Although qualifying can be difficult, banks remain the most common source of credit for small businesses — compared with options such as online lenders, community financial institutions and credit unions
Business bank loans offer low interest rates, long repayment terms and can be used for a variety of purposes. The right bank for you should offer the small-business loan you need, as well as fund enough loans to make financing possible.
Here, we reviewed the best banks for small-business loans based on their commercial and industrial lending volume, product offerings and qualifications, among other features.
1. Bank of America
Best for: Customer relationships and loyalty programs.
Bank of America business loans are a good choice if you value rewards and use other Bank of America or Merrill products. By meeting certain account requirements, you can qualify for interest rate discounts, no fees on wire transfers and other benefits. Bank of America may also make sense for veterans and service members, as it offers them a 25% discount on loan administration or origination fees.
Bank of America is also the biggest commercial and industrial loan bank lender in the U.S. — according to data released by S&P Global Market Intelligence in June 2023 — surpassing the next closest lender by nearly $130 billion
.
Here’s what Bank of America has to offer:
Term loans. Bank of America issues both fixed-rate secured and unsecured term loans. Its secured loan requires greater annual revenue: $250,000 versus $100,000 for the unsecured option. But it offers higher borrowing limits — up to $250,000 — and a potentially lower interest rate. Both business loans require at least two years in business and can have repayment terms of up to five years, which is less than other banks may offer.
Business lines of credit. Bank of America also offers secured and unsecured business lines of credit, with the same revenue requirements as its term loans. The secured line of credit comes with additional borrowing power — starting at $25,000 compared with $10,000 for the unsecured option. There is no set borrowing maximum. Both have revolving terms, meaning you use the money as needed, that renew annually.
For newer businesses (those with at least six months in operation), Bank of America offers a cash secured business line of credit. With this product, you must provide a minimum initial deposit of $1,000 and these funds serve as your credit line. You can then use the line of credit to cover daily expenses, make regular payments and establish a positive account history — with the goal to transition to an unsecured business line of credit.
SBA loans. Bank of America is a preferred Small Business Administration lender, but it is less active in issuing SBA loans. For example, Wells Fargo and U.S. Bank lend more 7(a) loans
— the most common type of SBA funding.
Other business loans. Bank of America offers business auto loans starting at $10,000. The bank also has commercial real estate loans and equipment loans, which both start at $25,000.
2. JP Morgan Chase
Best for: Variety of small-business products.
Chase offers a range of products for small-business owners, including checking accounts, credit cards and payment solutions. Chase business loans include:
Term loans. Chase offers fixed- and adjustable-rate loans starting at $5,000, which is less than lenders like Bank of America or PNC Bank. Repayment terms can last up to seven years.
Business lines of credit. Chase has business and commercial lines of credit. Its business line of credit provides $10,000 to $500,000 in funding on a renewable five-year revolving term. The commercial line is $500,000 and up, with one- to two-year terms that may be renewed.
SBA loans. Chase is an SBA-preferred lender and funds multiple types of SBA loans. That includes SBA Express loans and credit lines, which offer faster funding of up to $500,000.
Other business loans. Chase offers commercial real estate loans with fixed or variable rates that start at $50,000. Terms are available up to 25 years. Chase also gives you the option to pay back the loan on a standard repayment schedule — or pay it back with a balloon payment at the end of the term.
» MORE: See Chase's business credit card options
3. Wells Fargo
Best for: SBA loans.
Wells Fargo offers SBA loans and multiple types of lines of credit, however, its lending maximums are less than some banks — so consider other options if you have collateral and need more than $500,000 in financing.
Business lines of credit. Wells Fargo has three different lines of credit — two unsecured and one secured by collateral — ranging from $5,000 to $1 million. Credit lines of up to $150,000 have variable rates and are revolving. You’ll typically need at least $2 million to $10 million in annual sales to qualify for Wells Fargo’s most generous business line of credit. This line of credit has a one-year term. Fees vary by product.
SBA loans. Wells Fargo is one of the most active SBA loan lenders. As of July 2023, it had approved more than $306 million in SBA 7(a) loans in the 2023 fiscal year (which began in October 2022).
Other business loans. Wells Fargo offers semi truck financing, commercial real estate purchase loans and equity financing, as well as specific products for starting or buying a medical practice.
» MORE: Compare the best SBA lenders
4. Citibank
Best for: Simple options and in-person service.
Citibank may be better known among entrepreneurs for its small-business credit cards. But the bank also offers business loans — though it has fewer products than other lenders. If you prefer that simplicity, Citi might be the right option for you.
