Bank of America Small Business Loans: 2023 Review

Q: How long does it take to get a business loan from Bank of America?

Bank of America does not publish the time it takes to get a business loan, though it can be expected to take longer than it would take with an online lender.

Q: Is it hard to get a loan from Bank of America?

It can be. Bank of America typically requires at least two years of business history and solid revenues to qualify for a loan. While it doesn’t publish its minimum required credit scores, banks typically only work with businesses that have excellent credit.

Q: Is Bank of America an SBA approved bank?

Yes, Bank of America is a Preferred Lender with the Small Business Administration (SBA).

Q: What happens after an SBA loan is approved?

Once you are approved for a Small Business Administration (SBA) loan, you will receive the funds in your business bank account within a few days or weeks.

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Susan GuilloryUpdated January 14, 2023

Overview of Bank of America

Bank of America is a well-established bank that offers many different types of small business loans, including SBA loans, term loans, business lines of credit, and business auto loans. They also offer business checking accounts and business credit cards, making them a one-stop shop for business financial services.The bank offers interest rate discounts to existing customers who take out a business loan through its Preferred Rewards program, as well as interest rate discounts to veteran business owners.The Takeaway: Bank of America can be a good choice for an established business, especially one that already has a relationship with the bank. It offers competitive interest rates and terms, plus benefits for Preferred members. However, eligibility requirements can be stiff and time to funding can be slow compared to online lenders.

Pros and Cons of Bank of America

Pros	Cons
• Is a well-respected bank• Offers several different types of loans• Also offers business checking, savings, and credit cards• Low interest rates• Discounts for veterans	• Time in business criteria to qualify may be challenging for some• Annual revenues qualifications may be high• Can’t apply online unless you are an existing customer • May need to provide a personal guarantee• Limited information available online

Types of Small Business Loans Offered by Bank of America

Bank of America offers several types of business financing solutions. Here’s a closer look.

Secured and Unsecured Business Term Loans

A business term loan provides a lump sum of capital up front. You then pay that amount back (plus interest) in installments, typically monthly, over time. The funds can be used for almost any purpose, such as purchasing inventory or equipment or renovating office space. This type of financing is a great choice for making long-term investments to grow your business. Business term loans can be secured or unsecured. A secured term loan requires you to put up a business asset (such property, equipment, or cash in a bank account) as collateral for the loan. Should you have difficulty repaying the loan, the lender can seize that asset and sell it to recoup its losses. An unsecured loan does not require any collateral, though you may have to sign a personal guarantee to get approved for the loan.

Secured and Unsecured Business Lines of Credit

A business line of credit gives your company access to a certain amount of cash that you can borrow as needed. You only pay interest on the amount you borrow, and once you repay what you’ve used, those funds become available again. Bank of America offers unsecured lines of credit that do not require collateral, as well as secured lines of credit that must be secured by a blanket lien on your assets or a certificate of deposit.

Business Auto Loans

If your company relies on a car, van, or truck to conduct business, a small business auto loan can be an affordable way to buy that vehicle, or to refinance one you already own. Business auto loans use the vehicle itself as collateral, which means they may cost less or be easier to qualify for than other types of business loans.

Commercial Real Estate Loans

A commercial real estate loan can be used to purchase a building or property for your business. It could be an office building, industrial warehouse, apartment complex, or land zoned for commercial use. You can also use commercial mortgage loans to develop, improve, or extend existing property.

SBA Loans

SBA loans are loans partially backed by the U.S. Small Business Administration and issued by participating lenders, often banks. Bank of America is an SBA Preferred Lender and offers applicants access to the 7(a), 504, and Express loan programs. Though qualification requirements can be strict, SBA loans tend to come with flexible terms and low interest rates, making them one of the best ways to fund a small business

Franchise Financing

Franchise financing is a type of small-business loan that allows a franchisee to pay for expenses associated with buying, opening, and running a franchise. You can use this financing to cover startup and day-to-day expenses without depleting your initial investment or personal savings. Bank of America operates across the United States, its territories, and approximately 35 countries.

Bank of America Small Business Loan Terms, Rates, and Fees

Here’s a closer look at the types of small business loans offered by Bank of America. Since the bank does not publicly disclose minimum credit score requirements or time to funding for their loans, we were not able to include these criteria in our comparison.

	Loan amounts	APR range	Loan terms	Repayment schedule	Origination fee
Secured Term Loan	$25,000-$250,000	Starting at 6.50%	Up to 5 years	Monthly	0.5%
Unsecured Term Loan	$10,000-$100,000	Starting at 6.75%	12-60 months	Monthly	$150
Secured Line of Credit	From $25,000	Starting at 8%	Revolving with annual renewal	Monthly	Variable based on line amount
Unsecured Line of Credit	From $10,000	Starting at 8.75%	Revolving with annual renewal	Monthly	$0 origination fee ($150 annual fee waived first year)
Business Auto Loan	$10,000-$100,000	Starting at 5.79%	48-72 months	Monthly	None
Commercial Real Estate	$25,000-$5 million	Starting at 5.25%	Up to 10 years with balloon payment;up to 15 years with full amortization	Monthly	0.75%
SBA Loans	Generally up to $5 million	Varies based on your business’s qualifications, but subject to SBA maximums	Up to 25 years	Monthly	Unknown
Franchise Financing	Starting at $10,000	Unknown	Up to 25 years	Monthly	Unknown

Information accurate as of Jan. 13, 2023.

