Are you planning on starting a small business but facing financial issues? Well, not anymore. MidFirst Bank has numerous loan options for small businesses that can help you run your business smoothly.
Additionally, you can use these loans to expand your workforce, meet payroll needs, or invest in advanced equipment. Be it getting financial support for starting a franchise, availing license, or obtaining cash to pay off the uncompensated invoices.
So, yes, it is safe to say that small business loans boost the business to flourish, thrive, and even surpass competitors. You have to select the loan type most suitable for your business needs.
This article will walk you through small business financing. The guide includes all the necessary topics that you might have queries about. To find out more, keep reading!
An Overview of MidFirst Bank Loans
MidFirst Bank is the largest privately-held bank in the United States. The bank has assets worth $31.5 billion and rules the banking industry with its rather remarkable presence. The bank is a well-established commercial and real estate lender.
Furthermore, MidFirst Bank remains unaffected by the competitors and delivers its customers the most distinguished quality service.
MidFirst has numerous accolades in its name, including the recognition in the 2018 U.S Retail Banking Satisfaction Study. Here, MidFirst Bank surpassed all other competitors and obtained an index score of 877, the highest in the nation.
The bank serves around 900,000 clients nationwide and administers various services, including personal, commercial, trust, private banking, and mortgage banking products and services. Mortgage loans remain their primary and most popular service.
With around 70 branches across Oklahoma and Arizona, MidFirst Bank is a familiar name for SBA. MidFirst incorporates the SBA 7(a), 504, and SBA Express.
Types of Loans Offered by MidFirst Bank
Picking the right and the most suitable loan is essential because it is the right loan that saves your business and provides the best possible financial support.
If you are just beginning with your small business and all the decision-making bothers you, just relax because MidFirst bank assists the customers throughout the process. Furthermore, the bank helps in the selection based on your requirements.
MidFirst Bank offers three types of loans and two SBA programs, and they are:
It is the most common type of loan. The meaning is simple: you keep something in your possession as security or collateral. The bank has the right to seize/acquire the stake if and when you fail to repay the loan.
Furthermore, if the asset fails to meet the debt amount, the bank also has the right to solicit the difference, even if it means acquiring the client's property. Some examples of secured loans are:
- Home equity loan
- Home equity line of credit
- Secure credit card (financed by a savings account)
- Mortgage (home loan)
- Car loan
- Boat, motorcycle, or another recreational vehicle loan
As the name suggests, there is no security involved, so the bank cannot seize anything to obtain the money. However, the interest for unsecured loans is much higher. Here are the examples of unsecured loans:
- Credit cards
- Student loans
- Personal loans/lines of credit
Open End/Closed-End Loans
Close-end loans are the loans taken for a specified time and repayment schedule. Examples include vehicle and home loans. On the other hand, you can borrow any time without any fixed credit limit with Open-end loans.
There is no repayment schedule, which allows you to pay back as per your convenience or minimum payment amount. Examples include credit cards.
Small Business Administration (SBA) Loans
Small Business Administration (SBA) loans were particularly created to help small business owners set up their businesses. Midfirst Bank partners up with the businesses to pick the best suitable loan to meet the company's needs. Some perks of SBA are:
- Provides working capital
- Helps modernize the setting and install advanced equipment.
- Business procurement
- Enhance cash flow with more prolonged terms
- Lowered mortgage service obligations
SBA Loan Programs
There are three loan programs:
- SBA 7(a): The most popularly favored choice for small business augmentation. Be it purchasing equipment or property or just covering payrolls, this loan is very suitable. But, the maximum loan amount is capped at 5 million dollars.
- SBA 504: This loan is a cut-out for fixed asset acquisitions like real estate. So, if your business requires prolonged benefits, SBA 504 is for you. Furthermore, this SBA loan also allows you to have fixed-rate financing with extremely low payments.
- SBA Express: SBA Express is considered ideal for when you do not have the best credit history. The terms and conditions are pretty lenient, providing a chance to business owners who cannot meet the criteria otherwise.
What Lending Criteria Does the Bank Have?
A good understanding of the criteria can really help you identify if your business meets the eligibility requirements. If yes, then you can approach the bank and select one of their loan programs.
The below-mentioned requirements are what the MidFirst Bank seeks as a lender, read on:
- The business size must meet the standards that fall under the SBA.
