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Business loans from major U.S. banks are a highly coveted score among business owners—and Citibank’s small business loans are no exception. Term loans directly from large banking institutions are often offered at longer maturities, lower interest rates, and in larger amounts.
But because they’re great products, those major bank loans are the hardest loans to get a hold of. Lenders evaluating potential borrowers for small business loans, Citibank included, are pretty scrupulous with their requirements.
They look for impeccable creditworthiness and amazing business track records—something that few business owners have, especially startups. And even if you do, since these lenders aren’t the most transparent, there’s still no guarantee you’ll qualify.
If you are curious about Citibank’s small business loans, however, they do have a couple of products to offer qualified borrowers. As a major U.S. financial institution, Citibank touts itself as the small business owner’s one-stop shop for its small business clients. And its presence in more than 160 countries makes it a valuable banking partner for ecommerce and offline companies with plans to go big. It has also been steadily increasing its small business lending in recent years, too.
Here’s what you can expect from Citibank’s small business loans:
Like most major banks, in order to apply for a Citibank small business loan, you’ll first have to have a business bank account with Citi. (And since it’s an absolute requirement to already have a business bank account no matter what small business loan you apply for anywhere, moving over to Citi if you aren’t already a customer shouldn’t be a big deal.)
Businesses bringing in less than $10 million in revenue—which is, you know, is many—are eligible to apply for Citibank small business loans. (FYI: Businesses $10+ million in revenue are considered a mid-sized businesses, and are eligible for other commercial banking services.) And Citi will work with qualified customers on a range of business loans as small as $5,000 all the way up to $1 million.
Citibank offers two main types of small business loans to look into for your business. We’ll go through them here and take a peek at the differences so you can identify if any of them are a good option for you:
This Citibank small business loan is a basic business line of credit product. There are no limits on the kind of short-term expenses that business can use this loan for.
The Citibank Business Credit Account works like any other line of credit product—that means that you’re approved for a certain amount of credit and you can draw against it as you need it. And, of course, you’ll only be charged interest on the amount that you use.
The best thing about a line of credit is that this type of small business loan provides instant liquidity, and for any kind of expense.
The rub here is that to qualify for this Citibank small business loan, you’ll need to have a business that’s been up and running for at least two years, and have it headquartered in very specific regions of the country:
Heads up that this time-in-business and region requirements are specific to this Citibank small business loan. So if you’re looking for a business line of credit in other parts of the country, you have lots of other options you can explore with other lenders (we have some suggestions below).
You can look at some more business line of credit loan options here, and see what you qualify for.
The second small business loan option from Citibank is a typical unsecured business term loan. Borrowers qualified for these loans can borrow a specific amount at a fixed rate on a prearranged schedule, as negotiated with Citibank as the lender.
As this financing will be in larger sums than a line of credit product, you’d want to explore this if you need to invest in your business growing, updating, or thinking big (and looking to fund it accordingly). Those kind of things would need to be paid off over the long term.
For this Citibank small business loan, how Citi evaluates your risk as a borrower (your creditworthiness, revenue, etc.) will all factor into how much you’ll be able to borrow and the rate you’ll get. But bank loans do have competitive rates if you’re able to get one.
It’s also worth noting that Citi offers commercial mortgages in their small business loan products lineup. Since here we’re going to mostly stick to talking about ways Citibank can help small businesses access capital for other expenses that you wouldn’t need to secure a mortgage for, we won’t focus on that here.
But it’s worth letting you know that they do have commercial mortgages available. So, if you are looking for one of these secured business loans—that’s where you will need to put up one of your assets as collateral—and if Citibank likes your credit profile, you’ll likely be able to get a relatively low interest rate and might be able to increase the amount you can borrow with the security of an asset.
For business owners operating in certain sectors, Citibank touts some special packages that combine some of their business services with small business financing. They particularly mention that if you’re a professional in areas including healthcare, accounting, and law (among a few others), you might be eligible for preferred rates for a line of credit or avoid application or closing fees on term loans.
You’ll have to check in with your local Citibank branch to see whether you’re eligible based on your type of profession, as well as your borrowing profile, of course.
The long and short of it—unfortunately, not very many. Small business bank loans are notoriously difficult to qualify for. And since the financial crisis, large banks have become even pickier about whom they’re lending to, which makes these coveted bank loans even trickier to secure.
Citibank is no exception. And although Citibank doesn’t lay out explicit qualifications for you to benchmark yourself against, it’s likely that unless you’ve been in business for quite a while, can demonstrate significant revenue, have strong business credit history, and a high personal credit score, Citi’s small business loans won’t be an option for you. (But if you think you’re qualified, try!)
Along with finding out Citibank’s small business loan qualification criteria, the other reason you’ll also have to head into a bank branch is to find out the actual rates on Citi’s financing products. Unlike alternative lenders that list the rate ranges for their loan products online, Citibank is like most big banks—there’s a lack of transparency into both their qualification for small business loans and their rates. But that’s just the way banks usually work!
