Small businesses account for a huge share of a country's economy. - And that Is why the government needs to aid the growth of small businesses.
In the process of doing so, the Bank of Hawaii plays a pivotal role in mobilizing small businesses.
Bank of Hawaii offers meticulously crafted small business loans to everyone who owns a small business or wishes to start one. These loans are targeted towards the rapid growth and development of the business and are directly proportional to increased profits in most cases.
So, if you're one of those people that own a small business, wish to own one, or want to take over someone else’s small business, the Bank of Hawaii can solve all your problems.
Read on to gather all the information you need about these small business loan plans, starting from application criteria to fees and interest rates.
An Overview of Bank of Hawaii’s Loans
Established in 1987, The Bank of Hawaii has been the pillar of support for millions of people for almost 125 years. It is one of Hawaii's oldest and largest locally-owned banks, which means most stakeholders stay within the state.
By offering premium quality services, the bank has carried Its people's dreams on its back and created a network of millions of loyal customers.
Bank of Hawaii has also been repeatedly recognized and critically acclaimed for its work and labeled "one of America's safest banks." It has consistently maintained the first position in the Forbes' List of America's Best Banks. The bank is currently headed by the Chairman, President, and Chief Executive Officer - Peter S. Ho.
The bank deals with four business segments: retail banking, commercial banking, investment services, and treasury. It has rapidly expanded in recent years, establishing Its base globally in Tokyo, Seoul, and Singapore.
Let's provide you with a better insight about taking a loan safely and securely!
Types of Loans Offered by Bank of Hawaii
Choosing the right loan for yourself is highly imperative as It will determine how your business pans out in the future. However, without enough information and guidance, choosing the right plan can be confusing for customers.
Even though the Bank of Hawaii offers different types of loans to suit the needs of various kinds of businesses, It has simplified the entire process for you.
The bank is with you at every step and will help you choose the best plan for your business.
It also understands the needs of Its customers and provides tailormade solutions for the same.
Like all other banks, the Bank of Hawaii offers business loans under the Small Business Administration (SBA) loans program. SBA loans are designed to help small businesses flourish in the long term. Under these conditions, you can avail longer repayment terms and get other considerations as well.
There are two types of loans that fall under the category of SBA Loans:
SBA 7(a) Loan Program
Suppose your requirement for the loan is under $5 million - this loan can be the perfect fit for you since the upper cap of this loan plan is $5 million. However, it is important to note that this upper limit is non-negotiable, so if your business needs are more than this, you might want to consider other plans.
The maximum guarantee rate for this plan Is 85% for loans up to $150,000 and 75% for a loan amount exceeding $150,000. Additionally, the best part is that the interest is negotiable, which means you and the bank can mutually decide the interest rate that best suits you. The only prerequisite Is that It shouldn't surpass the SBA’s maximum limit.
Here are some benefits that shall help you make up your mind about this loan plan:
- It allows you to invest in upgrading and installing essential equipment.
- With the help of SBA 7(a), you not only can establish a new business, but you can buy an already established enterprise as well.
- It helps in refurbishing and modernizing the facility.
- It helps in expanding the business frontiers.
- It also helps in Refinancing your debt.
SBA Express Loans
SBA Express Loan plan is one of the quickest ways of getting a loan for your small business. Bank of Hawaii provides the SBA Express loan, which has extremely simple terms and conditions with possible loans granted in a matter of 36 hours.
It's hassle-free, quick, and involves little to no documentation.
SBA Express is the best loan option for business owners who fear the process of getting a loan due to their poor credit history.
Let’s look at a list of other types of loans that the bank offers to businesses. Note that they do not fall under the category of SBA loans.
Business Term Leasing
It is a well-suited plan for all business owners. These loans are flexible to match the needs of all businesses. The bank is there to assist you, from financing new expenditures, assisting expansion and other opportunities, to meeting goals and operating expenses.
The Bank of Hawaii has experienced professionals who are ready to walk you through the entire process. They help you understand the application process, documentation, terms and conditions, and the repayment process easily.
Under this plan, the bank offers financing for holistic business needs and offers 1-5 years for loan repayment.
People often feel that the biggest challenge between them setting up or smoothly running their business is the lack of appropriate and precise equipment. Still, the Bank of Hawaii ensures that the lack of equipment and tools Is the least of your concerns.
Under this plan, the loan offers you equipment that requires hefty investments. This plan has numerous benefits and a direct impact on the success of your small enterprise.
The bank can finance the following for your business:
- Medical and dental equipment
- Information systems
- Autos, buses, light trucks, and trailers
- Office furniture and fixtures
- Printing, construction, and industrial equipment
Additionally, the bank offers impeccable services to complement the services mentioned above, like :
- Financing at a 100% fixed-rate
- Lower periodical payments (tax lease)
- Minimal closing fees
- Customizable lease structures
Why Should You Choose Bank of Hawaii?
Understanding the nuances of borrowing from a bank and choosing the right bank are two extremely crucial steps in determining the kind of responsibility you have on your shoulders.
While choosing the 'right' bank can come off as confusing and unnecessary, consider understanding the background of the bank and breaking down Its fundamental pillars as a whole.
