Chase Business Loans: All You Need to Know
Chase business loans come in many different shapes and sizes: They offer financing in amounts ranging from $5,000 to $5.5 million with rates starting in the low single digits. And the Chase small business loan options vary way beyond your traditional bank loans—in fact, they offer 12 different small business loan options.
Small business loans from Chase Bank come in the following forms:
- Business lines of credit
- Commercial lines of credit
- Business term loans
- SBA 7(a) loans
- SBA Express loans
- SBA 504 loans
- Equipment term loans
- Equipment draw loans
- Equipment advised lines
- Commercial real estate loans
- Quick Capital Loans
- Business credit cards
With this ultimate guide to Chase business loans, we’ll dive into all of the details on these 12 options. We’ll also explain how to qualify and what the upsides and downsides are to this small business financing option:
Chase Business Loans: The Different Options
If you’re a small business owner in search of business loans, you’ve probably heard that banks just aren’t lending to small business owners. This is partly true. More than 80% of banks reported that they tightened their lending standards for small businesses after the recession. But, things are changing. Banks are now approving more than a quarter of loan applications from small business owners, a post-recession high, and the number is increasing.
Chase is one of the largest banks in the US and has an active small business lending program. They have more than 5,000 branches across the country, and they’ve even invested $150 million helping women, minority, and veteran-owned small businesses.
As one of the best banks for business loans, Chase might just be the place where you find your business loan. Here are the details on all of the Chase business loan options:
Chase Business Loans: Lines of Credit
Like any other business line of credit, a Chase business line of credit is a great option for business owners who need flexibility in their business financing.
With a line of credit, Chase approves you for a pool of funds starting at $10,000. You can draw on the capital whenever you want or need to for your business. You’ll pay Chase back over a monthly payment schedule, paying interest only on what you drew from your line.
A Chase business line of credit is revolving credit, so once you pay back what you’ve borrowed, your credit line resets to the original amount. Until you’ve fully repaid what you borrowed, Chase will automatically deduct monthly payments from your Chase business checking account.
- Business Line of Credit: Line of credit between $10,000 and $500,000. There’s a small annual fee ($150 to $500 depending on the line amount) and minimum monthly payments. This product is a lot like a credit card.
- Commercial Line of Credit: Larger line of credit for amounts over $500K. No annual fee and interest-only payments with a balloon payment after 12 to 24 months.
Chase Offers Two Types of Credit Lines
Chase offers two different types of revolving lines of credit:
The Business Line of Credit is probably the best choice for most business owners who want a line of credit to buy inventory, manage cash flow fluctuations, or cover emergency costs. The Chase Business Line of Credit comes at a variable interest rate (indexed to the Prime Rate) depending on your credit score and business financials.
The Commercial Line of Credit is great for businesses that have larger working capital needs or want to make bigger purchases. This product also has a variable interest rate (indexed to LIBOR), but no annual fee. Be careful with the repayment schedule on this line. You’ll make small, interest-only payments for the first year or two, but then will need to pay off the full balance at the end when the line expires. After that, you can choose to renew the line.
Using a Chase Line of Credit
A Chase line of credit is the ideal option for business owners who need flexible access to cash for just a short period of time. Whether your cash flow fluctuates or you need to purchase inventory for your small business, you can tap into your line of credit to use the funds however you’d like.
While most of the time you’ll be using your line of credit for business purposes, Chase also allows you to use your line of credit as overdraft protection. This means that when your line of credit is linked to your Chase Business Banking checking account, you can draw from your line of credit to make purchases even when you don’t have sufficient funds in your checking account to actually make the purchases.
Tapping into your Chase line of credit might be a different process for each borrower, but expect to write a check, use an access card, transfer funds via telephone, or go through Chase’s website to access your line of credit.
Cost of Chase Lines of Credit
Chase doesn’t publish exact interest rates on their website, but the annual percentage rate (APR) on their lines of credit varies in accordance with market interest rates. The Prime Rate and LIBOR are both popular interest rates that serve as a benchmark for loan products. Chase will quote your rate as a spread over the benchmark rate. For example, if your rate is Prime + 3%, that currently brings the rate to 8.25%.
