CIBC Bank USA is a commercial bank that is headquartered in Chicago, Illinois. It was founded in 1989 and was initially known as ‘PrivateBancorp Inc.’ However, in 2017 it was acquired by CIBC, a Toronto-based bank, for 5 million US dollars.
The CIBC bank provides SBA and other business loans, and we have discussed them below.
CIBC Bank USA has not specified the type of SBA loans they provide and their amount, although they have provided their benefits. Below we have discussed the two most common SBA loans that banks provide.
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.
Purpose
- Provide long-term and short-term working capital for small businesses
- Funds are revolving and are based on the value of the inventory of the business
- Loans can be used to purchase equipment, supplies, and material
- Real estate and other properties can also be purchased with the help of this loan
- The loan can be used for construction
- The loan can be used to refinance the debt or acquire a business
- The loan can be used for business expansion
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.
Purpose
- The loan can be used for business expansions.
- More fixed assets can also be purchased with the help of the loan
- The loan enables the business to upgrade its facilities as well.
CIBC SBA Loan
Features
- Extended Amortization: 25 years
- Equipment and Refinancing: 10 loans
- Working Capital: Seven to ten years
Benefits
SBA banking clients will receive the following:
- Relationship manager
- Portfolio manager
- Client service specialist
- Treasury management advisor
Types of Loans offered by CIBC Bank USA
14.SBA 504 Loan Program
- The loan can be used for business expansions.
- More fixed assets can also be purchased with the help of the loan
- The loan enables the business to upgrade its facilities as well.
15.SBA 7(a) Loan Program
- Provide long-term and short-term working capital for small businesses
- Funds are revolving and are based on the value of the inventory of the business
- Loans can be used to purchase equipment, supplies, and material
- Real estate and other properties can also be purchased with the help of this loan
- The loan can be used for construction
- The loan can be used to refinance the debt or acquire a business
- The loan can be used for business expansion
16.Commercial Real Estate
- CIBC offers a dynamic platform for investors and real estate professionals
- CIBC prioritizes client-focused relationships
- CIBC lenders have extensive market experience
- Financing is customizable and tailored to suit the requirements of the business.
Lending solutions
- Subscriptions Lines of Credit
- Construction financing
- Property-level bridge financing
- Homebuilder financing
- Structured debt
17.Commercial Lending
- CIBC Commercial lending financial solutions are made according to the business needs
- Professionals at CIBC understand every aspect of the business
- The CIBC team thoroughly understands all the challenges faced by businesses
18.Revolving Lines of Credit
- Flexible access to cash
- It can be used to purchase inventory, equipment and manage cashflows
- Gives the business flexibility
- Easy to access funds
19.Asset-based lending
- Direct lines of credit of 7.5 to 50 million dollars
- Since 2009, the CIBC asset-based lending team has lent more than 31 billion dollars across 31 US states.
- Companies can secure financing for the following:
- Turnaround
- Recapitalization
- Mergers
- Acquisitions
- Balance sheet restructuring
- Inconsistent earnings history
- Capital expenditures
CIBC Bank USA Interests, Fees, and Loan Options
Apart from SBA loans and revolving lines of credit, information regarding fees and interest rates of other loans has not been provided by CIBC Bank USA.
1. SBA 504 Loan Program
- Interest rates: Long-term and Fixed
- Fees: 0.25 to 0.5 %
2. SBA 7(a) Loan Program
- Interest rates: Variable and fixed
- Fees: 0.25 to 0.5 %
3. Commercial Real Estate
- Interest Rate: Not Specified
- Fees: Not Specified
4. Commercial Lending
- Interest Rate: Not Specified
- Fees: Not Specified
5. Revolving Lines of Credit
- Interest Rate: 10 to 29 % (depends on credit history)
- Fees: None
6. Term Loans
- Interest Rate: Not Specified
- Fees: Not Specified
7. Asset-based Lending
- Interest Rate: Not Specified
- Fees: Not Specified
What Lending Criteria does CIBC Bank USA 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.
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:
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.
CIBC Bank USA 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)
However, for SBA loans, an additional criterion needs to follow:
Owners who own 20 % of their business are required to guarantee unconditionally. However, if an owner has a controlling interest will be required to submit a guarantee.
Startup businesses will require additional equity of 5 %. Special-purpose also requires a 5 % equity. Thus, the total equity requirement is 10 %.
Requirements for SBA (7a)
Businesses should operate for 'For-Profit.'
Business should be active only in the United States
Significant invested equity
Can use alternate financial resources (personal assets)
Should be able to demonstrate loan need
Funds should only be used for business purposes
Requirements for SBA (504)
Businesses should operate for 'For-Profit.'
Business should be active only in the United States
Has a net worth of fewer than 15 million dollars and more than 5 million dollars
Be an eligible business. Check here
No other sources of finances should be used other than the 504 loan
Funds should only be used for business purposes
For more information, access the website of CIBC Bank USA. Click here
Summary of CIBC Bank USA Loan Options
CIBC Bank USA is a commercial bank and has its headquarters in Chicago. This bank has a diversified line of loans and offers the option of customization for the business. CIBC Bank USA offers loans that match the needs of the business. In addition to the loans, CIBC Bank USA has a team of experts and specialists that are always ready to help out the borrowers.
Below we have listed the loans offered by CIBC Bank USA:
- SBA Loans
- Commercial Real Estate
- Commercial Lending
- Revolving Lines of Credit
- Term Loans
- Asset-based Lending
For more information regarding loans, learn more.