TD Bank Business Loans: All You Need to Know
Learn about TD Bank business loans and all their top alternatives.
TD Bank business loans might be the first place you go for small business funding. This is a logical first step. You go to them for all other things finance—what’s to stop you from seeking a small business loan?
However, no matter how logical a choice it might seem, it’s always crucial to read up on a source of business funding before you apply for it. And you’re in the exact right place to do that.
TD Bank offers five types of small business loans:
- Term loans
- Lines of credit
- Commercial mortgages
- SBA 7(a) loans
- SBA CDC/504 loans
Here’s your ultimate guide to TD Bank business loans and their top competitors. Let’s see the details on how TD Bank small business loans stack up:
What Can TD Bank Business Loans Offer Your Business?
As you likely already know, TD Bank is a big national bank with locations all around the country. You’ve probably encountered one of their branches or ATM’s, even if just passing one by.
Though they’re one of the biggest banks in the nation, that’s not to say they don’t aim to help small businesses. They offer business loans to small businesses all around the country. In fact, they’re one of the top SBA lenders and one of the best banks for small business loans overall.
Let’s take a look at all of the details on what kind of TD Bank small business loans are available:
TD Bank Small Business Loans
The first of the two categories that TD Bank splits their small business funding into is “small business loans.” Within this category, you’ll find TD Bank’s small business term loans, lines of credit, and commercial mortgages.
Let’s take a look at all of the information available on these types of TD Bank business loans.
Term Loans
First up is TD Bank’s term loans. These are the most traditional of their small business loan offers. With a TD Bank term loan—or pretty much any term loan, for that matter—your business will get a lump sum of capital that you’ll pay off, plus interest, over a predetermined repayment term.
This is a one-off source of capital that you can use to for expenses like:
- Purchasing equipment or machinery
- Financing expansion or renovation
- Easing operational costs, or working capital
If you end up qualifying for a TB Bank term loan, then you’ll gain access to the following terms:
- Loan amounts ranging from $10,000 to $1,000,000
- Fixed interest rates
- Repayment terms of 3 to 5 years
Additionally, it’s worth noting that TD Bank term loans will typically require you to offer up collateral to secure your debt—so whether it be equipment, inventory, or cash, you’ll need to make sure you have the assets to secure what you borrow.
Business Lines of Credit
The next TD Bank small business loan is their business line of credit.
A line of credit is form of funding that functions a lot like a non-physical credit card. A lender will extend your business a revolving credit limit from which you’ll be able to withdraw funds as needed. Then, you’ll simply pay back the amount you withdrew over a predetermined repayment term.
The best part about business lines of credit?
You’ll only have to repay what you end up spending. So you can keep this funding option in your small business’s back pocket as an on-demand funding source for your future.
You’ll be able to use a TD Bank line of credit for expenses like:
- Paying rent
- Stocking inventory
- Making payroll
- Financing daily operations, or working capital
Does this TD Bank business loan sound like just what you need? Great!
If you end up funding with a TD Bank line of credit, you’ll get access to the following terms:
- Credit limits from $25,000 to $500,000
- Variable interest rates
Before you apply, be sure to note that the TD bank line of credit will also require a form of collateral to secure it, which is typically either cash or accounts receivable.
Commercial Mortgages
Their final form of funding in their small business loan category are commercial mortgages. You’ll be able to use these TD Bank business loans for both purchasing real estate for you business and for refinancing pre-existing commercial mortgages.
Through TD Bank commercial mortgages, you’ll be able to access the following terms:
- Mortgages of up to $1,000,000
- Fixed interest rates
- 5-year repayment terms
- Amortization schedules of up to 20 years
Be sure to note that the TD Bank small business loans will be secured by the real estate you use their proceeds to purchase or refinance. So, basically, these loans will be self-secured by the collateral they buy.
TD Bank SBA Loans
Next up, TD Bank sets their SBA loans aside into a category of their own. And though they are still TD Bank small business loans, and they’d fit well into the other category as a result, they function a little differently from your average small business loan.
You see, SBA loans, in practice, work a lot like a traditional term loan. They’re a lump sum of capital that you’ll pay back, plus interest, over a predetermined term with monthly payments.
