U.S. Bank business loans review

U.S. Bank

 

If you are a current customer of U.S. Bank, you can benefit a comprehensive range of  financing products to meet a variety of needs: saving and checking accounts, personal loans, credit cards, and mortgages, among the most relevant.U.S. Bank ranks today the 5th largest bank in the nation, and exists from more than one and half century.

As a business owner, you have a variety of business loans available as well. Small business loans from U.S. Bank are accessible in all 50 States, plus District of Columbia and Virgin Islands. You can turn to U.S. Bank for getting a business loan even if you don’t have any account with the bank, but current consumers will get better conditions overall.

We are about to discuss what are your options, then you’ll make up your mind if that’s the right lender for you.

 

Overview: best for existing customers with good credit score

Business loans granted from U.S. Bank can be used for several different purposes: working capital, equipment financing, business acquisition or expansion, refinancing etc.

U.S. Bank puts at your disposal the following main types of business loans:

-Term/small business loans

-SBA loans

-Lines of credit.

 

Each solution comes with its rates, terms and borrowable amounts, so you should have a clear idea of what could be best for your business. To follow, we cover them in more details.

U.S. Bank caters to nearly all businesses, with the exception of: some financial services such as debt solving companies, virtual currency dealers, shell banks; grey-line industries such as shares, adult entertainment and internet gambling.

 

What loans does U.S. Bank offer for businesses?

 

Wherever you are in business, U.S. Bank has a proper solution to meet your needs, by offering several loan products:

  • SBA loans. The bank is a Preferred Lender from the Small Business Administration, so you’ll get any of the following loans quicker than if turning to SBA directly: 7(a) Business Loans, 7(a) and 504 Real Estate Loans. All these have higher limit amounts than the conventional loans, with caps of respectively $5M and $12.375M. SBA loans are fully amortized over long periods up to 25 years, and have specific requirements, which can be seen on the SBA portal or discussed with a U.S. Bank officer.
  • Term loans. These are the most traditional option for businesses:

-Equipment financing: you can borrow up to $500k, or you may be eligible for 125% financing when including soft costs. For this type of loan, a pre-approval process is available from U.S. Bank, and you have the chance to repay monthly, quarterly or yearly. Moreover, no down payment is required for terms of at least 24 months. You use this flexible loan if you need a lump-sum to buying the equipment items for your business.

-Quick Loans: the exclusive product of U.S. Bank, which comes with approval within 24 work hours, an easy entirely online application, and $0 origination fee. You can use a Quick Loan for business general purposes such as working capital, but also to purchase a business vehicle, or buying some securable equipment. You can borrow up to $250,000, with advantageous fixed rates, and terms up to 7 years. You must be 2+ years in business to qualify, and all the business assets are used as collateral.

 

  • Invoice factoring: this solution serves to fill the gaps in your cash flow, whereas there are unpaid invoices. It is also a quick financing option,as you may be funded the same business day. Fees which constitute the interest for these loans are not showed on the website.

 

  • Secured or unsecured lines of credit. You may prefer this upon term loans if you need to borrow multiple times to cover your ongoing expenses:

 

– Standard: with this traditional line of credit you can borrow up to $1 million, and rates are competitive, according to U.S. Bank itself. You may get interest-only payments, which gives you breath while the business grows.

-Business Equity: a loan where the equity in the property itself of the business acts as collateral. Your credit limit can be as high as $500,000, with a recurring term of 5 years as maximum; interest-only payments are possible.

-Cash Flow Manager: a loan tailored to deal with short-term but constant expenses. You can draw more and more times from a credit up to $250,000, with the chance to lock in a fixed rate once your balance is active. There is no annual fee for credits greater than $50,000, and the account is even accessible with a Visa Platinum Card.

 

  • Practice financing: if you are a dental professional, eye care or veterinary this solution is specifically designed for you, by accessing to competitive rates and flexible options. Three scenarios are covered: practice acquisition, refinancing, expansion/ relocation.

 

U.S. Bank also offers two types of commercial real estate loans: owner-occupied, and investment property. Int these cases, you have access up to $10M, fixed or variable rates and a term as long as 25 years to amortize the cost.

 

How does a U.S. Bank business loan work?

Regardless of being an existing customer or not, you’ll need to apply in person with U.S. Bank: unlike many lenders, there isn’t an online application for the traditional business loan.

The available amounts go from $5,000 to $1M, and the longest term of repayment is 84 months. The APR for a small business loan from U.S. Bank is in a very competitive range: 6.49%-17.99%, with the lowest rates for businesses that are more estabilished and with high revenue, also depending on the owner’s personal credit score. These rates are subject to market conditions, and are what we were able to find from our inquiry; APRs are not disclosed on the website.

About fees: there may a be a prepayment penalty if you repay your loan too soon, which would be unconvenient if you managed to save on interest. Expect also to pay a $75 origination fee, which is automatically deduct from your funded loan. Lastly, mind for potential late and missed payments fees. If you want to avoid surprises, you have to consult with a bank representative.

