Bank of America Small Business Loan Review

Best for competitive interest rates

If you’re an entrepreneur, you can get a Bank of America small business loan at interest rates competitive with many other lenders. The company has a variety of affordable loans that you can use to cover emergency expenses, buy equipment, expand your business and more. This review takes a detailed look at Bank of America’s various business loans.

Bank of America small business loan pros and cons

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Pros

• Competitive interest rates
• Variety of loan products
• Available nationwide

Cons

• Strict eligibility requirements
• Slow approval and funding process
• Poor customer ratings and reviews

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Pros explained

Competitive interest rates

With Bank of America small business loans, interest rates start at a low point and can go even lower if certain conditions are met. Through its Preferred Rewards for Business program, the company offers a range of interest rate discounts and other benefits that can lower your cost of credit. But there’s a catch: You must have an eligible Bank of America or Merrill small business account.

While having an account with Bank of America can entitle you to rewards, you don’t need one to access the lender’s business loan options.

Variety of loan products

Bank of America has a wide range of loans to choose from, including term loans, lines of credit and secured and unsecured business loans. The lender also offers specialized loan products for specific purposes and groups. They include equipment loans for purchasing, repairing or upgrading business equipment as well as healthcare practice loans for healthcare providers.

Available nationwide

Bank of America is available across the U.S., its territories and in more than 35 other countries.

Cons explained

Strict eligibility requirements

To qualify for most Bank of America business loans and lines of credit, borrowers must have at least two years in business and an annual revenue of $100,000. One exception, the cash-secured business advantage credit line, has more relaxed requirements (six months in business and annual revenue of $50,000), but it requires a cash security deposit.

These requirements make it hard for startups and small businesses that don’t have $100,000 in annual revenue to access Bank of America credit facilities. Because of these strict eligibility requirements, you may want to research other lenders to find the best small business loans for bad credit.

Slow application and funding process

Bank of America requires that you apply for a business loan in person. The only exceptions to this are if you’re applying for a Business Advantage Auto Loan or for unsecured business loans or lines of credit and you already are using the bank’s small business online banking.

While you can schedule an appointment beforehand, the fact that you have to physically show up makes the loan application process tedious in an age where practically everything can be done online. Plus, the entire process takes up to four weeks for lines of credit and several months for some loans. Because of this, Bank of America won’t be a good fit if you need to access funds more quickly. You can look at online and alternative lenders, some of which offer the best small business loans within one or a few days.

Poor customer ratings and reviews

Bank of America has a Better Business Bureau (BBB) rating of 1.06 out of a possible 5. Several reviews point to the lender’s slow or unresponsive customer service. If you’re looking for a bank with stellar help and support, this may not be the best choice for you.

Bank of America small business loan offerings

Bank of America offers a wide range of loans that are suitable for small businesses but can be used by companies of all sizes.

Unsecured term loans

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HIGHLIGHTS

Amount

$10,000 to $100,000

Term length

One to five years

Origination fees

$150

Required time in business

Two years

Required annual revenue

$100,000

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A Bank of America unsecured term loan is a good option if you either don’t have enough assets to put up as collateral or don’t want to risk the business assets you have. With loan amounts that range from $10,000 to $100,000, this is one of the best unsecured business loans for large purchases. It offers a fixed interest rate, so your monthly loan payments will remain the same over the entire term.

Secured term loans

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HIGHLIGHTS

Amount

$25,000 to $250,000

Origination fees

0.5% of loan amount

Required time in business

Two years

Required annual revenue

$250,000

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Bank of America’s secured business term loan is harder to get because it requires at least $250,000 in annual revenue. Additionally, you must put up collateral, which can either be a business asset or a certificate of deposit (CD). The large maximum limit makes this type of loan great for scaling your business, but you risk losing your collateral if you default on the loan.

Unsecured business lines of credit

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HIGHLIGHTS

Amount

From $10,000

Term length

Renewable annually

Origination fees

Not listed

Required time in business

Two years

Required annual revenue

$250,000

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Bank of America’s business line of credit rates are competitive because borrowers can get lower rates with the lender’s Preferred Rewards for Business. Over the year, your business taps into the funds whenever it needs a cash injection, and then you only repay the amount you’ve used (plus interest), not the full amount allocated to you like you would with a term loan.

Secured business lines of credit

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HIGHLIGHTS

Amount

From $25,000

Term length

Renewable annually

Origination fees

Varies

Required time in business

Two years

Required annual revenue

$250,000

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This line of credit comes with a larger amount ($25,000) than the unsecured option. The downside is that the company requires collateral, which can be a business asset or CD. The line is renewable each year. It comes with upfront and renewal fees that vary based on the amount your business qualifies for.

SBA loans

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HIGHLIGHTS

Amount

From $25,000

Term length

Up to 25 years

Origination fees

Subject to SBA guidelines

Required time in business

Subject to SBA guidelines

Required annual revenue

Subject to SBA guidelines

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Bank of America is a preferred Small Business Administration (SBA) lender, meaning it has the authority to originate, process, close and liquidate SBA loans. It offers three types of SBA loans:

• SBA 504: Loan amounts start from $400,000 and can be repaid in up to 25 years.