Out of all banking options available out there, Bank of Hawaii can prove to be your best option because of the following reasons:
- Bank of Hawaii is an SBA preferred lender.
- It ensures impeccable growth for all new small businesses or established small businesses looking to grow.
- The federal government guarantees business loans.
- It’s tailormade for small businesses that need flexible repayment conditions.
What are the Lending Criteria of the Bank?
Applying for loans can be a daunting process, especially if one is unaware of the eligibility criteria.
If you meet the eligibility criteria, the process for applying becomes extremely smooth.
Here’s a list of perquisites for you before applying for the loans offered by the Bank of Hawaii:
- The company size must meet the norms that fall under the SBA.
- The business should be functioning within the frontiers of the United States.
- The business should operate for profit.
- Requires rational equity in the owner's name for prospective investments.
- The business has used resources falling under the company, personal and financial assets only.
Further, it is imperative to note that your business will not be eligible for a loan If It Is one of the following:
- An academic school
- Any pyramid sales plans
- A non-profit organization like charitable trusts, religious organizations, or others
- Any real estate investment such as rental properties
- Any lending ventures.
- Anything that involves gambling, may It be betting, casinos, a race track, or by any other means
Bank of Hawaii’s Interest Rates, Fees, and Loan Options
Another reason why the Bank of Hawaii is one of the best options for you is because of its moderate interest rates that match the size of your pocket. Low-interest rates are ensured by the SBA guidelines that make the interest rates lower than the usual market standards.
You must read all terms and conditions carefully to understand and comprehend the loan plan's details better.
These are crucial details and might vary based on the size and amount of your loan plan. Hence, you should go through all necessary nuances beforehand.
Here are how the interest rates for the above-discussed plans look like:
SBA 7(a) Interest Rates for Loans Repaid within Seven Years
- Loan amount of 25,000 dollars or less - *Prime + 4.25%
- Between 25,001 and 50,000 dollars - *Prime + 3.25%
- Loan amount more than 50,000 dollars - *Prime + 2.25%
SBA 7(a) Interest Rates for Loans Repaid after Seven Years
- Loan amount of 25,000 dollars or less - *Prime + 4.75%
- Between 25,001 and 50,000 dollars - *Prime + 3.75%
- Loan amount more than 50,000 dollars - *Prime + 2.75%
SBA Express Loans
Usually, SBA Express Loans have much higher interest rates as they are granted with minimal documentation. However, they vary as per the amount borrowed and the repayment conditions.
For a loan of $350,000 - 7 years - prime rate ranges between + 4.5% – 6.5%.
The fee for granting a loan is something that the SBA and the lender charge - even if you pay the interest.
The fee largely depends on the loan amount and the maturity date Itself.
In addition to this, you might have to shell out a guarantee fee. That will again be based on the loan amount and the repayment terms. SBA has standardized guidelines for the guarantee fee, according to which a loan amount is classified between -
- $150,000 and $700,000 - qualified for 3% fee
- $701,000 and 1 million USD - qualified for 3.5%
- More than a million dollars - qualified for 3.75%
Note that the guidelines affirm no guarantee fee if the loan amount is cited as less than 150,000 dollars. Nevertheless, an amount above $150,000 is eligible for a 0.25% guarantee fee.
Fee for SBA Express Loan Program
Presently, there is no fee for the SBA Express Loan Program. However, a one-time guarantee fee might be applicable depending upon the size and structure of the loan. It could be around 2% to 3%.
Bank of Hawaii’s Application
The application procedure for the SBA loan program is typically the standard for all banks. Initially, you need to collect all requisite documentation.
You can crosscheck with the following list before or while applying for a small business loan at the Bank of Hawaii
- Get clarification of the suitable SBA program and complete the application form for the same
- Fill in valid personal and financial information that your original documents and certificates can support without fail
- Business certificate/permit/license
- Business financial statements as proof of your ability to repay the loan
- Annual financial report (for one year)
- Income tax returns (for the past three years)
- Guarantees of affiliations and ownership
- Profit and Loss statement with the record of the last 180 days
- Business lease (from the landlord) with all the terms and conditions
- Business history and challenges
- Past loan history (if any)
The conditions and requirements might vary if you are buying an already established small business. Check the following list and ensure you have all the documents
- A final price statement/proof (Inclusive of equipment, inventory, contract, and machines)
- Latest balance sheet
- Profit and loss statement
- Income tax returns (past two years)
- Proffered bill of sale
- Papers affirming terms and conditions of sale
Summary of Bank of Hawaii's Loan Options
Once you believe in the power of your idea and the bank's ability to grant you a loan In a hassle-free and secure manner, nobody can stop your business from flourishing.
This guide has taken you through all you need to apply for the SBA loans at the Bank of Hawaii. The first step from your end has to be choosing the perfect plan for your small business.
With patience and dedicated efforts, getting a loan for your small business is extremely accessible. It does demand a lot of time and effort for all the paperwork that it involves. However, there are effective alternatives in place if you can’t put in the required time.
But indeed, some reliable online lenders help you out with the entire process, further taking away all you had to worry about. Look up these lenders for an even smoother borrowing process since they're the best alternatives to ensure quick loan approvals.