Considering Funding With TIAA Commercial Finance? Read This First
The sources of commercial financing and banking are many—even with just a quick search of business finance online, you’ll have hundreds of options at your fingertips.
One of the many names you might have come across in your search for small business loans is TIAA, formerly EverBank, Commercial Finance. And if you’re looking to learn more about this option, you’ve come to the right place.
Here’s all you need to know about TIAA Commercial Finance to decide if it’s the right fit for your business’s financial needs.
The Rundown on TIAA Commercial Finance
Before becoming a subsidiary of EverBank Financial, Corp.—one of the country’s largest privately-held financial services companies—in 2010,
Everbank Commercial Finance was known as Tygris Commercial Finance. It was then merged into TIAA bank in June of 2018.
Functioning as the commercial financing and leasing arm of TIAA, TIAA Commercial Finance offers business financing options to businesses across the world.
Additionally, TIAA at large offers business banking options that function efficiently in tandem with EverBank Commercial Financing options.
Let’s take a look at what their offerings can do for you.
TIAA Commercial Finance Business Funding Options
First off, let’s take a look at what kind of business loans that specifically TIAA Commercial Funding offers. We’ll delineate each funding type and all the logistics they come with.
Let’s take a look at all they have to offer when it comes to business financing.
Commercial Real Estate
To start, TIAA Commercial Finance offers commercial real estate loans for those looking to acquire single tenant, multi tenant, and multi family properties.
Based on which of these 3 types of properties you’re hoping to invest in, the loan terms will have different ranges of size, term length, LTV ratio, and applicable real estate types.
Generally speaking, though, TIAA Commercial Finance’s commercial real estate loans can range from $2 million to $50 million with terms up to 15 years long and LTV ratios of up to 80% depending on the unit.
Additionally, depending on the property type you choose to invest in, you’ll be able to acquire an office, warehouse, light industrial & flex, retail, light manufacturing, or medical office.
Working Capital Management
A broader funding option that TIAA Commercial Finance offers is their working capital management options. Here are the details on the 3 types of asset-based loans they offer:
Revolving lines of credit are a great way for your company to secure revolving credit with lower APR’s than credit cards. Let’s see what TIAA Commercial Finance’s revolving lines of credit have to offer: Term lengths ranging from 3 to 5 years, advance rates of up to 85% of your business’s accounts receivable, and up to 65% of eligible inventory.
Term loans that TIAA Commercial Finance offers are only available in conjunction with their revolving lines of credit. This option offers up the following features: Term lengths of up to 7 years for machinery and equipment collateral, up to 15 years for real estate collateral. The advances are up to 85% of net orderly liquidation values of your machinery and equipment collateral, and up to 60% of the fair market value of your real estate collateral.
Stretch Cash Flow term loans are the final asset-based loan option that TIAA Commercial Finance offers. Let’s take a look at the details on this working capital option: Available with adequate cash flow, repayment terms of up to 3 years, with values of up to 20% of your company’s worth.
Be sure to keep in mind that these asset-based loans come with a minimum transaction size of $5 million, so these funding options are not for the faint of heart.
Capital Equipment Financing
Next up, TIAA Commercial Finance also offers capital equipment financing to businesses. They offer various structures and types of equipment financing, which include:
- Equipment loans
- Tax leases
- Finance/synthetic leases
- TRAC leases
- Early buyouts, fixed purchase price options & early termination options
- Rate locks, fixed & floating rates
- 100% financing
With these equipment loans, TIAA Commercial Finance offers financing to business with a minimum size of $3 million and with terms up to 15 years long.
Specialty & Lender Finance
TIAA Commercial Finance offers specialty and lender finance to specialty finance companies around the world and to middle market lenders across the country.
For this funding type, transactions will range from $30 million to $100 million and will come with repayment terms of up to 5 years in length.
Finally, TIAA Commercial Finance offers vendor equipment financing for equipment vendors across multiple industries.
TIAA Commercial Finance covers a wide variety of specialty equipment—from healthcare equipment to office technology—for vendors with loans sizes of up to $20 million.
Through this program, TIAA Commercial Finance offers bundled packages, vendor and industry specific programs, and a streamlined credit process.