• SBA 7(a): Amounts range from $200,000 to $5,000,000 and can be repaid in 25 years.

• SBA Express: This loan is offered for amounts between $25,000 and $500,000, and can be repaid in 25 years.

Since SBA loans are backed by the government, they generally have favorable terms, low down payment requirements and longer repayment periods. However, they are competitive and may be harder to qualify for compared to conventional business loans.

Equipment loans

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HIGHLIGHTS

Amount

From $25,000

Term length

Five years

Origination fees

0.5% of loan amount

Required time in business

Two years

Required annual revenue

$250,000

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Bank of America equipment loans allow you to buy, repair or upgrade business equipment like production tools, machinery and heavy vehicles. This is a self-secured loan, so the equipment acts as collateral.

Health care practice loans

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HIGHLIGHTS

Amount

Up to $5 million

Term length

Varies

Origination fees

None

Required time in business

One year

Annual revenue

N/a

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Bank of America’s health care practice loans are designed for people in medical, dental and veterinary practices. With amounts of up to $5 million, borrowers can use these loans to start, acquire or expand a healthcare business. You may also use the funds for mortgage purchases or to consolidate debts related to a medical practice.

The loans have no origination fees. If you’re approved, Bank of America will assign you a dedicated project manager who can complete payments to suppliers on your behalf.

Commercial real estate loans

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HIGHLIGHTS

Amount

From $25,000

Term length

10 years with balloon payment, 15 years with full amortization

Origination fees

0.75% of loan amount

Required time in business

Two years

Required annual revenue

$250,000

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This Bank of America small business loan is ideal for buying commercial property for your business. You can borrow amounts starting from $25,000 with a term of either 10 years (if you make a balloon payment) or 15 years (with full amortization). A balloon loan repayment consists of small monthly payments followed by one large final payment at the end of the term to clear the loan. On the other hand, a fully amortized loan has fixed monthly payments over the entire term of the loan.

Bank of America small business loan pricing

Bank of America business loan rates are generally competitive, which makes it a good lender for small businesses. In addition to an APR — which may vary depending on factors like the type of loan, amount borrowed and borrower’s credit score — the bank also charges origination fees on most (but not all) of its loans. There are also prepayment fees on certain loans.

Bank of America small business loan financial stability

Bank of America has a Standard & Poor’s rating of A, which means that the bank has a strong capacity to meet its financial obligations.

Bank of America small business loan accessibility

Bank of America is accessible in person through its network of branches and also online via its website and mobile app. The lender provides customers with the option to receive bank statements and other important documents in audio format, large print and Braille.

Availability

As the second-largest bank in the U.S., Bank of America is available nationwide and in more than 35 other countries. It has about 15,000 ATMs. The company allows customers to access their accounts either in person or online through its website and mobile app.

Contact information

Bank of America business loan customer service is available by phone at 1-800-432-1000. Customer service is available Monday to Friday from 8 a.m. to 8 p.m.

User experience

For most loans, Bank of America requires borrowers to apply in person at the nearest branch. However, the bank allows customers to apply for auto loans, unsecured term loans and unsecured lines of credit online. The process takes a few minutes, and you’ll get feedback within 24 hours, according to the lender.

Bank of America small business loan customer satisfaction

Bank of America is Better Business Bureau (BBB)-accredited and has a grade of A+. However, customer reviews on the platform point to dissatisfaction. With an overall rating of 1.06 out of 5 on the BBB website, the bank has a reputation for poor customer service. Many users say that customer support is frequently unreachable and the bank takes too long to resolve customer issues.

In J.D. Power rankings, Bank of America came in first in merchant services customer satisfaction. This suggests that there are many borrowers who are satisfied with the bank’s loan products.

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Bank of America small business loan FAQs

What credit bureau does Bank of America use?

Bank of America largely relies on Experian to pull borrowers’ credit reports. The bank occasionally uses Equifax and very rarely TransUnion.

What do I need to get a loan from Bank of America?

Bank of America business loan requirements vary depending on the type of loan. However, many loan options require at least two years in business, annual revenue of $100,000 or $250,000 (depending on the type of loan) and a good credit score.

What do you need to open a business checking account at Bank of America?

Depending on whether you open the account online or in person, you may require documentation proving the existence of the business, your personal ID, your company’s address and phone number, your name, and a minimum opening deposit amount.

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How we evaluated Bank of America small business loan

We considered the following factors when evaluating Bank of America small business loan:

• Affordability: We checked whether the lender offers competitive rates and fees on loans.

• Accessibility: We looked at the availability of loans nationwide.

• Variety: The more loan options, the better for customers because they can pick a product that works for their needs.

• Eligibility: We examined Bank of America’s loan requirements to see if it has strict access barriers.

• Customer satisfaction: We considered the lender’s quality of customer support.

Summary of Money’s Bank of America small business loan review

Bank of America has a variety of small business loans to choose from. Many of them come with competitive interest rates that can help you build your business credit score. However, not all of them are easy to qualify for because some require a high annual revenue and a considerable time in business. Plus, the bank takes a long time to process loans, which can impact your company’s cash flow. But if time is not a factor, then Bank of America provides solid loan options for many types of businesses.

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