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If you know just a little bit about the small business lending industry, then you probably know that your local bank isn’t the only player in the game these days.
That’s right—there’s a whole variety of alternative lenders that can now give you the funding your business needs to grow. In fact, there are so many different small business lenders out there that you might have written off bank loans all together. But before you cross all banks off your “potential lenders” list, here’s one you should take some time to consider: US Bank.
With $438 billion in assets, US Bank is big—there’s no doubt about it. But that doesn’t mean it can’t help your small business out when you need a business loan. For the right borrower, US Bank small business loans might be the perfect fit.
Are you that right borrower? Use this guide to find out.
So, you knock on the door of one of US Bank’s 3,122 branches.
What kind of small business financing do they have to offer?
The list of US Bank small business loans starts with the bank loans you’d expect to see: term loans and business lines of credit. But that’s not all that US Bank has to offer. US Bank also provides SBA loans, equipment financing, practice financing, and business credit cards.
Not all these US Bank small business loans will be a fit for every small business. So first off, let’s run through the qualification standards of US Bank small business loans.
If you have a business bank account with US Bank, congratulations—you’ve met their first requirement for US Bank small business loans!
It shouldn’t be a surprise that, to qualify for US Bank small business loans, your business needs to have a checking or savings account with the bank. They deduct your small business loan payments from your US Bank business banking account, after all.
But besides actually having a US Bank account, here are some other general eligibility standards for US Bank small business loans:
Like other small business lenders, US Bank will only fund borrowers that operate businesses in certain states.
US Bank has a pretty long list of states that they won’t lend in: Alabama, Alaska, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Hampshire, New Jersey, New York, New Mexico, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Virginia, and West Virginia.
Phew. It’s a long list, we know. And unfortunately, if you operate in one of those 26 states, US Bank small business loans aren’t an option for you.
Unlike most other banks, US Bank will consider lending to businesses that have been operating for less than a year.
US Bank offers a variety of “Quick Loans” that might be great options for relatively new, small businesses. You can qualify for Quick Loans as long as you’ve been in business for at least 6 months.
Otherwise, to qualify for the more traditional US Bank small business loans—like lines of credit or term loans—you’ll need to have been in business for at least 2 years.
If you apply for US Bank’s term loan, you’ll need to prove the financial strength of your business before you’re approved.
To qualify for one of these US Bank small business loans, you’ll need to prove your financial health with business financial statements and tax returns. This is par for the course as far as business loan applications go.
You should also know that, in order to secure one of the US Bank small business loans, each person owning 25% or more of your business will need to sign a personal guarantee.
What’s a personal guarantee?
Great question. Requiring a personal guarantee is a way that lenders protect themselves from the risk that you default on your loan. When you sign a personal guarantee, you’re agreeing to let the lender seize any or all of your personal assets to recoup their losses if you can’t pay them back. There are a few different types of personal guarantees, but know this: Personal guarantees put any personal asset that’s valuable right now—or in the future—on the line.
Because your ability to secure US Bank small business loans depends on your personal guarantee, US Bank will take a close look at your personal financials. US Bank will want to see if you actually have valuable assets that they can seize in the worst-case scenario. To prove this, any guarantor will need to show personal financial statements and personal tax returns.
The amount of financial documents you have to provide to qualify for one the US Bank small business loans depends on how much you actually ask for in funding. If you request $250,000 or less, you’ll just need to show your current business and personal financial statements and your most recent business and personal tax return. But if you ask for more than $250,000, you’ll need to submit 2 years of business and personal financial statements and 2 years of business and personal tax returns in your application.
US Bank will look closely at your personal and business credit rating before they approve you for one of the US Bank small business loans—no surprises here.
US Bank doesn’t set a hard standard for a minimum credit score you need to qualify. But as with most bank loan eligibility, the higher the score, the better. It’s important that US Bank is confident that you’ll pay them back before they actually deposit the money in your account. And as a measure of your reliability as a borrower, your credit score proves that you’re responsible with your finances—or gives evidence that US Bank shouldn’t lend to you.
Now that you know what it takes to qualify for US Bank small business loans, let’s go through the ins and outs of what US Bank has to offer.
A term loan is a type of small business loan that you’re probably familiar with already. It’s a lump sum loan that you pay back, plus interest, over a fixed repayment schedule.
Usually you’d think of a term loan as just one loan product. But US Bank has 4 different types of small business loans that fall under the umbrella of a “term loan.”
The first term loan that US Bank offers is their “Business Loan.” Pretty straightforward, huh.
A Business Loan from US Bank is just like the term loan you know and love. US Bank offers Business Loans in amounts as large as $2 million, and offers terms as long as 80 months.
These US Bank small business loans are what US Bank considers “major investments” in your business. They can be used for a variety of business purposes, but really should help you cover long-term financing needs and big purchases—like the expansion of a location or the purchase of equipment.