As for requirements, U.S. Bank is quite lax compared to other lenders: while there is no declared annual revenue to be eligible, your business probably qualifies with more than $100,000 in annual earnings, and a background of at least 2 years. U.S. Bank will consider borrowers with a solid personal credit score: 680 as a minimum is recommended, which in the range of a good FICO score. You can be a permanent resident or a green card holder and you still can qualify.

You’ll need to declare, in order to qualify, your identity and proof of income.

Unlike many lenders for businesses, U.S. Bank doesn’t disclose the rates applied to the loan online: to know them, you have to reach an officer by the phone, and also to finalize the loan you’ll need to go in  person at a branch of the bank near to your residence (not exceediing 100 miles away). Thus, no online application, but you will need to make an appointment.

At a glance:

Product Loan amounts Terms Min. requirements
Term loan
$10,000-$5,000,000
6 months-10 years
$120,000 revenue, 3 months in business, none for credit score
Business line of credit
$10,000-$5,000,000
6 months-10 years
$120,000 revenue, 3 months in business, none for credit score
“Hybridge SBA loan”
$50,000-$5,000,000
10-25 years
$120,000 revenue, 2 years in business, 685+ credit score
Equipment financing
$10,000-$5,000,000
1-5 years
$120,000 in revenue, or no min. revenue and no min. time in business for a 650+ credit score
Accounts receivable financing
$10,000-$5,000,000
6 months- 10 years
$40,000+ monthly receivables, 6+months in business, no minimum credit score
“Performance Advance”
Up to double the normal offer, depending on sales
-
3+months in business, no minimum credit score

We advise to double-check these numbers and your requirements, since they are likely to change, especially during this tumultuos year for the global economy.

Are U.S. Bank business loans right for you?

As with every lender, there is both outstanding and falling short. Here we gather the things you may want to consider before making your choice:

Pros:

  • Affordable rates
  • Discounts for U.S. Bank current customers
  • Plenty of business loans options
  • Flexible terms and repayments
  • Guarantee of reliability

The rate you’ll get depends on a bunch of factors, but U.S. Bank encourages potential borrowers to explore its business loans by stating competitive APRs.

The U.S. Bank’s website has also a dedicated informational section to help business owners making the most informed decision: you’ll understand how these loans work, and will be guided to the most appropriate solution for your situation.

Overall, the business loans are various, convenient and granted from a definitely trustable lender, which is crucial when five to eight figures are into play.

Cons:

  • No online application (except for Quick Loans)
  • Rates and fees are not disclosed
  • Pre-approval misses for most loans

A major drawback is the lack of an online process to get the loan, and to discover the interest rates without having to call the bank or to make a trip to a branch, which may be not be easily in the reach of your residence. This means it will take a bit more time and commitment to obtain a loan than elsewhere.

Since there isn’t a pre-qualification step, you will undergo a hard credit check, regardless if the loan request is accepted or denied.

Plus, there are mixed reviews about the customer service, with several feedbacks of unsatisfaction. Most of complaints can be found on the Better Business Bureau (BBB) portal. However, those are what you commonly may encounter when lending from big institutions like banks: expect a “cooler” approach compared to what you’d get from lenders specializing in business loans with a mostly online experience.

How do you apply to a business loan from U.S. Bank?

The bank provides a conventional path when it comes to applying for these loans: you have to call them to reserve an appointment, but this is a straightforward process, or go directly to the bank.

Quick Loans are instead available online, or you can even begin the application by the phone: provide basic information, then once approved you will submit further financial infromation and documentation. It will suffice to go into the dedicated section and follow the steps. If you are already a customer, you will login into your account as first thing.

Before getting to the bank, make sure that you exhibit the following documents:

– tax identification number (where applicable)

– proof of steady revenue

– annual net revenue and gross sales

– current debt obligations.

The processing times for the funds transfer are relatively fast, especially if your account is with U.S. Bank itself: the loan amount will be accredited on your bank account within 24-48 hours, depending on type of loan and weekday. Repayments can be made online, in-bank, through the mobile app or even by phone.


How is U.S. Bank rated?

The bank has been accredited from the Better Business Bureau and received an A+ from it: this essentially means that it follows high-end practices toward customers, and can manage very well any complaints potentially arising.

Just in case you stepped into the Trust Pilot reviews about the bank, we have to say: the mostly negative reviews are not about business loans, but refers to several different products and circumstances. Moreover the sample of consumers who are reviewing is way too small (less than 250), whereas the bank has millions of customers.

In 2020, U.S. Bank won the award as the “World’s most ethical company”, which is a guarantee that you will be respected as a consumer with specific needs, that the company will strive to meet.


Our final verdict

U.S. Bank is aimed best at business owners with a couple years of experience on their shoulders and with a good to excellent credit score. If this is your profile, you will find interesting rates and lots of options to finance barely all aspects and stages of your business; every product has some flexibility in it, and the business will certainly benefit to be in relationship with a big bank’s name. The greatest edge you’ll get if you already are a customer of the bank: you may qualify for discounts, and save time on getting your loan.

On the other hand, if you have a less than good credit score, and/or you prefer an online experience with transparent rates and fees, U.S. Bank simply wouldn’t fit to your best choice. We recommend to compare business lenders before embarking a loan of this caliber: check also our other suggested companies.