Bank of America Business Loan Review

A nice range of business lending options for established businesses

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Our Take

Bank of America offers both secured and unsecured business loans and lines of credit for established businesses. Although the application process is more hands-on and longer than with some other lenders, you may score more favorable rates and terms. To qualify, however, minimum revenue requirements may be out of reach for some.

  • Pros and Cons
  • Key Takeaways
  • Company Overview
Pros and Cons
  • Interest rate discounts for Preferred Rewards for Business customers

  • Secured and unsecured options

  • More loan amount flexibility than other banks

  • A prepayment fee may apply

  • Some loan applications can’t be done online

  • Application and funding turnaround may be slow

Key Takeaways
  • Bank of America offers both unsecured and secured business loans and lines of credit for established small and mid-sized businesses.
  • Loan terms range from one to five years for most business lending products.
  • Business loan processing will take longer than other lenders that promise same-day or next-day decisions.
  • Bank of America offers competitive rates, but expect to pay an origination fee on most lending products.
Company Overview

Bank of America is the second largest bank in the nation, offering a full suite of personal and business financial products, as well as investing and asset management services. Its roots extend back 240 years, and today, Bank of America serves about 68 million consumer and small business customers in the United States, and operates in 35 countries.

  • APR Range Starts at 6.75%
  • Loan Amount $10,000 and up (maximum varies by program)
  • Loan Terms 12 to 60 months for most products
  • Recommended Minimum Credit Score Above 670 (for term loan)
  • Origination Fee $150 to 0.5% of credit line (depending on product)
  • Late Fee Varies by product

Pros Explained

  • Interest rate discounts for Preferred Rewards for Business customers: If you’re taking a business line of credit or term loan, you can score a 0.25% to 0.75% interest rate discount, depending on your Preferred Rewards for Business tier.
  • Secured and unsecured options: Whether you’re hoping to build up your business credit or it’s already well established, there are loans and lines of credit to match your needs. Secured products can be backed by cash, assets, or certificates of deposit.
  • More loan amount flexibility than other banks: The minimum loan amount is $10,000 on some of Bank of America’s products, which is on the lower end compared to other business lenders.

Cons Explained

  • A prepayment fee may apply: This can vary depending on the type of financing you’re getting, so be sure to check when you’re applying whether a prepayment fee applies in your specific situation.
  • Some loan applications can’t be done online: Bank of America specifies that for certain products, like secured loans, you’ll need to contact the bank to make an appointment or work over the phone.
  • Application and funding turnaround may be slow: Unlike some alternative lenders that offer same-day or next-day approvals, a traditional bank like Bank of America has a more involved underwriting process. For loan applications that require an in-person appointment, it can take even longer.

Types of Business Loans Offered by Bank of America

Bank of America has a variety of business loan programs, both secured and unsecured, for established small and mid-sized businesses. 

  • Business Advantage credit line: Having access to funds when and if you need them can be convenient for businesses. This credit line starts at $10,000 with interest rates of 9.25% and up. You’ll need two years in business and $100,000 in annual revenue. 
  • Business Advantage cash-secured credit line: For those who want to establish their business credit, a cash-secured credit line is one way to do it. Your minimum deposit is $1,000, and whatever you put down will serve as your credit line. To qualify, you’ll need to have been in business for six months or more and have $50,000 in annualized revenue. Once you build up your credit and keep the account in good standing for 12 months, Bank of America will review your file and graduate you to an unsecured line of credit if you meet the standards. 
  • Secured business line of credit: This credit line starts at $25,000 with interest rates of 8.5% and up. If you’re aiming for a credit line that’s more than $100,000, expect to put up collateral like a blanket lien on general assets or a certificate of deposit (CD). Each year, Bank of America will review your account to see if you are eligible for renewal. You’ll pay a fee of $150 per year on line amounts up to $100,000; $250 if the line is between $100,000 and $250,000; and 0.5% of the line amount for anything over $250,000. To qualify, you’ll need at least two years in business with you as the owner and a minimum of $250,000 in annual revenue.
  • Business Advantage term loan: If you prefer a loan with a fixed payment, Bank of America unsecured business loans start at $10,000 with interest rates of 6.75% and up. Available terms are from 12 to 60 months, and you’ll pay an origination fee of $150. To qualify, you’ll need two years in business under existing ownership, $100,000 in annual revenue, and a credit score of 670 or higher.
  • Secured business loan: Bank of America’s secured business loan has a minimum loan amount of $25,000 and rates start at 6.5%. The origination fee is 0.5% of the amount borrowed. Terms can be up to four years when using assets to secure or five years when using a CD. To qualify, you’ll need at least two years in business under existing ownership and a minimum of $250,000 in annual revenue.