If you think a line of credit is the right financing option for your business, another product to consider is a Wells Fargo business line of credit.
Chase Business Loans: Term Loans
Next up is Chase’s traditional business term loan. This is Chase’s central business loan product and is perfect for long-term business development and everyday expenses. Chase offers long-term loans ranging anywhere from $5,000 to $5 million.
Your term will depend on the amount you borrow and your business’s cash flow, but it could be as short as 1 year or as long as 7 years. To collect repayment, Chase will make monthly deductions from your Chase Business checking account.
Using a Chase Business Term Loan
Chase considers their term loan a perfect fit for business owners who need to “preserve working capital.” You can use funds from a term loan to make sure you have enough working capital to cover any emergencies, take advantage of business opportunities, or cover regular payments and costs your business always incurs.
You can also consolidate your business’s existing debt with a Chase business term loan—which is pretty unusual for a traditional term loan from a bank.
Cost of Chase Business Term Loans
The APR on Chase’s commercial term loans can be fixed or variable, depending on the borrower’s creditworthiness and the size of the loan. If variable, the rate will be indexed to Prime, LIBOR, or another market rate. But if you can lock in a fixed rate, that’s great because it means your rate won’t change for the life of the loan. You’ll have predictable monthly payments over the entire course of the loan.
Chase Business Loans: SBA Loans
Chase is a very active SBA lender, which is great news for small businesses. As of March 2018, the SBA ranked Chase as the 4th most active SBA lender in terms of dollar volume and number of loans. In addition, Chase is a Preferred SBA Lender, which means they can process SBA loans more quickly than the norm. This is a big deal, especially since SBA loans can take normally take several weeks, even months, to process.
Chase provides SBA loans through the SBA’s 7(a) Loan Program, Express Loan Program, and 504 Loan Program.
SBA 7(a) Loans from Chase
Chase provides SBA 7(a) loans for borrowers who need to expand their businesses, purchase another business, or simply manage cash flow. The 7(a) loan program is the SBA’s most popular and most versatile. You can use this loan for almost any business purpose.
Chase lends up to $5 million in 7(a) loan amounts. If you’re planning on using your 7(a) loan for working capital, the maximum term of 7 years. If you’re purchasing equipment with your 7(a) loan, your term can be up to 10 years. And for real estate, the term is up to 25 years.
When Chase issues you the loan, the SBA actually guarantees up to 75% of it. Chase is still the lender, but in case you default, the SBA is responsible for paying back the lender the guaranteed portion of the loan. This encourages Chase to lend to business owners who wouldn’t otherwise qualify for Chase small business loans.
And for interest rates, that’s up for negotiation between you and Chase. The rate might be fixed or variable, but don’t worry, the interest rate won’t be too high because the SBA sets a maximum cap on rates. The cap currently ranges between Prime + 2.25% to Prime + 4.75%.
SBA Express Loans from Chase
Chase also provides loans through the SBA Express loan program. An SBA Express loan is a great option for smaller businesses who don’t have time to wait for a regular 7(a) loan, and only need a small amount of capital—SBA Express products go up to $350,000.
The Express program is available for term loans and lines of credit. Chase also offers SBA Express Export Loans to qualified export businesses that want to expand or enter a new overseas market.
With an SBA Express loan or line of credit, the SBA, not Chase, determines your eligibility. They’ll notify you of their decision within just 36 hours of applying. Keep in mind, though, that the actual processing and funding of your loan can take 1 to 2 months.
Once the SBA approves your application, Chase tells you how much you’re approved for and sets the interest rate, subject to SBA maximums. The interest rates on these loans are a little higher than traditional 7(a) loans. The maximum rates are currently Prime + 4.5% to Prime + 6.5%
Faster approval means less time for the SBA and Chase to evaluate the risk of lending to you. In addition, the SBA only guarantees 50% of an Express loan. So, the bank might charge a steeper interest rate.
SBA 504 Loans from Chase
If you’re making a major real estate or equipment purchase for your small business, consider applying for an SBA 504 loan from Chase.
