Cadence Bank is based in the United States and has 99 branches in the following states:
- Florida
- Alabama
- Tennessee
- Mississippi
- Texas
The main headquarters of Cadence Bank is in Atlanta, while the operations and executives headquarters is in Birmingham, Alabama. This bank is a subsidiary of Houston-based bank holding company Cadence Bank Bancorporation.
This bank offers many business loans, and among them are SBA-backed loans. We have discussed the four types of SBA loans offered by Cadence Bank below:
SBA (7a)
Benefits
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Loan Details
- Loan Amount: 5 million dollars
- Loan term: Seven years for working capital, ten years for business and equipment acquisition, and 25 years for real estate
SBA 504
Benefits
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Loan Details
- Loan Amount: No Maximum
- Loan term: Two years of the interim construction period, seven to ten years on equipment, and ten to twenty years on real estate.
SBA Express Loan Line of Credit
Benefits
- Purchase of inventory
- Improving cash cycle
- Short-term working capital
- Refinancing
Loan Details
- Loan Amount: 350,000 dollars
- Loan term: Seven years for working capital, ten years for business and equipment acquisition, and 25 years for real estate
SBA CAPLines
Benefits
- Cyclical and short-term working capital
- Can rise as your business grows
- Supports seasonal buildup of inventory and A/R
Loan Details
- Loan Amount: 5 million dollars
- Loan term: Thirteen months (option of renewable available)
Types of Loans offered by Cadence Bank
SBA (7a)
Benefits
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Loan Details
- Loan Amount: 5 million dollars
- Loan term: Seven years for working capital, ten years for business and equipment acquisition, and 25 years for real estate
SBA 504
Benefits
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Loan Details
- Loan Amount: No Maximum
- Loan term: Two years of the interim construction period, seven to ten years on equipment, and ten to twenty years on real estate.
SBA Express Loan Line of Credit
Benefits
- Purchase of inventory
- Improving cash cycle
- Short-term working capital
- Refinancing
Loan Details
- Loan Amount: 350,000 dollars
- Loan term: Seven years for working capital, ten years for business and equipment acquisition, and 25 years for real estate
SBA CAPLines
Benefits
- Cyclical and short-term working capital
- Can rise as your business grows
- Supports seasonal buildup of inventory and A/R
Loan Details
- Loan Amount: 5 million dollars
- Loan term: Thirteen months (option of renewable available)
Business Term Loans
Your business can change instantly, and on most occasions, you need funds urgently. That is why Cadence Bank is here to help you out through their business term loan:
- Vehicle purchase and business expansion
- Purchasing a facility and expanding an existing location
- Capital improvements
Business Lines of Credit
The Cadence Bank lines of credit can benefit your business and help you effectively manage your finances. The lines of credit can be a valuable resource for:
- Unexpected expenses
- Working capital needs (short-term)
- Special purchases
- Discount opportunities
- Inventory increases
Cadence Bank Corporation Interests, Fees, and Loan Options
SBA(7A)
- Interest Rate: 4.25 % for < 25,000 dollars, 3.25 % for 25,0001 to 50,000 dollars, 2.25 % for > 50,0001
- Fees: 0.25 % (short-term loan) 3.5 % (1000,000 dollars)
SBA/CDC 504 Loan Program
- Interest Rate: 2.4 % (Ten-year term), 2.35 % (25-year term), 2.41 % (also for 25-year term)
- Fees: 0.25 % (Loan servicing) 0.5 % (SBA Guarantee)
SBA Express Loan
- Interest Rate: Fixed and Variable
- Fees: 0.25 % (Loan servicing) 0.5 % (SBA Guarantee)
Business Lines of Credit
- Interest Rate: 8.5-80 % (Medium-term loans), 7-30 % (Online term loans) 7-99 % (Merchant cash advances)
- Fees: 50 dollars or 2.5 % of the total balance
SBA CAPLines
- Interest Rate: 6.75 % to 9.25 %
- Fees: 0.25 % (short-term loan) 3.5 % (1000,000 dollars)
What Lending Criteria does Cadence Bank Have?
Below is the basic lending criteria that all the banks follow:
- Credit Score
- Annual Revenue
- Business Plan
- Collateral
- Time in Business
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.
Why Does Your Credit Score Mean?
