Bank of America Small Business Loans – What You Need To Know

Bank of America Small Business Loans – What You Need To Know
Amy Fontinelle
on July 30, 2017
Read in 5 min

Are you considering Bank of America for a small business loan?

If you’re a small business owner considering Bank of America for your capital needs, this guide will provide a quick overview of their small business loan options.

Unsecured Business Loans from Bank of America

Unsecured business loans can be desirable by small business owners because they don’t require you to put up collateral, like property or vehicles, to secure the debt.

This increases the risk on the lender’s part and that is often reflected with a higher APR.

BoA’s Unsecured Small Business Line of Credit

Bank of America offers unsecured business lines of credit from $10,000 to $100,000.

To qualify, you’ll need two years of business history and $100,000 in gross annual sales for the previous year.

Interest rates start at 5.75% and depend on your creditworthiness, line amount, and overall relationship with the bank.

The advantage with a line of credit is that you’ll only pay interest on the funds you actually borrow.

The origination fee is $150, and there are no cash advance fees.

If approved, you’ll be able to access your funds in 10 business days.

An unsecured line of credit is an alternative to a business credit card. The interest rates can be lower and you’re required to repay the loan on a predetermined schedule, which can help you get out of debt faster and save on interest.

If that’s not fast enough, consider these 7 Fast Business Loan Types for When You Need Funds Quickly.

Bank of America’s Unsecured Small Business Loan

Don’t want to put up collateral but still want to borrow a lump sum?

No problem – Bank of America offers unsecured business installment loans, too.

You can borrow $10,000 to $100,000 for 12 to 60 months while paying as little as 4.75% APR plus a $150 origination fee.

As with BoA’s other loans, you’ll need a two-year history and $100,000 in gross annual sales for the previous year to qualify.

Small Business Medical Practice Loans from BoA

If you’re in the medical industry, BofA may be able to offer funding for a medical practice for as little as 1.89% for the first year.

The catch is that this ultra-low rate comes with a loan prepayment penalty.

Financing is available for dentists, veterinarians, and other qualified medical specialties.

You can also get a loan to start a new office, improve or expand your office, consolidate business debt, and more.

Interest rates and other terms depend on the details of your situation and your borrowing requirements.

Secured Business Loans from Bank of America

One of the reasons a lender like Bank of America might issue secured business loans is because they afford some legal recourse in the event you default on your loan payment.

Bank of America small business loans may be secured with a lien on business assets, a piece of property like a building, or an endorsement from the Small Business Administration.

BoA’s Secured Small Business Line of Credit

If you want a secured line of credit from Bank of America, you can get one with a blanket lien on your assets or a certificate of deposit.

The bank may consider other types of collateral, and lines less than $100,000 may not require collateral.

To qualify, you’ll need two years of business history and $100,000 in gross annual sales for the previous year.

Credit lines start at $25,000; the maximum depends on your borrower profile.

Interest rates are as low as 4.75% depending on your creditworthiness, line amount, and overall business relationship with BofA.

Upfront and renewal fees vary by line amount.

Bank of America’s Secured Business Loan

Bank of America’s secured business loans, like its secured business lines, start at $25,000.

Use the proceeds to buy inventory and materials, refinance debt, or finance receivables, among other options, and secure the loan with the collateral of your choice.

Pay as little as 4.00% fixed with an origination fee of 0.5% of the amount you borrow.

Your business must have a two-year history and $100,000 in gross annual sales for the previous year to qualify for a secured business loan.

Apply by phone or in person.

For tips on what to do after you get a loan funded, see A Beginner’s Guide to Making the Most of Small Business Loan Money.

Equipment Financing

Need to a light duty truck or commercial fleet financing,?

How about a forklift or point-of-sale systems and cash registers?

Use an equipment financing loan to pay for items like these that will have a long, useful life before they require replacement or an upgrade.

At Bank of America, these loans start at $25,000; you can borrow up to 80% of the purchase price and pay it back over as long as five years.

No cash for the down payment? Consider a lease purchase instead.

You’ll pay an origination fee of 0.5% and a fixed interest rate based on your overall business relationship with BofA.

Small Business Auto Loans

If all you need is a single transport vehicle, Bank of America can get you a small business auto loan of around $10,000.

Fixed rates start at 3.09% APR and terms last 48 to 72 months for small business auto loans from BoA.

Your actual APR will depend on your creditworthiness, loan term, loan amount, state of residence, and applicable BoA discounts.

There’s no application fee, and you’ll get a 30 day rate-lock guarantee while you shop around for the perfect vehicle, which must have fewer than 75,000 miles and be less than 5 years old to qualify for Bank of America financing.

Commercial Real Estate Loan

BoA offers commercial real estate loans to buy business property, refinance a commercial loan, or access your equity.

You can also use these small business loans from Bank of America to expand or remodel.

The bank will let you finance $25,000 to $2 million, up to 80% of the property’s value including fees and closing costs.

For example, if you own a building worth $1 million, you could borrow up to $800,000 minus loan fees and closing costs.

Interest rates depend on your creditworthiness and overall relationship with BofA.

Choose from a 10-year term with a balloon payment or a 15-year term with full amortization.

Lines of credit for commercial real estate are also available, but they come with a 0.5% upfront fee, a 0.5% annual fee, closing costs, and annual appraisal fees.

SBA Loan

Borrowers who have trouble qualifying for the options above can seek consideration for an SBA loan, which has looser requirements but a more thorough application process.

See Business Lenders

Among SBA lenders, Bank of America has a small program — it made just 63 SBA loans totaling $34.1 million in 2016.

By contrast, Wells Fargo, the largest issuer of SBA loans, issued more than 1,500 SBA loans totaling nearly $459 million in 2016.

BoA offers SBA 504 and 7(a) loans starting at $350,000 and Express loans starting at $10,000.

To learn more, see Government Loans: The Ultimate Guide to SBA Lending.

How to Apply for Bank of America Small Business Loans

If you decide to apply for a loan from Bank of America, the next step is to gather all the information you’ll need for your application.

Business information:

  • Name
  • Business street address (no P.O. boxes) and date moved to current address
  • Phone number
  • 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 (showing lender, current loan balance or credit limit, and monthly payment)

Business owner or guarantor information:

  • Name
  • Home street address (no P.O. boxes)
  • Home phone number
  • SSN
  • Date of birth
  • Personal income
  • Residence status (rent or own) and monthly housing payment
  • Where applicable, specific information about the equipment, vehicle, or real estate you intend to finance

Read about the 5 C’s of Credit for more information that will help you qualify.

Bank of America Small Business Loans – The Bottom Line

Bank of America offers almost various different types of business financing for qualified borrowers.

It made our list of banks for small businesses for good reason.

If you’re looking for a business loan, we can help connect you to a lender in our network:

See Business Lenders

Amy Fontinelle Finance Journalist

Amy Fontinelle is a writer, editor, and personal finance expert.

Her articles have appeared at Investopedia, Bankrate, MassMutual.com, The Simple Dollar, Interest.com, Yahoo, Forbes.com, SFGate.com, Bankaholic, Mortgage-Calc.com, Saving Advice and other sites.

Amy’s clients include personal finance websites, financial institutions, public policy organizations, academic journals, and professional economists.

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Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.