Starting or maintaining a small business is no easy task, as there is a constant need for finances. Businesses use those finances to pay off their debts, invest in inventory, purchase real estate or expand their business. However, on most occasions, businesses are short on funds and are trying to get a loan that matches their needs.
Many banks have recently stepped up their small business loan programs and are also affiliated with SBA. TD Bank, NA, offers a wide variety of SBA loans and other small business loans, and they have been discussed below.
4. SBA 7(a) Loan Program
Purpose
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Total Amount of Loan
5 million dollars
Structure of the Loan
- Borrower (10 %)
- Lender (90 %)
Down Payment
10 %
Balloon
No
Term
25 years
Amortization
25 years
Loan Benefits
- Low down payments
- Low requirements of equity
- Long-term financing
- Cash flow improvement
5. SBA 7(a) Loan Program
Purpose
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Total Amount of Loan
- First mortgage ( No maximum amount of loan)
- Second mortgage (Loan of 5 to 5.5 million dollars, depends on industry)
Structure of the Loan
- Borrower (10 %)
- Lender (TD Bank: 50 %, SBA: 40 %)
Down Payment
10 %
Balloon
No
Term
20 years
Amortization
25 years
Loan Benefits
- No balloon payments
- Low down payments
- Long-term financing
- Project assets can be used as collaterals
6. Average Conventional Loan
Purpose
Varies by Lender
Total Amount of Loan
Varies by Lender
Structure of the Loan
- Borrower (25 %)
- Lender (75 %)
Down Payment
25 %
Balloon
yes
Term
5 to 10 years
Amortization
20 years
Loan Benefits
Low-interest rates
7. SBA Express Loan
Purpose
Loan response is generally less than 48 hours, and the turnaround time is accelerated.
Total Amount of Loan
350,000
Amortization
Fully amortized for 25 years
Advanced Rate
- 100 % on equipment and machinery
- 85 % on acquisitions of other businesses
Interest Rates
Fixed and Variable
Term
25 years
Loan Benefits
To maximize the performance of the business
8. USDA Loan
Purpose
The USDA loan is designed to help rural communities develop businesses.
Total Amount of Loan
25,000,000 dollars
Amortization
Fully amortized for 30 years
Collateral
Must be able to protect the interest of the lender
Interest Rates
Fixed and Variable
Term
30 years
Loan Benefits
The loan can be used for purchasing inventory, refinancing growth, and debts.
9. Lines of Credit
Access to cash for small businesses to pay off expenses, debts, and inventory.
Features
- Variable rates are competitive
- Money is accessible online and through checks
- The credit line is reusable
- Interest-only payment option
10.Business Loan
Pay off purchases such as vehicles, inventory, and equipment over time
Features
- Flexible term of 1 to 5 years
- One-time fund disbursements
- Monthly payment is fixed (amortized over time)
- The credit line is reusable
- SBA preferred lender will review the loan application
Types of Loans offered by TD Bank, NA.
Below we have discussed all the business-related loans offered by TD Bank, NA.
1. SBA 7(a) Loan Program
Purpose
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
- Purchase of equipment
- Franchise financing
Loan Benefits
- Low down payments
- Low requirements of equity
- Long-term financing
- Cash flow improvement
2. SBA 504 Loan Program
Purpose
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Loan Benefits
- No balloon payments
- Low down payments
- Long-term financing
- Project assets can be used as collaterals
3. Average Conventional Loan
Purpose
Varies by Lender
Loan Benefits
Low-interest rates
4. SBA Express Loan
Purpose
Loan response is generally less than 48 hours, and the turnaround time is accelerated.
Loan Benefits
To maximize the performance of the business
5. USDA Loan
Purpose
The USDA loan is designed to help rural communities develop businesses.
Loan Benefits
The loan can be used for purchasing inventory, refinancing growth, and debts.
6. Lines of Credit
Access to cash for small businesses to pay off expenses, debts, and inventory.
