Are Planters Bank Business Loans Right for You?
Headquartered in Hopkinsville, Kentucky, Planters Bank has 12 physical locations serving individuals and business owners in Western Kentucky and Clarksville, Tennessee. Planters Bank offers several types of business loans, in addition to providing their business clients with bank accounts, merchant services, payroll services, trust and retirement planning services, treasury management solutions, and online banking. Planters Bank business loans can help small- and medium-sized businesses with a huge range of financial concerns, whether that’s expanding their enterprises, opening new locations, purchasing equipment, or general working capital.
In this review, we’ll take a closer look at each of these Planters Bank business loans—and if you decide that a Planters Bank business loan isn’t the right fit for your business, then you can consider one of our suggested loan alternatives, instead.
Planters Bank Business Loans: Overview
Like many local banks, Planters Bank doesn’t provide details about their business loans on their website—such as loan amounts, interest rates, terms, and eligibility requirements—as small institutions especially encourage prospective clients to visit their local branch and speak to a representative about their loan options. Handily, however, Planters Bank does provide a commercial business loan application that you can download online, and which you can complete in advance of meeting your Planters Bank loan officer in person. Also remember that you can call Planters Bank if you run into any questions when filling out your application.
Despite this dearth of specific information, we’ll tell you more about each type of business loan that Planters Bank offers. That way, when you do meet with a bank representative, you’ll be better informed about which loan on their docket provides the right solution for your business’s financial needs.
Commercial Real Estate Loans
Planters Bank business loans include options for small business owners seeking capital to purchase or renovate commercial real estate. In addition to general commercial real estate loans, Planters Bank also offers business loans designed especially for the development and construction of commercial property, as well as loans for the construction and/or expansion of existing commercial facilities.
The amount of money you receive for a commercial real estate loan generally depends on the value of the property (or loan-to-value ratio), and most require a down payment. Interest rates can be as low as 5% and loan terms can extend up to 25 years, but as always, the exact rate and terms of your commercial real estate loan will depend upon your business’s financials and credit score, the scope of your project, and the lender itself.
Accounts Receivable Loans
Planters Bank business loans also include accounts receivable financing, which can be a valuable financing method for small business owners for whom the bulk of their cash flow is tied up in unpaid invoices.
If you’re approved for this type of asset-based financing, your lender will typically advance you 80% to 100% of the value of your outstanding invoices in cash, minus a weekly fee until your client pays your invoice in full (and in this case, your customers will pay their invoices directly to your lender).
Unsurprisingly, accounts receivable lenders base their loan decisions and terms based chiefly on the quality of your outstanding invoices, which makes this type of financing slightly easier to qualify for than conventional loans. Of course, it always helps to have a strong credit score, experience in your industry, and to have reliable and creditworthy customers whom the lender can trust to fulfill their payments on time and in full. (It should also go without saying that in order to qualify for invoice financing, you need to be a business that invoices your customers.)
If you’re seeking capital specifically to purchase equipment, then you should consider equipment financing from Planters Bank. Equipment financing does exactly what the name suggests: These loans help business owners access the costly equipment they need to run their business, whether it’s software and furniture for your new office or heavy machinery for your construction company.
Here again, the amount of cash your lender will front you depends mostly on the value of the equipment itself, as it’ll act as collateral in case you default on your loan. Loan terms depend on the equipment’s expected lifetime, and interest rates are typically fixed. Because these loans lean so heavily on the value of the equipment rather than the business owner’s financials, it can be easier for new business owners or those with challenged credit to qualify for equipment financing than other types of business loans.
Letters of Credit
Letters of credit aren’t loans, but a type of financing tool that businesses use when conducting international trade. While letters of credit can be fairly complex, essentially this document—issued by banks like Planters Bank—guarantees that the seller will receive payment from the buyer according to agreed-upon terms. Letters of credit also guarantee that if the buyer isn’t able to fulfill these terms, then the bank will pay the seller on their behalf.
Lines of Credit
Other than business term loans, business lines of credit are the most common type of financing available, which pretty much every bank, whether big or small, will offer.
If you’re approved for a line of credit, then your lender will deliver a pool of funds right to your business bank account. You can pull any amount (up to your predetermined limit) at any time you need, and you’ll only be responsible for repaying the cash you use, plus interest—and until you use it, your line of credit will sit in reserve in case of emergency (or opportunity!). Once you’ve repaid your debt, your credit line will restore to its original amount.