If one of Citibank’s traditional small business loans sound out of reach for you, one final product to consider if you’d really like to use a Citi business product is one of their business credit cards. Like all business credit cards, this is a good alternative to access short-term capital, and much faster, if you don’t qualify for a line of credit product.
Small business credit cards are great for short-term expenses and working capital needs, and essentially function as a revolving line of credit. Some do come with much higher interest rates than others, so be choosy before committing to one business credit card over another.
CitiBusiness AAdvantage Platinum Select World MasterCard (see full review)
Costco Anywhere Visa Business Card (see full review)
As you’ve probably garnered by now, it’s hard to get a bank loan!
That’s one of the reasons that exploring alternative lenders is a great idea—a ton of products are available for lots of different objectives and credit profiles. So, just because you might not be a candidate for a Citibank small business loan doesn’t mean you’re down and out for business financing, whether you’re looking for a line of credit or other types of working capital.
Similarly, if you’re in a position where you think a credit card is a better idea for your business right now—especially if you need to establish or rebuild credit history for yourself or your business—then it’ll serve you to look around, too. Business credit cards come in lots of different flavors, shall we say. There’s definitely a card that’ll fit like a glove for your particular needs, whether you’ll benefit most from earning cash back based on a certain spending category or need a 0% introductory APR card so you can carry a balance for a while.
Here are some options:
Alternative lenders, such as BlueVine, Quarterspot, Kabbage, and more, provide small business loans to borrowers with many different backgrounds. You can apply for a loan online through their sites or through alternative lenders, which will work with you for free to directly submit your application and find your most competitive offer.
In general, qualifications for small business term loans through alternative lenders are much for flexible than those required by major banks such as Citibank. Here’s a rough look at general qualifications:
As always, your rate will depend on your business’s borrowing profile and how much you’re looking for. But you can generally expect rates for medium-term loans to fall between 7% and 30% for 1 to 5 years, and short-term loans to begin at 10% with a payback period of up to 18 months.
Apply for a Term Loan
You have lots of options for a business line of credit, too! Alternative lenders including the above—as well as OnDeck, Headway Capital, and more—provide fantastic options for borrowers who need fast options to cash quickly.
With interest rates ranging between about 7% and 25%, these small business lines of credit often have cheaper APR than many business credit cards and don’t have nearly the type of strict qualifications that a line of credit product from a large bank like Citibank would require.
Need to see for yourself? Here’s a general overview of qualifications:
Business line of credit:
Yes, really. You can start looking into offers from multiple lenders online.
Apply for a Line of Credit
For the business credit card route, there’s quite a Pandora’s box of options—and that’s an amazing thing if you’re a small business owner looking to maximize your returns. Not only can you zero in on a credit card that best serves your business’s needs, but you can build your business credit—and, hey, maybe even put yourself in a position to snag a Citibank small business loan down the road!
The Blue Business Plus Card from American Express is an amazing deal for new business owners—and that’s thanks to its 15-month introductory 0% APR period. That’s one of the longest we’ve ever seen. After your 15 interest-free months are up, a variable APR sets in at a rate depending on your creditworthiness. This rate will also vary with the market, so be sure to see the issuer’s terms and conditions for the latest APR information.
But this 0% introductory rate makes this card ideal for big purchases, especially if you know you’re going to carry a balance. After that, you’ll earn 2x points for every dollar you spend on your first $50,000 in purchases annually. Then, you’ll earn 1x point for every dollar you spend with the card. Plus, there’s no annual fee.
Simply, this is the most lucrative cash back rewards card on the market—and there’s no annual fee. The Chase Ink Business Cash Card offers a 12-month 0% intro APR period and a signing bonus, too, depending on your spending. After these 12 months, your APR will set in at a rate that will vary with the market prime rate, so be sure to see the issuer’s terms and conditions for the latest APR information.
Most notably, though, you’ll earn cash back at three rates—5%, 2%, and 1%, depending on the spending category—so if you’ll be investing in your business with both big and small purchases alike and know you’ll be able to pay off the big stuff within a year, this is an amazing business credit card.
If the main reason that Citibank’s small business loans aren’t available to you is because of your credit score, you might want to look into the best business credit cards for building credit. We love the Capital One Spark Classic for Business, which is available for business owners with credit scores of 550+.
Not only is this a no-annual-fee card, but there’s also a flat 1% cash back rewards rate on all purchases. With no cap to your earnings.
There are a lot of other great credit cards to look for—including the best business credit cards for travel and the no-fee best business credit cards, too. See what you qualify for!
Apply for a Business Credit Card
Your bottom line here? There are a lot of alternatives to the Citibank small business loan products if you don’t qualify—which, frankly, most small business owners won’t. If you find out you don’t quite have the credentials for a bank loan right now, alternative lenders are a fantastic place to look for the business financing you’re seeking.