Who May a Bank of America Small Business Loan Be Right For?

Bank of America may be best for a business owner who:

Is an existing Bank of America customer. The bank offers Preferred Rewards to eligible customers, which can mean interest rate discounts and other benefits.
Has an established business. The bank will only work with businesses that have been in business (with its current ownership) for at least two years.
Has excellent credit. Bank of America doesn’t disclose its minimum required credit scores, but banks typically only loan to businesses with high credit scores.

Who Bank of America May Not Be Right For

Bank of America may not be a good lending solution for a business owner who:

Owns a new business. Like many other banks, Bank of America generally doesn’t offer financing to startups.
Can’t meet the revenue requirements. Bank of America loans require, at a minimum, annual revenues of $100,000.
Needs cash fast. Unlike online lenders that often finance within 24 hours after approval, it may take several days or weeks to get access to capital with Bank of America.

Bank of America Loan Fee Structure

Bank of America loans may come with business loan fees, including an origination fee. An origination fee is a fee charged for processing and approving the loan application. It may be charged as a flat fee or as a percentage of the loan amount. For example, for its unsecured term loan, Bank of America charges a flat origination fee of $150. For its secured business loan, it charges 0.5% of the amount borrowed.

Bank of America Loan Repayment

Generally speaking, Bank of America loans and lines of credit are repaid on a monthly basis. Terms length varies depending on the type of business loan (see charge above). While you do not need a Bank of America business checking account to apply for a business loan, some loans require payments to be auto-debited from one of these accounts.

Bank of America Funding Eligibility Requirements

Business loan eligibility requirements vary by type of loan. Here are a few examples of the criteria needed for a business loan from Bank of America.

Secured loan:
- At least 2 years in business under existing ownership
- Minimum $250,000 in annual revenue
Unsecured loan:
- 2 years in business under existing ownership
- $100,000 in annual revenue
Commercial real estate loan:
- Minimum 2 years in business under existing ownership
- Minimum $250,000 in annual revenue
Commercial auto loan:
- Minimum vehicle value of $10,000
- Maximum vehicle age of 5 years, less than 75,000 miles

Applying for a Bank of America Small Business Loan

If you have a Small Business Online Banking login, you may be able to apply for a business loan online, otherwise you’ll likely need to visit a branch to apply in person.To apply, you’ll need to provide:

Business name, address, and phone number
Business tax ID
Nature of business
Date the business was established
Business acquisition date of current ownership
Number of employees
Annual net profit
Annual gross sales
List of outstanding obligations, if any (list should include lender, current loan balance or credit limit, and monthly payment)

You may also need to provide details about each business owner and controlling manager, such as:

Name, date of birth, residential address
Social Security number (U.S. citizens) or passport number and country of issuance
Country of citizenship and country of residence
Percentage of ownership
Personal income
Residential status (rent or own) and monthly housing payment

If you’re applying for a commercial real estate loan, equipment loan, or business auto loan, you’ll need to include details about the property, vehicle, or equipment that you plan to finance.

Bank of America Alternatives to Consider

Other lenders that offer similar business loan products include OnDeck, Biz2Credit, and Lendio. Here’s how they compare to Bank of America.

OnDeck: OnDeck is a well-respected online lender that offers business lines of credit and business term loans. Qualification requirements tend to be lower than Bank of America’s. However, rates tend to be higher.
Biz2Credit: Biz2Credit is an online lender offering term loans, commercial real estate-secured loans, and working capital loans (which function like merchant cash advances) to small businesses. They typically fund much faster than Bank of America, but rates will likely be higher.
Lendio: Unlike Bank of America, Lendio is a lending marketplace that allows you to access a wide variety of different types of business loans through a single application. They partner with both alternative and traditional lenders.
Lantern by SoFi: Lantern by SoFi is a lending platform that connects borrowers to small business loans offered by some of the biggest lenders. A single application gives you access to multiple loan options, including term loans, short-term loans, business lines of credit, invoice financing, and commercial real estate loans. Loans up to $2 million are available to help you grow your enterprise.

Let Lantern by SoFi connect you with the right lender for your small business financing needs.

Frequently Asked Questions

How long does it take to get a business loan from Bank of America?

Is it hard to get a loan from Bank of America?

Is Bank of America an SBA approved bank?

What happens after an SBA loan is approved?

About the Author

Susan GuillorySu Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.

Brand names: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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