A Business Loan from US Bank comes with fixed interest rates. You’ll also have to put down some form of collateral—like business assets or equipment—to secure one of these US Bank small business loans.
You can also apply for a term loan from US Bank specifically for equipment financing. If you can’t afford the upfront cost of new or used equipment, US Bank can approve you for a term loan that helps you finance up to 100% of the cost of your equipment. There’s no limit to how many pieces of equipment you can finance, either. You just need to prove that all the equipment you’re financing generates revenue for your business.
In some cases, US Bank goes beyond financing 100% of the upfront cost of your equipment. They’ll also finance up to 25% of soft costs—like sales tax, shipping, software, training, maintenance, and installation.
US Bank can approve you for anywhere between $10,000 and $500,000 to meet your equipment financing needs. They also have some flexibility with how you pay them back. You can choose a seasonal, monthly, quarterly, semi-annual or annual repayment structure. This flexibility is pretty unusual, as far as bank loans go.
Another great feature of these US Bank small business loans? If you’re only applying for equipment financing of $150,000 and less, the application is only one page, and you can get a credit decision within hours.
With their Quick Loan for Business, US Bank is essentially taking a stab at providing small businesses short-term loans. A Quick Loan for Business is a good option for business owners who need financing—right now.
Quick Loans for Business range from $5,000 to $250,000, and can finance any general business need. You’ll have a Quick Loan for up to six years, paying US Bank back with fixed monthly payments.
Quick Loans come at competitive interest rates when compared to other short-term lenders, but know that they need to be secured by purchased assets, general business assets, or a US Bank certificate of deposit (CD).
As a variation on the Quick Loan for Business, US Bank offers a Quick Loan for Vehicles. With the same speed as a Quick Loan for Business, Quick Loans for Vehicles can be great options for business owners who need fast access to funds to purchase vehicles for their business.
Quick Loans for Vehicles also come up with amounts up to $250,000, but the longest term available is 5 years. Other than that, Quick Loans for Vehicles are no different than their Business Loan counterpart.
Next up on the list of US Bank small business loans? Their business lines of credit.
US Bank offers 3 different types of lines of credit, but they all operate just as you’d expect. You’re given access to a pool of funds that you can tap into whenever you need or want to for your business. You’ll repay US Bank what you drew, plus interest, over time.
Lines of credit are great financing products for business owners who want to stabilize their cash flow and need help covering regular business expenses as they come up. US Bank’s lines of credit are tailored to short-term cash needs, working capital, accounts receivables, and purchasing inventory.
US Bank’s 3 lines of credit are the Cash Flow Manager Line of Credit, the Business Equity Line of Credit, and the Business Line of Credit.
Here’s how they break down.
With lines up to $250,000, the Cash Flow Manager Line of Credit might be the most suitable option for a small business.
The Cash Flow Manager Line of Credit is well-suited for borrowers who need quick access to short-term financing to cover any kind of business need—operating expenses, inventory purchases, or growth opportunities.
The rate on the Cash Flow Manager Line of Credit is variable, but US Bank will approve a fixed interest rate in some cases. You don’t have to do the heavy lifting to repay what you draw from your credit line. US Bank takes minimum payments directly from your US Bank checking account. And once they’ve collected in full, your credit line replenishes to its original amount.
The Cash Flow Manager Line of Credit can either be secured or unsecured—making it a great option for business owners who don’t have any collateral to offer up for financing. If you do choose to go the unsecured-route, you’ll probably just have a higher interest rate on the Cash Flow Manager Line of Credit.
With the Business Equity Line of Credit, borrowers leverage the equity of their commercial real estate for line of credit financing.
If approved, you can borrow up to $500,000 against the value of your commercial real estate. US Bank will only approve borrowers for a maximum five year term, and during that term they’ll have a first or second position lien of up to 75% of your property’s value.
When you look closely at the product, the Business Equity Line of Credit is really only a match for more established small businesses. Not only do you have to own commercial real estate that US Bank considers valuable, you also have to prove that you bring in more than $1 or $2 million in sales each year. And on top of that, you have to have been in business for more than two years to qualify.
For small businesses that need a really large line of credit, US Bank’s Business Line of Credit might be a good fit.
Borrowers can be approved for a Business Line of Credit as little as $100,000 and as large as $2 million. If you choose to apply for a Business Line of Credit, you should know that you’ll have to secure the credit line by receivables or inventory. And because it’s a secured line of credit, you’ll have a higher credit limit and a lower interest rate.
As you can probably imagine, a Business Line of Credit is harder to qualify for. You’ll need to have a very strong credit rating and have been in business for more than two years.
Out of all the US Bank small business loans, their SBA lending program is probably the best bet for small business owners.
As the 3rd most active SBA lender, US Bank has some experience funding SBA loans. In 2016, they funded over $800 million in SBA-guaranteed loans for small businesses. So if you can score an SBA loan from US Bank, you can be confident that they know what they’re doing.