However, because SBA loans are partially-guaranteed by a government entity called the Small Business Administration, or the SBA for short, lenders take on less risk by lending to you through an SBA loan than they would by lending to you through a non-SBA loan.
As such, you’ll be able to access much more ideal terms through an SBA loan—think higher loan amounts, longer repayment terms, and lower interest rate. That said, because SBA loans involve a third-party guarantor—and one that’s a government entity, no less—they’ll be one of the most difficult types of small business loans to qualify for.
That’s the general idea on SBA loans as a whole, but let’s take a look at the details on the SBA loans that TD Bank offers.
SBA 7(a) Loans
The SBA’s primary program that it lends through is their SBA 7(a) program. Odds are, if you secure an SBA loan, it will be through the 7(a) loan program, and TD Bank participates as a preferred lender in the 7(a) program.
Through TD Bank’s SBA 7(a) loans, you’ll be able to access loans with proceeds that can be used towards the following expense:
- Real estate purchase
- Real Estate refinance
- Expansion
- Acquisition
- Partner buy-out
- Equipment purchase
- Franchise financing
With TD Bank SBA 7(a) loans, you’ll be able to access terms that are regulated by the SBA, that will look like:
- A 10% down payment from the borrower
- Up to $5,000,000 in loan amount
- Repayment term lengths of up to 25 years
SBA 504 Loans
Another, less primary, program that the SBA lends through is the SBA CDC/504 Loan Program.
This program lends to small business who need funds specifically to acquire large-scale assets—think real estate and big-ticket pieces of equipment. TD Bank’s SBA 504 loans are typically put towards the following business expenses:
- Real estate purchase
- Construction
- Equipment purchase
- Refinancing
With this loan program, you’ll be able to access the following terms through TD Bank:
- No maximum loan amount if it’s your 1st mortgage
- A maximum of $5 million to $5.5 million—depending on industry—if it’s your 2nd mortgage
- A 10% down payment from the borrower
- Repayment term lengths of up to 20 years
TD Bank Business Loans: The Main Downsides
Now that you’ve taken a look at all the TD Bank business loans have to offer, you’re probably asking yourself, “What’s not to love?”
Well, as much as we hate to be the bearer of bad news, we also need to make your expectations realistic—by nature of coming from a bank, TD Bank business loans will come with 2 major downsides that will make it pretty difficult to get your hands on them.
Let’s take a look.
Hard to Qualify For
First and foremost, small business loans are notoriously difficult to qualify for. Since the financial crisis, banks have seriously tightened their belts when it comes to lending to small businesses.
As such, only the most qualified small businesses will be able to reap the benefits of TD Bank business loans. You’ll need a stellar personal credit score, a good bit of business history under your belt, and solid annual revenue in order to access the ideal terms that TD Bank business loans offer up.
Delayed Funding
Additionally, because TD Bank will be particularly careful about which small businesses they lend to, their underwriting process will be particularly rigid.
What does that mean for you, exactly?
Well, it means that, even if you do end up qualifying for a TD Bank small business loan, you’ll have to wait a good bit—sometimes months—until you can get your hands on the loan proceeds.
If you need quick funding, then we suggest looking for other, non-bank sources of small business funding.
TD Bank Small Business Loans: Top Alternatives
As always, a bank loan will offer the best rates and terms to qualified business owners. TD Bank is a great option, but be sure to check out your options at other banks. US Bank small business loans, BB&T business loans, Discover business loans, and American Express small business loans are some top alternatives to check out.
But are you not the most qualified of small business owners? Are you in need of quick funding?
Or, are you both?
Not to worry—you’ve got plenty of funding options that can offer terms that can compete with TD Bank business loans, and can offer accessible, quick funding.
Let’s take a look at the top 3 lenders that you should look to if TD Bank business loans aren’t quick or accessible enough for you.
Funding Circle
First up on our list of the top alternatives to TD Bank business loans is the peer-to-peer lender Funding Circle.