Other Types of Specialty Business Loans

  • Multiple SBA loans (Bank of America is an SBA Preferred Lender)
  • Business Advantage auto loans from $10,000 and 48- to 72-month terms
  • Equipment loans from $25,000 and up to five-year terms
  • Practice loans for medical, dental, and veterinary offices

Time to Receive Funds

Bank of America doesn’t offer a specific timeline other than to say “our team will work closely with you to make sure your financing is in hand as soon as possible.” You won’t find the speedy service or same-day funding that some online lenders offer, but by having all of your documentation ready and answering follow-ups in a timely manner, you can speed up the process.

Borrower Requirements

The term business loan and unsecured line of credit require a 670 or higher FICO score, but credit requirements for other products are not disclosed. 

Bank of America also prefers to work with established businesses with ample revenue. Only the cash secured line of credit has slightly less stringent requirements of six months in business and $50,000 in annualized revenue.

You’ll also be asked for a number of business documents as you go through the underwriting process, including most recent business and personal tax returns and/or financial statements available. 

Bank of America Business Loan Features

  • Military discount: Some loan products offer a 25% discount on loan administration or origination fees for veterans, active duty service members, or reserve members of the U.S. Armed Forces.
  • Free business credit score: Bank of America partnered with Dun & Bradstreet in 2021 to become the first financial institution to provide small business clients with free business credit score access. You must be a Business Advantage 360 customer.
  • Preferred Rewards: Any business customer can join Preferred Rewards. Just sign up for a Bank of America business checking account and maintain a combined average daily balance of $20,000 or more in qualifying Bank of America business deposit accounts and you qualify. As a member, you may be eligible for lending product discounts and other perks.

Can You Refinance a Business Loan With Bank of America?

Bank of America indicates that its business loan products can be used to refinance existing business debt.

Customer Service

You can contact Bank of America’s general business banking hotline, 888-287-4637, six days per week: Monday through Friday 7 a.m. to 11 p.m. ET and Saturday 8 a.m. to 8 p.m. ET.

The bank also has a dedicated Twitter account. You can send direct messages with your questions to @BofA_Help.

Customer Satisfaction

Bank of America does not have strong customer reviews. On Trustpilot, the review average is just 1.4 out of 5 stars (although this includes both business and consumer banking reviews). It does have an above average ranking in JD Power’s 2022 U.S. Small Business Banking Satisfaction survey, however, coming in eighth out of 17 institutions.

Applying For a Bank of America Business Loan

If you are a Bank of America business banking customer, applying for an unsecured business loan or unsecured business line of credit is a bit easier since you can apply online. For other types of accounts, or if you’re not already a customer, you can schedule an appointment by phone or at a branch near you to work with a business lending specialist.

Bank of America doesn’t offer pre-qualification, so you’ll have to start the application process to find out the rates and terms available to you. 

When filling out an application (online or guided by a bank specialist), you’ll be asked to share your basic business information, including:

  • Business address
  • Tax ID
  • Type of business
  • When the business was established
  • Number of employees
  • Net profit and sales
  • Any existing debt

You’ll also have to provide personal details for each person listed on the account, including Social Security number, passport number, date of birth, address, personal income, and housing payment information.

You should have documentation available including your most recent business and personal tax returns and financial statements.

Alternative Business Loan Lenders

Bank of America OnDeck Kapitus
Line of Credit Amount From $10,000 Up to $250,000 Up to $250,000
Loan Terms Not disclosed Up to 24 months 3-18 months
Recommended Minimum Credit Score 670 625 650

Final Verdict

If you are a business banking customer at Bank of America already (or just prefer to work with a large bank), and have a well-established business, it’s worth exploring the various financing options if you’re in need of funds for your business. Though full rate information is not disclosed, the best rates are very competitive if you can qualify for them, and likely better than you’ll find with alternative lenders.

Bank of America has a less than stellar customer service reputation and the lending process may take some time. If any of its lending products are a great fit for you, and you can score a great rate, those are details that you may be willing to overlook.

Does Bank of America Have Startup Business Loans?

Bank of America requires at least two years of business history for most of its products. If you’re interested in startup loans, you can look into SBA loans, which Bank of America also services. 

Can You Qualify For a Bank of America Business Loan With Bad Credit?

Bank of America has a 670 credit score requirement for its unsecured loan and line of credit, but doesn’t disclose what you’ll need for the secured products. That said, there are no specific “bad credit” loans for businesses as you may find with other lenders.

Is a Bank of America Business Loan a Line of Credit?

Bank of America offers both term loans and business lines of credit.

Can You Refinance a Bank of America Business Loan?

Like most business loans, you should be able to refinance a Bank of America loan should you choose to do so.

Article Sources
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