These loans start at $200,000, with no maximum amount. However, they must be used for big purchases—like land acquisitions, building acquisitions, and construction or equipment financing.
Chase works alongside of an SBA-approved Certified Development Company (CDC) to fund 504 loans. The CDC lends 40% of the loan amount, and the SBA lends 50% of the loan amount. The borrower brings a 10% down payment. Depending on what you’re buying, Chase could offer you a 504 loan at a 7 year term (for equipment) or at a 30 year term (for real estate).
The interest rates on the CDC and Chase parts of the loan will differ. The CDC portion currently has rates around 5%, and the Chase part of the loan should have a rate under 10%.
Chase Business Loans: Equipment Financing
If you need to purchase new equipment for your business, consider Chase’s equipment loan program. The SBA 504 loan program is also available for equipment financing, but SBA loans are very competitive. If you can’t qualify for one, then you might opt for Chase’s standard equipment loan program.
Chase offers three types of equipment financing: A term loan, a draw loan, and an advised line.
Each option lets you finance up to 100% of the cost of the equipment with no down payment necessary. Chase might also finance up to 10% of the “soft costs” on your equipment—like freight, training, installation, software, or sales taxes.
The interest rate you’ll get on these loans will depend on a few things: your banking relationship with Chase, your credit history, the equipment itself, and the term of the loan.
Chase Offers 3 Types of Equipment Financing
A Chase equipment term loan is just as you’d expect. You have a term as long as 7 years or up to 75% of the equipment’s estimated useful life. During the term, you make monthly payments plus interest. When the term is up and you’ve paid Chase back in full, you own that piece of equipment.
With a draw loan, Chase allows you to draw on your equipment loan anytime during a 12 month period. After that, you’ll repay what you borrowed to purchase your equipment by a fully amortizing repayment term.
And with the advised line, you have the option to make multiple equipment purchases for up to 12 months. You’ll then be able to lock in rates and terms for each piece of equipment at the time of purchase.
Cost of Chase Equipment Financing
The interest rate on each of these three types of equipment financing can be fixed or variable. You can expect the rates to be relatively low, possibly even lower than a business line of credit or term loan, because the equipment serves as collateral for the loan. If you default on the loan, Chase can simply seize and sell off the equipment.
Chase Business Loans: Commercial Real Estate Financing
Small business owners who want to finance the purchase, renovation, or construction of a piece of commercial real estate can get a Chase commercial real estate loan as a business construction loan. Funding is available for office buildings, retail, industrial, mixed-use, and multi-family investment properties.
It’s easiest to get commercial real estate financing through Chase if you already have a business relationship with them (e.g. maybe you already have a business line of credit). But even if you’re brand new to Chase, you should consider their real estate financing options for your large-scale projects.
Using Chase Commercial Real Estate Loans
Chase commercial real estate financing is available through regular commercial loans and SBA 504 loans, which we discussed earlier.
For 504 loans, Chase won’t be the only party you’re working with. Chase and an SBA-approved community lender (called a CDC) will both issue a part of your loan. The borrower has to offer 10% as a down payment. For SBA 504 loans, amounts start at around $200,000 and go up to $5.5 million.
On regular, non-SBA commercial real estate loans, Chase will offer up to 80% financing. You’ll have to pay a 20% down payment. The loan amounts start at $50,000 but go way up from there to $25 million plus, depending on the scope of your project.
To be eligible for a commercial real estate loan from Chase, you’ll need to submit two years of business history and show solid business profits.
Cost of Chase Commercial Real Estate Loans
Chase offers both fixed and adjustable interest rates on commercial real estate loans. In either case, your rate will change after 3, 5, or 7 years. For example, let’s say Chase offers you a 3-year fixed rate. After 3 years, Chase might adjust the term based on the current Prime rate.
The term on the commercial real estate loan will vary based on the type of loan. SBA 504 loans have 20 or 25 year terms. Regular loans might have a term of 5 or 10 years.
Bank rates on commercial real estate financing are usually quite low, starting around 5% to 6%, for both SBA loans and regular loans. And one major perk of these Chase small business loans is that you might qualify for an option that reduces the amount you pay on mortgage payments that you currently have on your business.