Generally, banks can offer business lines of credit between $10,000 and $250,000, though regional institutions like Planters Bank lean on the lower end of that spectrum. Also be aware that your line of credit’s amount and interest rate will depend heavily on your business’s financials and credit score, so businesses that present stronger numbers will typically receive higher loan amounts, more favorable terms, and lower rates.
Working Capital Loans
Broadly speaking, working capital loans provide business owners with the cash they need for their daily operations. Structurally, working capital loans can be any type of short-term loan, like a conventional term loan with a quick repayment period (typically three to 18 months) or a short-term line of credit. Specialized loans that free up a business’s cash flow, like invoice financing, can also qualify as a “working capital loan.” You’ll need to get in touch with a Planters Bank representative to understand exactly which type of loan this institution offers their business clients seeking working capital.
Planters Bank business loan options also include SBA loans, which are guaranteed by the government but are disbursed by intermediary lenders (like Planters Bank). Actually, SBA loans are an umbrella term encompassing this independent federal agency’s several specific loan programs, though SBA 7(a) loans and SBA 504 loans are among the most popular—where the former can be used for almost any business-related purpose or purchase and the latter provides funds for commercial real estate-related projects. Planters Bank doesn’t specify which SBA loans they offer, so you’ll need to get in touch to learn more. Regardless, SBA loans can provide business owners with some of the highest loan amounts, lowest interest rates, and longest repayment terms on the market.
Although they’re designed to make capital more accessible to more American business owners, SBA loans are notoriously competitive, so you’ll still need to present strong credentials (and fulfill SBA loan requirements) to qualify. But one of the benefits of working with a small bank, like Planters Bank, is that you’ll have plenty of access to professionals who can guide you through this demanding application process.
Top Alternatives to Planters Bank Business Loans
Bank loans are ideal for their high loan amounts and low interest rates—but because of those generous terms, they’re tough to qualify for. If you don’t currently have the right financials and credit score to qualify for Planters Bank business loans, you might consider working with an alternative lender.
While online lenders can’t offer the same excellent terms that banks can, these platforms exist to make financing accessible to the businesses that typically can’t meet banks’ stringent eligibility requirements. And as all these platforms leverage technology, applying for online loans is simple and fast, and you’ll often receive a loan decision in a matter of days (if not less) and immediate access to approved funds—and you’ll never need to step foot in a bank.
In particular, we’d recommend taking a look at the following alternative lenders, both of which are in the Fundera network:
If you can’t yet qualify for a Planters Bank business loan, consider a line of credit through Kabbage instead. This online lender offers short-term lines of credit of up to $250,000, with either six-, 12-, or 18-month terms. For six- or 12-month loans, you’ll pay an interest rate between 1% and 10% for the first few months of your loan, but your rate will drop to 1.25% for the remainder of your loan term. Kabbage’s 18-month loan carries a flat monthly fee between 1.25% and 3.25% for the duration of your loan.
To be eligible for a Kabbage line of credit under $100,000, at a minimum your business needs to make $50,000 in annual revenue, have been in business for one year, and you’ll need a personal credit score of 550. If you’re in the market for a line of credit over $100,000, at a minimum Kabbage needs to see an annual revenue of $1 million, a 680 credit score, and three years in business. That said, Kabbage considers applications holistically; so if your credit score is struggling, for instance, you may still qualify for a Kabbage line of credit if your other credentials are strong.
Another alternative to Planters Bank business loans is Fundation, which is a great option if you’re seeking conventionally structured lump-sum financing through an alternative lender. This premium online lender can offer term loans up to $500,000 at repayment terms of up to four years, though you won’t incur any prepayment fees if you can pay off your Fundation loan early.
The cost of your loan depends upon your business’s risk level, which Fundation determines based on several factors: your business’s finances, stability, credit history, and your cash flow and debt. Typically, however, Fundation’s interest rates range between 7.9% and 28.9%. Also keep in mind that you’ll be responsible for bimonthly payments.
The Bottom Line
For a small regional bank, Planters Bank offers an impressive array of financing products and tools for their business clients—but of course, none of these Planters Bank business loans are viable options if you’re not located near one of their 12 locations.
In that case, consider applying for a loan through an alternative lender, whether that’s one of the platforms we mentioned or any number of other online lenders—though we’d recommend working with one of our partners, as they’re among the most trusted platforms in the alternative lending space. And if you’re intent upon securing a bank loan, keep in mind that our loan specialists can help you determine whether you’re qualified for a loan from a brick-and-mortar institution or an SBA loan.
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.