TIAA Business Banking Options
Next up, TIAA Commercial Finance offers a variety of business banking options, all with differing APY (annual percentage yields, or the amount of interest your balance will accumulate) and differing structures.
Let’s take a look at the details.
Business Money Market
This is an interest bearing account that comes with a monthly 6 transactions along with online banking. Depending on your account balance, this account type will come with an APY of 0.40% to 0.91%.
Business Interest Checking
Another interest bearing option, the Business Interest Checking account comes with a medium transaction volume and online banking.
Again, your APY for this account will depend on your balance, but it could range anywhere from 0.40% to 0.91%.
Next up, the Business Checking account is a non-interest bearing option for business owners looking to keep their finance liquid.
This option comes with a high transaction volume, earnings credit, and online banking.
The next business banking account that TIAA offers is the Business Checking account. This is a non-interest bearing with a low monthly transaction volume and online banking.
The non-profit checking option from TIAA is an interest-bearing account that comes with a medium monthly transaction volume.
Depending on your balance, your account’s APY could range from 0.20% to 0.61%.
TIAA’s final option for business banking accounts is their business certificates of deposit.
These are great savings options for business owners who are looking to earn optimal APY’s but aren’t worried about keeping their business’s finances liquid.
Depending on your CD’s term length, its APY could range from 1.90% to 3.10%. However, you won’t be able to access your deposit’s worth until this predetermined term has completed.
The Advantages and Disadvantages of Working with TIAA Commercial Finance
The Advantages of Working with TIAA Commercial Finance
With all of the details covered, it’s time to take a step back to look at the big picture.
What do these details mean exactly? And, even more, what do they mean for your business?
Some of the logistics of working with TIAA and TIAA Commercial Finance are pros and others are cons. Let’s first take a look at the pros that are hidden in all the details.
First and foremost, TIAA and its subsidiary TIAA Commercial Finance provide a very hands-on approach to the businesses that work with them.
For many of their funding offerings, there are funding experts on hand to help structure a flexible financial solution that’s tailored for your business.
From asset-based lending to commercial real estate, TIAA Commercial Finance’s funding option categories all come with subcategories that can be even more specific to the type of financing you’re hoping to secure for your business. And if you’re not sure how to sift through all of these options, there will always be a real-live human there to help you choose from them.
Breadth of Offerings
Though TIAA’s funding options can cater to very specific financial needs, TIAA still offers an exceptionally wide breadth of financial services.
From equipment financing to commercial real estate loans to business checking accounts, provides pretty much every type of financial service your business could be wanting for.
The Disadvantages of Working with TIAA Commercial Finance
All that said, TIAA and TIAA Commercial Finance come with some pretty substantial disadvantages, as well.
And all of them fold into one, wide-reaching downside to this funding choice.
Let’s break it down.
Not Ideal for Small Businesses
Quite simply, most all of TIAA Commercial Finance’s products are just too big for many small businesses.
What do we mean by “big” exactly?
Well, if you take a look at the sizes of the loans they fund, you’ll see that TIAA Commercial Finance and TIAA deal with finances by the million.
Normally we look at high funding amounts as a pro for small business looking to finance their businesses. However, in this case, these financial services come with minimum transaction sizes that are just too high to be helpful for small businesses.
The two most small business friendly funding options they offer—capital equipment financing and asset-based lending—come with a minimum transaction size of a whopping $3 million and $5 million respectively.
At the end of the day, despite the upsides that they can offer, if your small business doesn’t need big-scale funding to the tune of a few million dollars, then TIAA Commercial Finance probably won’t be able to help you.
If you’re not dealing with your business’s finances in the millions, then look for a more small business friendly lender that is willing to fund in smaller amounts.
The Alternatives to Working with Everbank
So, your business isn’t quite in the market for taking on millions of dollars of debt. As such, you’ve ruled out TIAA Commercial Finance as a possible lender. Maybe you just want to find a more small-scale loan for your business, or perhaps you want a bank account with a bank with a more small business friendly disposition.
Let’s run through some of the best alternatives for the services and products that TIAA and TIAA Commercial Finance offer.
Often referred to as secured loans asset-based loans are a great option for small business owners, especially when they don’t come with astronomical transaction minimums like those that TIAA Commercial Finance offers do.