Chase Business Loans: Quick Capital Loan
The Business Quick Capital Loan is one of Chase’s latest offerings. No need to visit a Chase branch to apply for this loan—you can apply online and receive funding the very same day!
To make this possible, Chase teamed up with OnDeck Capital, an alternative lender that provides online loans for small businesses.
With the help of OnDeck’s technology, Chase can approve Quick Capital Loans as fast as other non-bank online lenders can. You can apply, receive approval, and receive funds entirely online, within just a few hours. But here’s the catch: not just anyone can apply.
Chase has about 4 million small business customers in their database. They prescreen the customers and invite the most eligible borrowers to apply for up to $200,000 in capital. These loans have 2-year terms and rates ranging from 9% to 25% APR.
So, you won’t really know whether or not a Quick Capital Loan is an option for you until Chase tells you so. But if you are tapped to apply for one, you should definitely consider it—you’ll get a fast business loan at a lower rate than most online lenders have to offer.
Chase Ink Business Preferred
The Chase Ink Business Preferred is a top option for business owners looking to maximize their travel rewards.
This card comes with one of the biggest sign-up card bonuses on the market—100,000 rewards points after you’ve spent $15,000 on the card in three months. That’s equal to $1,250 in free travel.
With the Ink business card, you’ll get 3 rewards points per dollar spent in 4 categories: travel (airfare, hotels, trains, etc.), shipping purchases, search engine and social media advertising purchases, and cable, phone, and Internet service purchases.
While this card is rewarding, it does come with an annual fee of $95.
Chase Ink Business Cash®
The Chase Ink Business Cash is a solid cash back credit card, offering up to 5% cash back in certain high spending business categories. There’s also a small sign on bonus as long as you meet the spending minimum within the first three months.
You’ll get 5% cash back for every dollar you spend at office supply stores and on cell phone, landline, internet, and cable TV each year, up to the first $25,000 you spend. Plus, you’ll get 2% cash back for every dollar you spend at gas stations and restaurants, up to $25,000 spent. Outside those rewards categories, you’ll earn 1% cash back for every dollar you spend on your business, with no limit on how much you can earn.
But the best part about this card is the 0% introductory APR for 12 months. If you charge items to your card but pay everything back within one year, you pay zero interest. That’s like getting an interest-free short-term loan. After your 12 interest-free months are up, your rate sets in at an APR depending on your creditworthiness. This APR also varies with the market, so check Chase’s terms and conditions for the latest APR information.
Another perk of this card—no annual fee.
If you don’t like either of these cards, Chase also offers credit cards with partner airlines and hotels.
Chase Business Loans: How to Qualify
Getting a bank loan for small business expenses is challenging, and Chase is no exception. You’ll have to prove that you’re a top-notch borrower to qualify for small business loans from Chase Bank. First off, you must have a business checking account set up with Chase before you can get approved for a Chase commercial loan.
Once you’ve done that, here’s a list of eligibility requirements for Chase business loans.
Personal and Business Credit History
The number one factor for any business loan application, but particularly for bank loans, is credit. Banks only work with the most creditworthy borrowers, and your 3-digit credit score tells them how well you’ve managed your finances in the past and how likely you are to make all your loan payments on time.
You should ideally have a personal credit score over 680 to help you qualify for Chase small business loans (although they don’t set an exact minimum). But equally important are other aspects of your credit history—your record should be free of bankruptcies, for instance.
Just like any traditional bank, this bank will consider your personal and business credit score closely before extending Chase commercial loans. If you don’t have a strong credit score to prove that you’ll repay your small business loan, Chase probably won’t work with you.
Business and Personal Finances
After credit, the other all-important matter: your business’s finances. This crucial because your business’s cash flow will support the loan. Chase will consider your bank balance, cash flow, revenues, and profit (if the business is profitable). To qualify, your business should have steady cash flow, and if you’re profitable, that’s another check in your favor.
Chase will look at your personal financial information if your business doesn’t have a substantial financial history to go by.
