Bank of America has to offer various loans to cater to the needs of individuals and companies seeking Business loans. These Business loans are present in a wide range including secured, unsecured, etc, making sure to benefit the maximum. To learn about these loans and their interest rates and amounts consider checking out the whole article.
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What are Business Loans? How Much Credit Do We Need for them?
Business Loans are designed to incur costs associated with Businesses. It helps entrepreneurs and people who own businesses by providing them with the capital they require to run and grow their enterprises.
These loans can be of different types, and borrowers can pick one based on their needs. Some of these may include term loans, lines of credit, SBA loans (Small Business Administration Loans), etc.
Some of these can be secured as well as unsecured. Secured loans refer to those loans where the borrower has to submit some form of collateral such as jewels, property, etc to the lender. This collateral in case of borrowers’ insufficiency to pay back the owed amount will get seized by the lender.
Unsecured Loans, on the other hand, do not require any form of collateral and generally are given at high interest rates.
The minimum credit score required to finance a Business Loan can vary heavily based on the lender. Lenders like Traditional Banks and Small Business Administration generally demand a credit score of 700 or above and 640 or above respectively.
Thus, it is essential to have a credit score of at least 680 to 700 to qualify for any type of Business Loan.
Bank of America Business Loans
Bank of America is amongst the USA’s top financial institutions, it has aims that work in the favour of the general population and their customers. At the end of October 17th, 2023 the Bank recorded an outstanding earning per share of $0.90 overtaking the general estimate consensus of $0.83.
Bank of America assists entrepreneurs and business owners with various forms of Business Loans. To qualify for most forms of these, the person should have had their business for at least 2 years under current ownership.
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Types of Bank of America Business Loans and their Eligibility Criteria
Unsecured Business Loans
Unsecured Business Loans as stated above do not require any form of collateral. Bank of America offers Unsecured Business Loans at amounts ranging from $10,000 to $100,000 often enough to let businesses cover essential costs.
The credit score required for Unsecured Business Loans is usually more than 700, as it makes the creditworthiness of the borrowers look high helping lenders to trust the candidate with their ability to repay the owed amount.
To apply for Unsecured Business Loans the person has to have their business operational under the current ownership for at least 2 years. That will enable the Bank to assess the stability of the business along with its track record of operations.
The annual revenue of the Business must be over or at least $100,000 to make sure a regular cash flow is there.
Secured Loans with Lines of Credit
Borrowers can get another form of loan wherein Bank of America has set certain limits in terms of collateral, credit limits, interest rates, and repayment.
The collateral required for a secured loan line of credit can be assets for example property or other valuable assets. Because of the added collateral security provided the credit limits given in these can be more compared to unsecured loans.
The interest rates imposed in these can be more than that of those imposed in unsecured loans. However, depending on the creditworthiness of the business these amounts can still vary.
These are best in terms of usage as they provide businesses with flexibility where the funds can be drawn as per the existing need.
Its eligibility criteria include the candidate to get their business financial statements, credit score, and the value of the offering collateral reviewed. Proof of these are to be submitted in the form of supporting documents during the time of application submission.
Business Auto Loans
Business Auto Loans are specifically there for businesses wanting to refinance or buy vehicles to facilitate their business better. The minimum loan amount that can be borrowed under this loan is $10,000.
The interest rates for Business Auto Loans are fixed where the price can go as low as 6.39%. The Loan term typically ranges from 48 to 72 months, enabling borrowers with a flexible period.
The requirements for the vehicle to get financed are that it should be valued at least $10,000 with an age not exceeding 5 years and should not have been ridden more than 75,000 miles.
Applications for this type of loan will be accepted online. For more information visit the official site of Bank of America.
Equipment financing.
Similar to auto refinancing loans these loans are also there to help businesses with the cost incurred while upgrading their existing equipment or purchasing new items.
The minimum amount of loan one can take is $25,000 helping these businesses with sufficient funds to help with their potential costs.
The interest rates can vary depending on the creditworthiness of the candidate and other factors. Interest rates for this type of loan are often fixed.
When the loan is backed up by reasonable business assets then the time duration of the loan can be extended up to 5 years.
Qualification for these types of loans often requires having the business to be operational for a minimum of two years duration. Where the annual revenue of the business should also be more than $250,000.
Commercial real estate loans.
Commercial real estate loans offer businesses a set amount of no less than $25,000 to buy commercial property or real estate. These can vary in terms of interest rates based on the candidate applying and the term can be up to 10 years if the person pays a balloon payment.
Commercial real estate loans come with an origination fee of 0.75% of the loan amount. It also comes with special benefits for veterans of the U.S. armed forces where they can have a discount of 25% on the origination fee.