These loans are really just any loan that takes a personal guarantee or collateral. If you’re able to secure a loan with a personal guarantee or collateral, then the lender will be taking on less risk by lending to you. As such, you’ll be able to access better, more affordable terms.
Not to mention, there’s a host of lenders that lend secured loans to businesses at much lower amounts than the TIAA Commercial Finance minimums.
For instance, SmartBiz is one of the best lenders offering secured SBA loans to small business owners. It funds SBA loans that range from $30,000 to $350,000 and come with a standard repayment term of 10 whole years. Not to mention, because this type of secured loan is partially guaranteed by the SBA, APR’s can dip as low as 6.25%.
Additionally, DealStruck offers traditional term loans that range from $50,000 to $500,000. Their repayment terms can range from 6 months to 3 years in length, and their APR’s can reach as low as 9.99%.
Finally, Kabbage is one of the top lenders offering secured business lines of credit to small business owners. Their business lines of credit can be anywhere from $2,000 to $150,000 with terms from 6 to 12 months and rates ranging from 1.5% to 10% of your remaining loan amount. When you take on a business line of credit from Kabbage, this funding will be secured by a blanket UCC line that Kabbage will file against your business.
Next up, it’s time to consider some small business friendly alternatives to TIAA Commercial Finance for securing the equipment your business needs.
Let’s do a quick rundown on your options for securing small-scale equipment financing that TIAA Commercial Finance doesn’t provide.
First off, don’t be fooled by the terminology—equipment financing is just another form of secured loan. The equipment that you buy with the loan will act as collateral. Equipment financing is often referred to as a “self-secured loan,” because the collateral is built into the loan’s purpose.
One of the best equipment financing lenders out there, Direct Capital, offers equipment financing anywhere from $10,000 to $150,000 with repayment terms from 6 to 18 months and loan rates as low as 17.90%.
Additionally, Funding Circle is a lender that offers term loans that can function as equipment financing. These term loans can range from $25,000 to $500,000 with repayment terms ranging from 1 to 5 years and loan rates as low as 5.49%.
If you’re looking for financing for buying some smaller-scale equipment for your business, then Direct Capital or Funding Circle are probably better fits for your business’s needs.
Bank Alternatives to TIAA
Finding the right home for your business’s finances is a crucial step, and you’ll probably want to find a home base that’s more small business minded than TIAA.
Here are two of the top business banking alternatives to TIAA for your small business’s finances.
Chase Business Checking Accounts
To start, Chase business checking accounts are all great options for smaller businesses that are looking for a safe way to keep their finances liquid.
The three Chase business checking account options—Chase Business Complete Checking, Chase Performance Business Checking, and Chase Platinum Business Checking—all come with varying service fees, transaction caps, and cash deposit limits.
While the Business Complete Checking account—with lower caps and fees—is a great option for growing businesses, Performance Business Checking is a better fit for mid-sized businesses, and Platinum Business Checking works best for bigger, higher volume businesses.
Capital One Savings Accounts
If you’re hoping to keep you business’s savings in a place where they’ll grow over time, look to Capital One’s business savings options.
For starters, you can opt for a slightly more accessible savings with the Capital One Business Savings Advantage. This business savings options up to 6 free withdrawals over your account’s life along with a mere $250 minimum opening deposit. You’ll also be able to waive the account’s monthly service fee of $3 with a $300 minimum balance.
Another small business friendly savings option that Capital One offers is their Certificates of Deposit. Just like the Certificates of Deposit that EverBank offers, these are non-liquid, low-risk savings options that accumulate interest at a higher APY than your average savings account. Not to mention, you won’t be able to access your deposit’s value until your term has completed.
That said, as they start at a minimum of a $1,000 deposit, Capital One’s certificates of deposit come at a more hospitable scale for small businesses.
Frequently Asked Questions
The Bottom Line
So, with all that information in your tool belt, what’s your next step?
Well, that’s for you to decide on your own. When it comes to funding your business, knowledge is power. Now that you’ve got all of the knowledge, you’ve got the power.
The way we see it, though TIAA Commercial Finance and TIAA at large might be a viable option for businesses that are operating on a larger scale than your average small business, it’s not quite a feasible choice for most small businesses out there.
With minimum transaction sizes in the millions and optimal savings rates at high account balances, TIAA does big business finances far better than it does small business finances.