- The business must function within the boundaries of the United States.
- Operates for profit
- Rational equity in the owner's name
- Has used business, personal and financial assets.
Your business will not be eligible for the loan if it is any of the following:
- Academic school
- Pyramid sales plans
- Non-profit organizations such as charitable trusts, religious organizations, or others
- Real estate investment such as rental premises
- Lending ventures
- Gambling activities like casinos
Apart from this, MidFirst Bank follows the criteria of the five Cs to identify their clients. The clients must meet the 5Cs to qualify for loans.
MidFirst Bank's Interest Rates, Fees, and Loan Options
SBA has ruled out certain guidelines for the loan grants to small businesses. These guides ensure that the interest and fees are lower than what other loans offer.
Furthermore, it is wise to comprehend a detailed insight into the interest rates and fees. Besides, it is always better to read the terms before committing to them.
Here are all the interest rates, according to the time and limits. Also, remember that the interest rate varies according to size and term.
SBA 504 Program Interest Rates
- For a loan amount of 5.5 million dollars - 10 years - around 2.231%
- Up to 5.5 million dollars - for 20 to 25 years - around 2.364% to 2.399%
SBA 7(a) Program Interest Rates
- Under 25,000 dollars - over 7 years period- prime rate +4.75%
- Between 25,000 to 50,000 dollars - over 7 years - prime rate +3.75%
- Over 50,000 dollars - over 7 years - prime rate + 2.75%
- Under 25,000 - under 7 years - prime rate + 4.25%
- Between 25,000 and 50,000 dollars - under 7 years - prime rate + 3.25%
- Over 50,000 dollars - under 7 years - prime rate + 2.25%
SBA Express Interest Rates
- For a loan of $350,000 - 7 years - prime rate + 4.5% – 6.5%
The fees are entirely based on the maturity date and the loan amount. Sometimes banks meet the guarantee fee, while you might have to cover the payments the other times. The SBA has ruled out a systematic way to address the charging fees issue, according to which a loan amount between
- $150,000 and $700,000 is eligible for 3% fee
- $701,000 and 1 million USD is eligible for 3.5%
- More than a million dollars is eligible for 3.75%
Furthermore, the guidelines state no guarantee fee if the loan amount cited is less than 150,000 dollars. However, an amount above $150,000 is eligible for a 0.25% guarantee fee.
Fee for SBA 504 Loan Program
The SBA 504 is based on the following:
- Minimum loan amount - $50,000
- Maximum loan amount - $5.5 million
- Possible terms - 10 / 20 years
- A constant fee percentage
Fee for SBA Express Loan Program
There are currently no fees for the SBA Express Loan Program, except for the one-time guarantee fee, which depends on the size and terms of the loan. It could be around 2%-3%.
MidFirst Bank's Application
The application process for the SBA loan program remains pretty similar in all the banks. You can initiate your preparation by collecting the necessary documents.
Here are the things you should keep in mind before or while applying for a small business loan at MidFirst Bank.
- Get clarification of the suitable SBA program and fill the application form for the same.
- Fill in valid personal and financial information that your official documents can support.
- Business certificate/permit/license.
- Business financial statements as proof of your ability to repay the loan
- Warranties of affiliations and ownership
- Profit and Loss statement with the record of last 180 days
- Annual financial report (for one year)
- Income tax returns (past three years)
- Business lease (from the landlord) with all the terms and conditions.
- Business history and challenges
- Past loans history (if any)
The application process might vary if you are not establishing but buying an already established small business instead.
- A final price (Inclusive of equipment, inventory, contract, and machines)
- Latest balance sheet
- Profit and loss statement
- Income tax returns (past two years)
- Offered bill of sale
- Documents stating terms and conditions of sale
Summary of MidFirst Bank Loan Options
Your small business can flourish just like anybody else's; all you need is the appropriate SBA loan that fits your business. You can choose any of the loans mentioned above. All three of them are versatile and accommodating.
However, you should have a decent amount of time, if not ample, because getting loans approved is no piece of cake. It requires loads of paperwork, documents, and patience, but it will all be worth it!
And lastly, if you are running tight on time and cannot wait for days to get your loan approved, you can opt for alternative ways. Meaning you can rely on online lenders, and they are just the right option to meet your urgent financial requirements.