MUFG Union Bank Small Business Loans
An Overview of MUFG Union Bank Small Business Loans
MUFC Union Bank, or Union Bank for short, is a preferred SBA lender that specializes in expedited small business loans. This bank ranks 3rd on the list of active lenders in the SBA category and is one of the best in California, catering to the needs of small businesses and start-ups. If you want to grow your business but you don't have the financial capacity to do so, Union Bank is a very good financier to approach for a loan.
Their SBA lending program is easy to pay for and is highly recommended for business owners who want loans with longer tenures but lower repayments. Furthermore, borrowers who qualify for the loan and get it are at liberty to spend it as they wish as long as it improves the capacity of their businesses. The absence of spending restrictions is one of the reasons why business owners find their offers very attractive.
Types of Loans offered by MUFG Union Bank
There are three loan options available to borrowers under Union Bank's SBA loan option. We review them below.
SBA 504 Loan
The 504 loan program is meant for the purchase of work equipment. If you run a production or service business that requires certain tools or equipment to serve your clients, this is the loan for you. You can also use the proceeds from the loan to fund the purchase of capital assets to boost business productivity. However, to qualify for this loan, there are certain eligibility requirements you must meet.
- The venture must be for-profit
- You must show a net profit of $5 million after taxes
- The net worth of the business must be worth less than $15 million
The maximum amount a qualified borrower is eligible for is $20 million.
The second loan option offered by MUFG Union Bank is the SBA 7(a) small business loan. Borrowers can avail a minimum of $250,000 and up to $5 million. If you own a manufacturing business, the maximum loan cap is $5.5 million. Just like the 504 loan requirement, only businesses with a net worth of not more than $15 million can apply for this loan, and you need to provide proof of a net profit of $5 million after-tax. This loan is only issued to business ventures that make a profit, not non-profit organizations. Furthermore, you can use it for multiple purposes like business expansion or acquisition, working capital, debt refinancing, or equipment purchases.
Small Business Line of Credit
A small business line of credit is another loan option subject to the approval of Union Bank like the other two cited above. To avail of this loan, you must provide an asset to be used as collateral. The asset must be situated in California, Washington, or Oregon State. Assets outside of these three states are not accepted. However, you should know that this credit line is only open to existing customers of the bank who hold their credit cards. How much you receive as a credit card extension will be negotiated between you and the banker.
What Lending Criteria does the Bank Have?
Only applicants who qualify for any of the loan options will be successful with their applications. In addition, only applicants who provide suitable collateral in California, Oregon, and Arizona, or Washington will be issued loans. It is also important to note that there are other restrictions, fees, and selection criteria you must meet to qualify.
When discussing the different loan options of MUFG Union Bank in the previous paragraph, we highlighted the criteria for each loan option. In this section, we will provide further eligibility requirements in line with the Small Business Loan Program backed by the Federal government.
Note that these requirements are subject to change but are valid at the time of writing this review. Therefore, before you apply for any of the loans in person, kindly visit the bank's website or contact an official to learn more about the current requirements as well as their terms and conditions.
The SBA Loan Program does not expressly specify in general terms who is qualified and who is not. This is why many interested borrowers are never sure of their status until they apply for it. However, there are universal principles that guide lenders in deciding who to give loans to. In line with SBA requirements, these are the general principles guiding MUFG Union Bank when processing the loan applications of applicants.
- The business must be a profit-making business. Businesses running at repeated losses or non-profit organizations should not apply
- The business must be defined as an SBA Business and operate on a small scale
- Assets and business operations must be limited to the United States
- The owner(s) must have a reasonable percentage of investment equity
- The owners must have invested personal funds into the business before applying for the loan
- The purpose for which the loan is required must be spelled out in the loan application
- The business owner must show commitment to using the loan for the business only
- The business must not have any unmet tax obligations to the federal government.
Besides the above, MUFG Union Bank will also scrutinize the business's past activities and historical records before deciding whether to approve the application. Some of the eligibility criteria they will review include the following.
- If the actions of the owners have caused the government to incur a loss, the application will be rejected
- If about a 20% stake of the business is owned by someone who owns a different business that caused the government to incur a loss, the application will be rejected.
- A business with a 20% stake owned by a felon or someone indicted for a crime will not qualify for an SBA loan.
Other considerations you should know of are listed before.
If you own a franchise license, you can apply for any of Union Bank's small business loans unless the franchise has the full right over the business to the extent that the borrower is nothing more than an employee of the company. Additionally, only franchise license holders with profit rights may apply for the loan.
Businesses in the fishing industry looking to purchase a new vessel or repair an existing one may apply for the loan, but they must first seek funding from the National Marine Fisheries Service before applying to MUFG Union Bank.
Recreational business owners are eligible for this loan if their facilities are for-profit and open to the general public.
Farms and Agro-Allied Ventures
Agro businesses may also apply, but only after exploring funding options offered by the Farm Service Agency Program. Applicants with an existing partnership with the FSA must show that they have utilized available funding sources.
Private medical service providers with facilities across the medical service value chain may apply, but they must show evidence that they are licensed by relevant government agencies. They must also show proof of an existing and fully functional practice facility for their patients.
Legal Aliens currently residing in the United States are eligible for the loan but must show proof of their legal status.
NB: These criteria are constantly changing, so ensure that you ask your banker to furnish you with an updated list of eligibility requirements before you apply to avoid application rejection.
MUFG Union Bank's Interest Rates, Fees, and Loan Options
MUFG Union Bank does not publish its interest rates and application fees online, but you will have to communicate with an agent to find out more. During the verbal interview over the phone, the interest rates and application fees will be made known to you. However, to give yourself a fair idea of what the interest rate might be, search for the current interest rate. The rate at which MUFG will offer you the loan will not be very different from the current industry rate.
MUFG Union Bank's Application
The application process is mostly done over the phone or in-person with a bank agent. To kick start the process, you can place a call to 1-833-UB-SMBIZ. Or better still, visit an MUFG Union Bank branch near you and request an application form. For loan requests above $1 million, you will have to visit the bank in person. As for the documents required to complete the application, they vary, and the bank does not publish them online.
However, if you visit any of their branches or place a call to any of their agents, you will be furnished with all the documentary requirements you need to add to your application form before submission.
Summary of MUFG Union Bank's Loan Options
MUFG Union Bank small business loan is an ideal loan for small businesses looking to expand operations or to settle pressing financial commitments. The application approval process takes less than 3 working days, so you should get feedback from the bank as quickly as possible. In addition, the loan tenure attached to the loans is longer than conventional loans, and they attract low-interest rates too. These are some of the reasons why many businesses utilize the funding opportunities they offer.