Fifty-Third bank is a subsidiary of Fifth Third Bancorp and is headquartered in Cincinnati, Ohio. This bank is a bank holding company and offers many types of business-related loans as well. Small business loans are discussed below:
3. 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
- Loan Amount: 5000,000 dollars
- 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
4. 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
- Loan Amount: 125,000 to 10,000,000 dollars
- 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.
5. SBA Express Loans
This is a term loan or a line of credit and is a simple way of receiving amortized financing that the government backs.
- Total amount: 500,000 dollars
- It can be used to fulfil various business purposes
- Only for small businesses
Types of Loans offered by Fifty-Third Bank
6. SBA (7A)
The SBA (7a) loan program is the most common time of SBA loan, and only small businesses are eligible for this loan. Later in this article, we will discuss the requirements businesses need to fulfil to obtain a loan.
Purpose
- Loan Amount: 5000,000 dollars
- 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
7. 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
- Loan Amount: 125,000 to 10,000,000 dollars
- 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.
8. SBA Express Loans
This is a term loan or a line of credit and is a simple way to receive amortized financing that the government backs.
- Total amount: 500,000 dollars
- It can be used to fulfil various business purposes
- Only for small businesses
The Fifty-Third Bank has partnered with the LISC Greater Cincinnati, First Financial Bank and Greater Cincinnati to form a fund of 3.5 million dollars called the 'Cincinnati access fund'. This fund provides finances for Mirco-owned businesses and Term loans.
9. Micro Loans
- Total Loan: 100,000 dollars
- Term: Two to five years
10.Term Loans
- Total Loan: 100,000 to 350,000 dollars
- Term: Five to seven years
Fifth Third Bank Interests, Fees, and Loan Options
5. 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)
6. 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)
7. SBA Express Loan
- Interest Rates: 11.25 % (< 25,000 dollar), 10.25 % (25,0001 to 50,000 dollars), 9.25 % (50,001 – 250,000 dollars) 8.25 % (> 250,000 dollars)
- Fees: <150,000 dollars (2 % guaranteed portion of the loan) 150,000 to 700,000 (3 % guaranteed portion of the loan)
8. Micro Loans
- Interest Rates: 6 to 8 %
- Fees: Unknown
9. Term Loans
Interest Rates: 6 to 9 %
Fees: Unknown
What Lending Criteria Does Fifth Third 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.
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.
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
Fifty-Third 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)
Requirements for SBA (7a)
- 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
Requirements for SBA (504)
- Proof of ability to repay the loan and on time
- Information regarding projected cash flows of the business
- The character of the business should be really good. SBA maintains 'Statement of Personal History
- Relevant staff expertise
- A feasible business plan
For more information, please log onto the website of HSBC USA. Click here. For details regarding SBA loans, click here.
Summary of Fifty-Third Bank Loan Options
Fifth Third Bank offers the following loans:
- SBA 7(a)
- SBA 504
- SBA Express Loan
- Micro Loans
- Term Loans
Fifth Third Bank is one of those banks committed to helping small businesses buy, offering microfinance loans, term loans and SBA-backed loans. As always, before selecting a loan, discuss with the bank.