Citi can also be a good choice if you prefer an in-person, hand-on loan application experience. Whereas many banks offer at least some type of online application option, you can only apply for a business loan from Citi by visiting a branch location.
Term loans. Citibank’s term loan ranges from $5,000 to $5 million. Interest rates are fixed, terms last up to seven years and loans require a personal guarantee. Citi doesn't offer an equipment loan, but term loans can be used for this purpose.
Business lines of credit. Citibank offers two business lines of credit, with amounts ranging from $10,000 to $5 million. Both lines come with variable interest rates and revolving terms and require a personal guarantee.
SBA loans. Citi is an SBA preferred lender and issues SBA loans up to $5 million. The lender doesn’t provide additional information on its website, so you’ll have to contact a lending representative to learn more.
Other business loans. Citi also provides specialized healthcare practice business loans and commercial mortgage loans, with amounts ranging from $250,000 to $5 million.
5. PNC
Best for: Well-established businesses.
PNC’s business loans are best for more mature businesses. You generally need to have been in business for at least three years to qualify, which is longer than other banks may require.
Term loans. PNC offers $20,000 to $100,000 for unsecured term loans and $100,001 and above for loans secured by collateral. Unsecured loans come with a fixed interest rate and terms of up to five years, whereas rates on secured loans can be fixed or variable and terms can last up to seven years.
Business lines of credit. The amounts for PNC’s lines of credit mirror the bank’s term loans, with unsecured options ranging from $20,000 to $100,000 and secured options of $100,001 and up. Both have variable interest rates and revolving terms. The unsecured line has an annual fee of $175, while the secured credit line charges 0.25% of the committed line amount.
SBA loans. PNC is a preferred SBA lender, but the bank is less active than others issuing these loans. As of July 2023, PNC had approved just over 4,800 SBA 7(a) loans, compared to Wells Fargo and U.S. Bank, which each approved over 1,500 in the 2023 fiscal year.
Other business loans. PNC business auto loans range from $10,000 to $250,000 with repayment terms up to six years. The bank’s commercial real estate loans come with fixed or variable interest rates, repayment terms up to 15 years (with up to a 25-year amortization) and financing amounts of $100,001 and up.
6. U.S. Bank
Best for: Startups.
U.S. Bank has fewer locations than other brick-and-mortar banks, including Bank of America and Wells Fargo. But if there’s a branch near you, U.S. Bank may be a good choice for startups, as you may be able to qualify for certain products with less than a year in business.
Term loans. U.S. Bank offers fixed-rate, secured term loans of up to $1 million. It also offers a fast business term loan, which has a lower borrowing maximum ($250,000) but a quicker application process. The Quick loan can be secured or unsecured and offers repayment terms of up to seven years. This product can be a good option for newer companies as you only need a minimum of six months in business to apply.
Business lines of credit. U.S. Bank’s business line of credit also goes up to $1 million and has an interest-only payment option. The bank’s revolving line of credit, called CashFlow Manager, goes up to $250,000 and only requires a minimum of six months in business to qualify. That product has a $150 annual fee if the line of credit is less than $50,000.
SBA loans. U.S. Bank may be another good choice if you’re in the market for an SBA loan. As of July 2023, it had approved nearly 1,700 7(a) loan applications in the 2023 fiscal year. Plus, you may be able to qualify for an SBA loan from U.S. Bank with fewer than two years in business.
Other business loans. U.S. Bank offers equipment loans of up to $1 million, and soft costs of up to 25% can be included. The bank has fixed- and variable-rate commercial real estate loans of up to $10 million with five-, 10- or 15-year repayment terms, with amortizations up to 25 years.
How to get a business loan from a bank
Although the pandemic and market conditions have led banks to tighten their lending standards, it’s still possible to access this type of business financing. Here’s what you need to get business loan from a bank:
An existing relationship
Most banks require you to have at least a business checking account at their institution. While you can simply open an account at some banks to meet this qualification, you can often benefit from a longer-term relationship. For example, you need an account with Wells Fargo for at least one year to apply for financing online.
Good credit
You’ll likely need a personal credit score in at least the 700s — although some lenders may be a little more flexible than others. Bank of America, for instance, accepts a minimum credit score of 670 for its unsecured term loan.
Potential deal-breakers in your credit history could include too much debt, too many open accounts or negative marks — like late payments, loan defaults and bankruptcies. The bank will check your business credit score for similar red flags.
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