But let’s take a step back—what’s an SBA-guaranteed loan?
An “SBA loan” is somewhat of a misnomer. The Small Business Administration doesn’t provide the funds for an SBA loan itself. Instead the government institution guarantees loans funded by other lenders. And by guaranteeing a portion of the loan, the SBA encourages lenders to approve small business owners that they wouldn’t otherwise work with. In the end, both the lender and the borrower wins—the lender’s risk of borrowing is lower, and the borrower gets access to lower-cost, longer-term financing than they’d otherwise qualify for.
The SBA has a few different lending programs. The three types of SBA loans that you’ll find with US Bank are SBA Express Loans, 7(a) Loans, and CDC/504 Loans.
Let’s run through the ins and outs of them all.
The SBA’s 7(a) Loan Program is a great catch-all financing product for small business owners. 7(a) loans can be used for almost any business purpose.
US Bank considers 7(a) loans a good fit for borrowers who have “smaller” financing needs—but you can still be approved for up to $5 million in capital. The term that you’ll have on a 7(a) loan from US Bank will depend on what you’re using the funds for. If you need a 7(a) loan for business acquisition, equipment purchases, debt refinancing, or real estate improvements, US Bank will most likely set a term of 10 years on your loan. If you just need a 7(a) loan for working capital, US Bank will usually give you a 7 year term.
Whereas the 7(a) Loan Program is pretty general, a CDC/504 loan is a much more specific financing product.
With a CDC/504 loan from US Bank, borrowers can only use the funds for major fixed assets purchases. These loans help you finance the steep price tags that come on equipment or real estate.
If you do need to finance a major asset purchase for your business, a CDC/504 loan could be a good fit—US Bank can approve you for a 504 loan up to $11.25 million at a 10 to 25 year term.
If you’re a small business owner looking for the speed and ease of an online loan, but the affordability of an SBA loan, then the SBA Express Loan Program could be your best bet.
Most SBA loans have the same funding time as a traditional bank—meaning they take a long time to fund. But with the SBA Express program, you can get a response within 36 hours of sending in your application. Not only does the SBA expedite the approval process, they also require less documentation for the actual application.
An SBA Express loan is also a great option for borrowers that need a smaller amount in financing. At a maximum, US Bank will lend $350,000 for a SBA Express loan.
The list of US Bank small business loans isn’t much different than what you’d find at any other bank. But by offering “practice financing,” US Bank stands out from the rest. US Bank is considered the “premier lender to health care practitioners.”
Businesses in the healthcare industry might have a hard time securing financing. But US Bank has a whole lending program tailored just to dentists, veterinarians, and eye doctors.
So if you need to acquire another practice, refinance a practice, expand or relocate, or just start a practice, US Bank can provide a customized financing option for you. US Bank doesn’t outline the specific details about their practice financing options—but that’s because each financing solution is tailored to the practice you run and your funding needs.
In general, though, US Bank offers practice financing with terms up to 10 years for any of the following financing needs: acquisition or buy-in, refinancing a practice, expanding or relocating, starting a practice, and equipment financing. With any of those practice needs, US Bank will provide up to 100% of the financing required.
There’s a whole lot more to learn about US Bank’s practice financing program, and the best way to do so is to visit your local US Bank to talk to one of their practice financing specialists. Or, check out their practice financing FAQs to learn more.
Now, you might not put business credit cards on the list of US Bank small business loans.
But financing your business with one of US Bank’s business credit cards might just be one of the smartest financing decisions for your business—especially if you’re a relatively new small business owner.
US Bank has 7 different business credit cards available, so you’re bound to find a card that meets your credit card criteria—whether you care about travel rewards, cash back, bonus rewards, or no annual fee.
And why should you consider using a US Bank business credit card as a loan?
Well, we are talking about US Bank small business loans, but your definition of “small” might not be the same as US Bank’s definition. Chances are, if you are a small business owner that’s just starting up—with no business experience or credit history under your belt—you’ll have a hard time qualifying for a term loan or line of credit from US Bank.
And on top of that, you might only need a little bit of capital to get your business going. You might notice that these “small” business loans are actually pretty big—around $250,000 and up. So if you need only $5,000 or $10,000 in financing for your business, using a business credit card could be a better fit.
Now that you have all the US Bank small business loans laid out in front of you, do any of them seem like a fit?
If you’re a more established small business owner—with a significant time in business, a stellar credit score, and strong revenues—US Bank’s term loans, lines of credit, or equipment financing could be a good match.
And if you’re a relatively new small business that’s only 6 months in, one of US Bank’s Quick Loan for Business could be a good fit, too.
But to qualify for any of the US Bank’s small business loans, remember: you’ll need to have a great credit score and strong business financials—not to mention operate in one of the 24 U.S. states that the bank does lend in.
So, do you qualify? The only way to find out is to stop by one of US Bank’s local branches and see!