The credit score of a business is an overview of how well they've managed their credit. A three-digit score, also referred to as a FICO score, should typically fall in the 350 to 800 range. However, credit agencies have different scores, so the score your business gets might differ.
Credit Score Standard
- 760+ - EXCELLENT: This means that your company is capable of receiving lower interest rates; however, the lender will also take into account the value of the collateral and the debt-to-income ratio
- 621-629 – VERY GOOD: Your business is considered eligible for low-interest rates; again, it also depends on the debt-to-income ratio and value of the collateral.
- 621-629 – FAIR: This score means that your business might not be eligible to obtain the line of credit and will be charged high interest rates.
- 620 & Below – POOR: A business with this score will find it hard to obtain unsecured credit.
- NO CREDIT SCORE: You don’t have enough credit to have a credit score, or your credit has been largely inactive
Capacity
The capacity of the business is taken into account because it shows to the lender that you are capable of paying your dues and expenses on a new credit account. In addition, lenders will generally review your monthly income and financial obligations.
The standard for Debt-to-Income Ratio
- LESS THAN 35% - GOOD: Debt is manageable and relative to your income
- 36% to 49% - NEEDS IMPROVEMENT: Even though the business is paying the managerial debt, it still needs to lower the debt-to-income ratio.
- MORE THAN 50%: The business has extremely limited funds and might not pay back the loan.
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 flowing 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:
- Driver’s license
- Business license
- Tax returns (personal)
- Tax returns (business)
- Insurance plans of business
- Records for payroll
- Detail of owner
- Other financial obligations
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.
Bank Statements
Lenders will be interested in taking a look at the bank statements of a firm and assess if the firm is capable of paying back the loan or not. Bank statements provide a vivid insight for lenders and allow them to analyze the firm's cash management.
At a minimum, lenders will ask for bank statements of the last four to five months to have the proof they need. However, if you are applying for an SBA-backed or conventional bank loan, more bank statements than usual will be needed.
Personal and Business Tax Returns
Like the personal and business credit score, lenders will be interested in evaluating your business and personal tax returns and will ask for all the information. The lenders will judge your ability to pay the loan back and then decide whether to lend the loan or not.
Generally, lenders will ask for personal tax returns of the past two years. These documents will be important if you have a pass-through entity (partnership, sole proprietorship, or S-corp) where you report the profit and loss of your business on your tax return.
However, the tax returns of your business will also play an influential role if you have a corporation or an LLC that is taxed as a corporation. In this case, the lender will ask for the business tax returns of the last two years to verify expenses, revenue, and profit.
Purpose of the Loan
This is an obvious requirement, and a typical small business loan will be a statement that will describe your plans for using the loan. In the statement, the lender will ask you to be specific, and although lenders allow various loan purposes, the loan amount should match its purpose.
Amount of the Loan
This is also related to the purpose of the loan, and you will need to be specific about the amount of loan you need. Generally, banks have access to large amounts of capital and can easily issue six and seven figures loans. So, if a small loan is needed, banks might not be willing to provide it.
For small loans below the figure of 250,000 dollars, you might want to try out other alternatives and even check out SBA-backed loans.
Cadence Bank 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.
- Personal and Business credit scores and history
- Account statements of the business
- IRS documents, tax returns of the business, and the owner as well.
- Other important financial documents such as unpaid invoices, credit card details, and accounts receivable.
- Legal contracts (leasing, franchising, incorporation)
For more information, check out the website of Cadence Bank.
Requirements for SBA Loans
- SBA loan package application
- Business should be active for at least three years
- Submit tax returns
- A breakdown of the financial information about the business
- Detailed information regarding how the funds will be utilized
- Copy of sales, construction contracts, sales, and other transactions
- For startup business: a business plan
For more information on SBA loans, click here.
Summary of Cadence Bank Loan Options
What is unique about Cadence Bank is that it is one of few banks that are 'SBA-preferred.' The bank is a subsidiary of the Cadence Bank Operation, and it offers several types of Business loans:
- SBA (7A) Loan
- SBA Express Loan
- SBA 504 Loan
- SBA CAPLine Loan
- Business Lines of Credit
- Business Term Loan
The Cadence Bank offers highly flexible loans that will be beneficial for your business and aid your growth. Study all the information and talk to an expert before signing up for a loan.
For more information regarding loans, learn more.