They offer a traditional term loan that mirrors the terms of typical small business bank loans, but is much more accessible and funds much more quickly. To start, Funding Circle Term loans come with the following ranges of terms:
- Loan amounts ranging from $25,000 all the way up to $500,000
- Repayment term lengths from 6 months to 5 years
- Loan rates ranging from 4.99% to 27.79%
Sound like just what your business needs?
Your next step is to ensure that you and your business are eligible to borrow with Funding Circle. There minimum requirements for borrowers are the following criteria:
- A personal credit score of at least 660
- At least 24 months in business
- At least $150,000 in annual revenue
If that sounds like your business, then you’ll just need to get your paperwork together before you apply for a term loan through Funding Circle.
Make sure you gather these documents so that the application process can move as quickly as possible:
- 6 months business bank statements
- Most recent personal tax return
- 2 most recent business tax returns
- Your balance sheet for the past year (unless you submit your business tax returns)
- Your profit & loss statement for the past year (unless you submit your business tax returns)
- Business debt schedule
If you get all of that prep work out of the way before applying, you’ll be able to get funded with Funding Circle in as little as 5 days.
Lending Club
The second lender we suggest you check out if TD Bank business loans aren’t the right fit for your business is Lending Club.
This alternative lender also offers a term loan that offers terms that can seriously compete with those of more traditional funding sources, all while funding you more quickly and offering more accessible funding.
If you decide to fund with Lending Club’s term loan, you’ll gain access to these ranges of terms:
- Loan amounts ranging from $5,000 to $300,000
- Repayment term lengths as short as 12 months and as long as 5 years
- Interest rates that will range from 5.9% to 25.9%
If these terms sound like exactly what your business needs, then you’ll need to ensure you and your business are eligible to borrow from them.
Do you check off the following 3 minimum requirements?
- A personal credit score of at least 620
- At least 2 years in business
- At least $75,000 in annual revenue
If you do, you’ll just need to get your paperwork together before you apply for funding from Funding Circle. You’ll just need to following documents for your application:
- 3 months business bank statements
- Your most recent business tax return
And that’s it! If you can move quickly through the application process, then Funding Circle can fund you in as little as a single business day.
SmartBiz
Finally, for an easier-access, quicker-funding alternative source of SBA loans, look to SmartBiz.
SmartBiz is a marketplace for SBA lenders that helps small businesses find their very best SBA loan provider. Plus, it will help both the lender and the borrower through the application and underwriting process, which can seriously speed up your time-to-funding.
SmartBiz lenders will typically fund SBA loans with the following ranges of terms:
- Loan amounts from $30,000 to $350,000
- Repayment term lengths that are typically 10 years
- Loan rates from 6.25% to 7.25%
Just like any other source of funding—especially SBA lender, you’ll still need to make sure you’re eligible before you apply for funding from SmartBiz. They have the following minimum requirements:
- A personal credit score of at least 600
- At least 24 months in business
- At least $100,000 in annual revenue
If you meet these minimum qualifications, then you’ll need to brace yourself for the SmartBiz application by getting all of your paperwork ready beforehand. You’ll need the following stack of documents to apply for an SBA loan through SmartBiz:
- 3 most recent personal tax returns
- 3 most recent business tax returns
- Your balance sheet for the past year
- Your profit & loss statement for the past year
- Articles of Organization
- Operating Agreement/By-laws
- Business license
- Insurance – General Liability
- Insurance – Business Personal Property
- Lease Agreement (if applicable)
- Landlord Subordination Agreement (if applicable)
- Certificate of Good Standing
- Voided business check
- Copy of your driver’s license
If you have all of your paperwork ready, and you’re able to move quickly through the application process, then SmartBiz can fund your business with an SBA loan in as little as 5 days.
Frequently Asked Questions
The Bottom Line
So, with all of the necessary information laid out in front of us, it’s time to answer the question of whether or not TD Banks business loans are the right fit for your business.
Though only you can decide the right move for your business, just keep in mind, no matter how ideal the terms for TD Bank business loans might be, they’re of no help to your business if you can’t qualify for them, or even if they come in too late to cover the expenses that you need them to.
In short, if you need quick, accessible funding, then we suggest you look elsewhere other than TD Bank business loans—or any bank business loans—to find it.
