First Horizontal National corporation is a bank holding company that is headquartered in Memphis, Tennessee. This bank is more commonly known as 'First Horizon,' is the largest bank in Tennessee and the 4th largest in the Southeast region of the country.
First Horizontal National Corporation offers various small business loans such as SBA loans (SBA (7a), SBA 504, SBA Express Loan), and below, we have discussed them in detail.
Types of Loans offered by First Horizontal National Corporation Bank
5. SBA (7a)
Benefits
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Loan Details
- Loan Amount: 350,000 to 5 million dollars
- Loan term: Ten years
6. SBA 504
Benefits
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Loan Details
- Loan Amount: 13 million dollars
- Loan term: Ten years
7. SBA Express Loan Line of Credit
Benefits
- Purchase of inventory
- Improving cash cycle
- Short-term working capital
- Refinancing
Loan Details
- Working capital (revolving) finance available of 350,000
- Loan term: Ten years (5 years for revolving cash requirements, the balance turned out for remaining five years)
Types of Loans offered by First Horizontal National Corporation
1. SBA (7a)
Benefits
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Loan Details
- Loan Amount: 350,000 to 5 million dollars
- Loan term: Ten years
2. SBA 504
Benefits
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Loan Details
- Loan Amount: 13 million dollars
- Loan term: Ten years
3. SBA Express Loan Line of Credit
Benefits
- Purchase of inventory
- Improving cash cycle
- Short-term working capital
- Refinancing
Loan Details
- Working capital (revolving) finance available of 350,000
- Loan term: Ten years (5 years for revolving cash requirements, the balance turned out for remaining five years)
4. Business Lines of Credit
Benefits
- Many cardholders with approved spending limit
- The annual summary statement is issued at the end of the year with all expenses of the previous year.
- Option for Overdraft protection offered on linked account
Loan Details
- Line of credit (unsecured) amount of 25,000 to 100,000 dollars
- Funds can be accessed through card, check, or BizEssentials Line Visa
- Worldwide acceptance through BizEssentials Line Visa
- Minimum payment: 50 dollars of 2.5 % of the total balance
5. Bizessentials Term Loan
Benefits
- Tax savings
- Several payment options
- The loan is fully amortized and secured
Loan Details
- Loan (secured) amount of 25,000 to 3000,000 dollars
- Loan (Unsecured) amount of 25,000 to 500,000 dollars
- Interest rates are variable and fixed
- Terms are flexible (up to 84 months, but depends on collateral)
6. Bizzessentials Term Real Estate Loan
Benefits
- Collateral can be commercial property or residence (owner-owned)
- Straightforward application process (details below)
- The loan is fully amortized and secured
Loan Details
- Minimum loan amount of 100,000 dollars
- Interest rates are variable and fixed
- Terms are flexible
- Interest rates are flexible
First Horizontal National Corporation 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. SBA Express Loan Line of Credit
- Interest Rate: Fixed and Variable
- Fees: 0.25 % (Loan servicing) 0.5 % (SBA Guarantee)
9. 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
10.Bizzessential Term Loan
- Interest Rate: Fixed and Variable
- Fees: Unknown
11.Bizzessential Term Real Estate Loan
- Interest Rate: Flexible
- Fees: Unknown
What Lending Criteria does First Horizontal National Corporation 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 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.
However, for SBA loans, an additional criterion needs to be followed:
- 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 %.
Comerica 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, please log onto the website of First Horizontal National Corporation. Click here.
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
Summary of First Horizontal National Corporation Loan Options
First Horizon National Corporation offers a wide variety of loans and three types of SBA loans. Below is a shortlist of all the business loans offered by First Horizon:
- SBA (7a) loan
- SBA (504) loan
- SBA (Express) Line of Credit
- Business Line of Credit
- Bizzessential Term Loan
- Bizzessential Term Real Estate Loan
We have also discussed all the necessary information regarding interest rates, fees, and terms. However, it is important to study all the details thoroughly, assess your needs, or hire an expert to do so. Before applying for a loan, discuss with the bank. Also, make sure that you have the appropriate collateral, such as real estate, business assets, equipment, and inventory.