Loan Benefits
- Variable rates are competitive
- Money is accessible online and through checks
- The credit line is reusable
- Interest-only payment option
7. Business Loan
Pay off purchases such as vehicles, inventory, and equipment over time
Loan Benefits
- Flexible term of 1 to 5 years
- One-time fund disbursements
- Monthly payment is fixed (amortized over time)
- The credit line is reusable
- SBA preferred lender will review the loan application
TD Bank, NA. Interests, Fees, and Loan Options
1. SBA 7(a) Loan Program
- Interest Rate: Fixed and Competitive
- Fees: Depends on project size, can also be refinanced
2. SBA 504 Loan Program
- Interest Rate: Plus (No Balloon)
- Fees: Depends on project size, can also be refinanced
3. Average Conventional Loan
- Interest Rate: Balloon
- Fees: Varies by the lender
4. SBA Express Loan
- Interest Rate: Fixed and variable
- Fees: None
5. USDA Loan
- Interest Rate: Fixed and variable
- Fees: None
6. Lines of Credit
- Interest Rate: Competitive and variable
- Fees: Not known
7. Business Loan
- Interest Rate: Not known
- Fees: Not known
What Lending Criteria does TD Bank, NA. Have?
The lending criteria for most loans is the same, and we have discussed it below:
- Credit: Before moving onto other aspects of your business, lenders will first review the credit history. Having a good credit score is important; however, building credit for a business is also essential, as it shows to the lender that you are eligible for the loan.
- Income and Cash flow: Lenders will review the debt-to-income ratio when judging the ability of the business to pay back the loan. The higher the cash flow and income, the better chances of the loan being approved.
- Time of the Business: Banks are always reluctant to approve loans for small businesses, as there is a great level of uncertainty. Small businesses usually lack funds and are unable to pay off their debts. A small business should be active for at least years to be considered eligible for the loan.
- Collateral: Businesses need to submit collateral to obtain the loan. Collateral can be a property, equipment, or inventory. Loans backed by collateral also have a lower interest rate.
- Industry: Lenders will assess the industry you do business in before they approve the loan. Some industries are easier to approve for the lending officer, while others may never get the green signal.
However, for SBA loans, an additional criterion needs to follow:
- 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 %.
TD Bank, NA. Application
The following is the general process of loan application that is followed:
- Pre-Approval (the process of qualifying)
- Loan application (Should be filled by the business)
- Review the package of loan application (The loan officer will review it)
- Loan Committee (Once loan is approved, the application is forwarded to a loan committee and is reviewed by an adjudicator)
- Term Sheet (will be reviewed by loan officer)
- Submission of business documents (Owners info, staff info, credit history, Business info)
- The lender will review Business lending exposure (Total balances and Maximum credit)
- Additional details will be reviewed (Financial statements, tax returns)
- The purpose of the loan? (commercial real estate, equipment financing, working capital, business expansion)
- Is the business a startup, religious organization, or NGO?
- Describe the type of loan you need (Term Loan, Lines of Credit, Healthcare practice)
- Complete information regarding your business
- Detailed information on the collateral
For more information, please log onto the website of TD Bank, NA. Click here.
Summary of TD Bank, NA. Loan Options
In this article, we have discussed many different loans offered by TD Banks, N.A. These loans offer flexibility to the businesses; as they come with flexible terms, lower down payments, and interest rates. These are the loans that we have discussed:
SBA 7(a) Loan Program
Purpose
- Purchase and refinancing of real estate
- Business Expansion
- Business or partner buyout
SBA 504 Loan Program
Purpose
- Purchase of real estate
- Construction
- Purchase of equipment
- Refinancing
Average Conventional Loan
Purpose
Varies by Lender
SBA Express Loan
Purpose
Loan response is generally less than 48 hours, and the turnaround time is accelerated.
USDA Loan
Purpose
The USDA loan is designed to help rural communities develop businesses.
Lines of Credit
Purpose
Access to cash for small businesses to pay off expenses, debts, and inventory.
Business Loan
Pay off purchases such as vehicles, inventory, and equipment over time.
Each of these loans come with several benefits, and are designed for a specific need. While most banks, especially the big ones, are reluctant to lend loans to small businesses, TD Bank, NA, is willing to take that initiative. However, before you sign up for the loan, please contact the bank and gather more information.
The bank's application process is quite lengthy, and it will require all the necessary details of your business. So make sure that you prepare all the documents properly. If any documents are missing, please contact the concerned authority or notify the bank or lender.