First Citizens BancShares is a withholding bank that has its headquarters in Raleigh, North Carolina. The main subsidy of First Citizens BancShares is First Citizens Bank and is one of the largest banks in the United States.
First Citizens BancShares also offers various business loans, including small business loans that are SBA-backed. Below we have discussed all the small business loans offered by the bank.
5. SBA (7A)
The SBA (7a) loan program is the most common time of SBA loan, and only small businesses are eligible for this loan.
- Loan Amount: 50,000 to 5000,000 dollars
- Term: 25 years (10 year amortization)
- Down Payment: 100 % financing available
- 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
6. 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.
- Loan Amount: 15 million dollars
- Down Payment: As low as 10 %
- Borrowing Limit: Depends on the project
- Term: 25 years for commercial real estate and 15 years for equipment
Types of Loans offered by First Citizens BancShare
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.
- Loan Amount: 50,000 to 5000,000 dollars
- Term: 25 years (10 year amortization)
- Down Payment: 100 % financing available
- 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.
- Loan Amount: 15 million dollars
- Down Payment: As low as 10 %
- Borrowing Limit: Depends on the project
- Term: 25 years for commercial real estate and 15 years for equipment
3. Business loans
Designed to meet all business-related challenges.
- Build, expand or refinance your facility
- Debt restructuring
- Equipment financing
- Leaseholder improvements
- Access to working capital
4. Business Lines of Credit
Easily access funds that can manage cash flow fluctuations
- Enables you to handle borrowing needs
- 100 % financing
- Borrow, repay and then borrow again
- Get access to funds by simply signing a check
5. Commercial Letters of Credit
Improve cash flow and expedite payments
- Letters of credit are available
- Specific details on the sale and purchase of goods
- Compliance with International trade practices
First Citizens BancShare Interests, Fees, and Loan Options
6. 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)
7. 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)
8. Business Loans
- Interest Rate: Annual percentage rate (APR)
- Fees: Tax deductible
9. Small Business Lines of Credit
- Interest Rate: 8.5-80 % (Medium-term loans), 7-30 % (Online term loans) 7-99 % (Merchant cash advances)
- Fees: None
10.Commercial Letters of Credit
- Interest Rate: Not Specified
- Fees: Not Specified
What Lending Criteria does First Citizens BancShare 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 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 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.
SBA 7 (a) Eligibility
- Manufacturing: 500 to 1500 employees
- Whole: At least 100 employees
- Services: Three years of average gross sales of 3.5 to 14.5 million dollars
- Retail: Three years of average gross sales of 5 to 20 million dollars
SBA 504 Eligibility
- One job opportunity should be retained or created for a 50,000 dollar loan
- Property must be at least 51 % business-occupied; for construction, the property should be at least 60 % business-occupied and 80 % in the next three to ten years.
First Citizens BancShare 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, check out the website of First Citizens BancShares. For information regarding SBA loans click here.
Summary of First Citizens BancShare Loan Options
We have identified five types of loans that First Citizen BancShare offers, and they are listed below:
6. SBA 7(a) Loan
7. SBA 504 Loan
8. Business Loan
9. Small Business Lines of Credit
10. Letters of Credit
Each loan that is provided by First Citizens BancShare has a specific purpose, and the rates and down payments vary. Some loans might even cut taxes, and charge a small amount of fee. SBA Loans have a fixed cut, about 0.25 or 0.50 % that they take from the loan, whereas lines of credit have no annual fees.
As always, discuss the criteria and process of application before choosing a loan. Prepare all the necessary documents, and contact the bank or the concerned authorities if there are any concerns.