bank’s Customer Application Checklist.
But if you’re not yet eligible for BBVA Compass Bank business loans—or if you’re not based near one of the bank’s locations—consider working with an online lender, instead. Kabbage and Fundation are just two of your best options, but there are so many more trustworthy lenders to explore in addition. And if navigating the world of online or bank lending feels daunting, work with a loan expert who can guide you through the entire process, from pinpointing your best loan offers to sending in your application.