U.S. Bank is the fifth largest commercial bank in the United States. It's an SBA preferred lender and ranks fifth on the SBA's list of the 100 most active SBA 7(a) lenders. It's based in Minneapolis, Minnesota, and has more than 3,000 branches across 25 states. It offers a full suite of small business financing, including SBA 7(a) loans ranging in size from $5,000 to $5 million.
Like every SBA lender we reviewed, U.S. Bank considers both your business and personal credit histories when evaluating your creditworthiness. It requires you to pledge business collateral to secure the loan, and anyone owning 20% or more of the business must provide a personal guarantee. However, unlike most of its competitors, it doesn't require you to have life insurance in case you die before fully paying back the loan.
U.S. Bank doesn't disclose its interest rates and fees online, but like the other lenders we reviewed, they're based on prime rates and comply with the SBA's interest rate caps of prime plus 2.25% to 2.75%. Interest rates may be either fixed or variable, depending on the particulars of your loan. Repayment terms depend on the project the loan funds. Business financing for working capital and inventory has a seven-year term. Funding for debt refinancing has a term up to 10 years. Proceeds used for business acquisition, equipment purchase or leasehold improvements have a 10-year term.
This lender has the widest range of down payments in our review. The down payment for your loan depends on the amount of your loan and the project it funds; it may be as low as 0% or as high as 30%. U.S. Bank doesn't disclose its debt service coverage ratio, which is the cash flow your business must have to qualify for financing. Combined with the absence of rates and fee information on the website, this makes U.S. Bank less transparent than many loan services.
An SBA 7(a) loan from U.S. Bank carries a guarantee fee on the portion of the loan backed by the SBA as well as closing costs. However, U.S. Bank is one of just two lenders we reviewed that doesn't charge some of the ancillary fees, such as an application, referral or loan packaging fee. Packaging fees in particular can get very high with other lenders.
You cannot apply for an SBA 7(a) loan from U.S. Bank online. If you need less than $250,000 and want an SBA Express loan, you can visit a local branch to meet with a loan officer or fill out an online form to have a banker contact you. If you need more business financing than that, you fill out a form to have an SBA specialist contact you. After your loan is approved, it takes 30 days to receive your business funding, which is an average amount of time among the lenders we reviewed.
U.S. Bank is one of the SBA's top 100 lenders and offers a full range of business banking services. It's one of the few lenders that doesn't charge a packaging fee, which may save you significant money. However, the down payment is variable and may be either one of the lowest or one of the highest, depending on the project your loan will be funding. U.S. Bank lacks the transparency we looked for in small business lenders, as it doesn't post details about its rates and fees on its website.
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