Time in Business
Chase will also want to know how long your business has been operating for. The longer you’ve been in business, the easier it will be to qualify for a business loan because you have a track record of weathering ups and downs. If you’ve been operating the business for at least two years, banks are more likely to lend to you. That said, you might still be eligible if you have a newer business, but as a trade off, you might need to have stronger credit or more assets to put up as collateral.
Chase Bank also considers your assets when deciding your eligibility for Chase business loans. Banks want valuable collateral that they can easily liquidate in case you default on your loan payments. Expect Chase to look at cash reserves, home equity, equipment, machinery, and vehicle ownership to understand the value of your assets.
Especially if you have a new business without a lot of history, putting up some collateral to secure the loan can really help you qualify.
If you’re applying for a small business loan from Chase Bank, be ready to show that you have a strong, well-thought out business plan. The bankers will want to see that you’ve thought in detail about your product or service idea, costs, and financial projections.
Remember, banks want to see optimistic yet realistic scenarios when it comes to the future of your business. This means that you can’t make assumptions, predictions, or promises to lenders that aren’t realistic and that you can’t back by data and research.
Keep in mind that you won’t be able to determine your eligibility for a Chase business loan online. In order to apply for any of the Chase small business loans, you’ll have to visit your local Chase branch and talk to a loan officer in person.
This is a major difference between working with a bank like Chase, and working with alternative, non-bank lenders. Non-bank lenders operate primarily online, and can fund your business loan much faster than a bank like Chase can. However, you’ll pay for that speed and convenience in the form of high interest rates.
Chase Small Business Loans: The Pros and Cons
There’s a lot of demand among small business owners for Chase small business financing, primarily because the loans have very reasonable interest rates. Plus, Chase has such a big brand name that their loan products are very popular. But, they are not right for all entrepreneurs.
Chase Small Business Loans: The Pros
First, let’s take a look at all of the upsides that Chase has to offer through their small business loans. Here are the advantages of Chase business loans for small businesses:
Low Chase business loan rates
Just like other bank loans, Chase business loans have low interest rates. You might be able to save a lot of money if you go through a bank like Chase, versus an online alternative lender.
Long repayment terms
Most Chase business loans have long terms, which means you have a long time to pay back the loan. This translates to lower monthly payments.
Large loan amounts
The other big advantage of Chase loans is that you get access to a lot of capital if you need it. The loans and lines of credit go well up into six, even seven figures, so they are great for bigger projects. On the flip side, though, getting smaller loans through a bank can be difficult.
Wide variety of loan options
A bank can be your go-to place for business financing because they offer anything you might need to grow your business… equipment financing, lines of credit, terms loans, you name it.
Chase Small Business Loans: The Cons
For all their advantages, though, Chase business loans will come with their own fair share of downsides. Keep the following imperfections in mind while you’re deciding whether or not Chase small business loans are the right fit for your needs:
Lengthy application process
Bank loans are notorious for requiring a lot of paperwork and having a long and complicated application process. Be prepared to submit a lot of documentation to Chase on your personal and business finances. A similar but much faster product to consider would be American Express small business loans.
Must apply in-branch
With the exception of Chase’s Business Quick Capital Loan, you have to apply in personal for the rest of Chase’s commercial loans. That adds time to an already lengthy application process.
Hard to qualify for
The hardest part about a bank loan is that qualifying can be challenging. You have to have great personal credit, and a history of solid business revenues. Depending on the type of loan, you might have to offer valuable collateral or a 10% to 20% down payment.
Frequently Asked Questions
The Bottom Line
Chase has some great financing options for your small business—but only if you can qualify for one. Chase’s business loans are still bank loans, of course, and bank loans are hard to secure.
If you’re worried about your eligibility for a Chase business loan, your best bet is to go the SBA-route. Chase offers a lot of funding for small businesses through the various SBA loan programs, and the SBA guarantee lowers the riskiness of the deal for them. In the end, you might be able to get the most financing at the lowest cost with an SBA-guaranteed Chase business loan.
And if Chase approves you for a Quick Capital loan, then you might be able to get cash really quickly, much quicker than the norm for bank loans. But as always, do your research on all your small business financing options. If Chase can offer you the financing you need at the lowest cost, it might just be the best solution for you!