American Express Small Business Loans

The American Express Company is a financial services corporation with its headquarters in the neighborhood of Battery Park City in Manhattan, New York City. American Express is also a multinational company and was founded more than a century ago in 1850.

American Express offers several business loans and aids small businesses through the Small Business Administration (SBA) loan program. Below is a thorough discussion on the SBA loan program.

11.SBA (7A)

The SBA (7a) loan program is the most common time of SBA loan, and only small businesses are eligible for this loan. 

Purpose

12.SBA/CDC 504 Loan Program

CDC (certified development company) and SBA provide the 504 loan program that can be used to finance fixed assets of a small business such as buildings and other properties. 

Purpose

However, it is unclear which particular SBA loan American Express offers, despite being affiliated with the program, which is why we have discussed all the SBA loans that most banks offer. 

Other Small Business Loans

American Express also offers a 12-month term loan with a total value of 5000 to 2 million dollars. If the bank approves the loan, the business owner might need to sign a personal guarantee

Types of Loans offered by American Express Bank 

1.    SBA (7A)

The SBA (7a) loan program is the most common time of SBA loan, and only small businesses are eligible for this loan. 

2.    SBA/CDC 504 Loan Program

CDC (certified development company) and SBA provide the 504 loan program that can be used to finance fixed assets of a small business such as buildings and other properties

3.    Other Small Business Loans

American Express also offers a 12-month term loan with a total value of 5000 to 2 million dollars. If the bank approves the loan, the business owner might need to sign a personal guarantee. American Express will disburse the loan at once.

4.    Term Loans

American Express also offers a 2-year term loan similar to the 1-year loan but offers a slightly higher starting value. The total value of the term loan is 36,000 to 2 million dollars. Again, American Express will disburse the loan at once. 

5.    Working Capital

Working capital is typically a business loan, and its purpose is to manage the business's cash flow. The value of the loan is 1000 to 750,000, and the terms are 1 to 3 months. To book this loan, you will first need to find a vendor and pay the American Express bank according to your contract; American Express will auto-debit the owed amount at the end of the term.

American Express Interests, Fees, and Loan Options

10.SBA (7A)

11.SBA/CDC 504 Loan Program

12.Small Business Loans

13.Term Loans

14.Working Capital

What Lending Criteria does American Express Have?

Below is the basic lending criteria that all the banks follow:

Credit Score

Credit is the most important component of all types of businesses, whether they are small or large. Lenders will always analyze the business's credit score and then decide whether it can pay the loan or not. Therefore, the best way to maintain a healthy credit score is to pay your dues on time.

Credit scores can also be easily obtained from several agencies such as Equifax, Dun & Bradstreet, and Experian. Another way of maintaining a positive credit score is to have a low debt-to-income ratio. Lenders will not invest in businesses that don't have a good credit score.

Annual Revenue

Another important factor that the lenders will review is the annual revenue of the business. Most lenders will only lend to those businesses that have been profitable for the last two years or more. Businesses need to make sure that all the financial statements are accurate and up to date.

Lenders will also look at specific details such as the current account (current assets divided by liabilities) and ask for copies of bank statements and transactions. However, businesses will only be eligible for a loan if their cash flow is growing.

Business Plan

A minority of lenders might not ask for a business plan, but most of them do, and businesses need to come with a clear and concise proposal. Usually, lenders require the business plan to know the purpose of the loan and discuss the business's stability. 

One of the main components of business plans is the resumes of managers and staff. However, despite having a clear business proposal, the lenders will still ask for proof of the staff's ability and relevant credentials and experience.

Collateral

Collateral is an essential requirement, and most lenders will not provide a business loan if it cannot give collateral. Collateral can be anything like equipment or property. The collateral will also decrease the risk for the lender as it will have an asset in hand, so if the company fails to pay the loan, the collateral can be paid to fund the damages.

The owner of the company needs to provide a personal guarantee and will also need to submit some essential documents:

Time in Business

Most banks are hesitant to lend loans to new companies that have been active for just a few months. Lenders cannot trust small businesses or startups that have just entered the market because they don't have a proper credit score and the cash flow is usually unstable. Banks will most likely lend to businesses that have been active for more than two years.

American Express Application

Following is the application procedure of all the banks that borrowers have to follow:

Before you apply for a loan, ensure that all your documentation is up to date. Also, organize all the documents properly, and if some essential documents are missing, contact the relevant authorities. Collect all the financial information about your business and pay all the dues as soon as possible.

For more information, please log onto the website of American Express. Click here

Requirements for SBA (7a)

Requirements for SBA (504)

Summary of American Express Loan Options

American Express is not only affiliated with the SBA loan program, but it also offers other types of large and small business loans. Below we have listed all the types of loans that American Express offers:

Despite offering SBA and other small business loans, there are few similarities, and all the loans are designed to cater to a specific need of the business.

 American Express has also invested more than 40 million dollars in small businesses earlier this year, so the bank is trying to aid vulnerable businesses during these challenging times.Please carefully read the process of application, discuss the terms and conditions with the bank and then select the loan.

For more information regarding loans, learn more