Small business loans are the biggest support you can have for your small business administration loans. Do you plan to set up a small business? Then Umpqua Holdings Corporation has the right set of small business loans to cater to your business needs.
Umpqua Holdings Corporation has been in the banking field for a long time. Its team is trained to extend its best efforts and business solutions through its terms of loans. Whether you want to start a business, own a home, or buy a car, the bank has all sorted for you. Let’s learn better about how do they do so.
An Overview of Umpqua Holdings Corporation’s Loans
Umpqua Holdings Corporation works as an individual when it comes to empathizing with its clients. They are individuals before being financial experts. The team takes this approach to understand your needs at business better and help you out accordingly.
The bank, therefore, offers you access to several digital tools and features of the bank to know you better before moving on with your banking needs. Umpqua’s community spirit is reflected through every associate and the center of their actions.
Umpqua Holdings Corporation started in Oregon along the South Umpqua River. Generations of hard work earned them the position they’re at today. They offer different types of loans to fulfill your requirements. And small business administration loans are one among them.
The small business loans by Umpqua are aimed at the best of your business interest with great services and flexible terms of loans. You’ll learn more about the same here.
Types of Loans Offered by Umpqua Holdings Corporation
The various types of loans offered at Umpqua Holdings Corporation are government-backed small business administration loans. That enables you with lower down-payment options and longer repayment terms. Additionally, the bank provides expert teams with local decisions to make and quick turnarounds.
All the loans have fixed or variable interest rates. Some loans need are not inclusive of any additional fees. Also, the loan terms differ among the different types. You may get a slash on the interest rates based on certain factors, such as autopay.
The bankers at Umpqua Holdings Corporation stay updated with the latest loan option and the best deals for small businesses. As such, the bank offers you three types of small business administration loans to start your new business. Or expand an existing one.
- SBA 7(a) is an SBA primary program.
- These loans allow you to borrow within a range of $250,001 and $5 million.
- The terms of this loan vary from seven to 25 years.
- SBA 504 loan types are for real estate or equipment investments.
- The government has guaranteed this loan to borrowers to meet their contribution needs.
- U.S. Department of Agriculture allows you to borrow loans for small business purposes.
- These government-guaranteed loans are meant for your rural business needs.
What Lending Criteria Does the Bank Have?
The eligibility or lending criteria of Umpqua Holdings Corporation are similar to the other conventional banks. Once you are adept with the bank’s requirements to apply for small business loans at their authority, you are sure to get your loan approved in no time. However, there are three particulars to fulfill at any cost if you want your loan to process easily.
High Credit Scores
High credit scores ensure your reliability as a borrower. In simple words, it is a certificate showing how eligible you are to repay the borrowed money. However, several factors affect this credit score. It can be your average age of accounts, different credit accounts, late payments, debt obligations, etc.
Additionally, SBA loans are regarded as high-standard loans for having spent tax dollars to guarantee loans. However, you get a benefit of lower loan rates if your credit score is higher than 700. Keeping your individual and business credit scores in check to stay adept with your SBA loan rates would be best.
Strong Business Financials
A strong business finance record will give you the edge of getting a small business loan from Umpqua Holdings Corporation. That helps you achieve profitability towards achieving qualification for SBA financing. However, your business might be lagging in producing enough revenue yet.
In such conditions, you may still be able to qualify for an SBA loan with a proper business plan. All small business owners have better chances of getting loans approved with a right-framed business plan. It is even more effective for new small businesses in the market.
Without proper records of finances from your business revenue statements, the bank has to run over a check through your accounts. It is time-consuming and most cases, a loss on your part. Instead, it would be best to include revenue and profit projections as well.
Collateral is not necessary for the SBA loan program. However, most banks require collateral to protect their interests. Additionally, you benefit from eligibility with lower SBA loan rates and longer terms when you offer collateral.
These could be business assets, such as inventory, machinery, or equipment. Collateral can also be a personal asset like a car or a private bank account. The more collateral you offer, the less is the risk for the bank. That will assure them secure relations with their borrowers, and they’ll provide you with a low-interest SBA loan.
Umpqua Holdings Corporation’s Interest Rates, Fees, and Loan Options
The interest rates, fees, and loan options, although similar to other banks, they differ according to different loan types and terms. Let’s find out the difference.
SBA 7(a) Loan Interest Rates
The SBA loans come with maximum rates of interest. As such, the lenders cannot charge more than the top rates. The U.S. prime rate influences this maximum rate of interest. The prime rate depends on the market rate of the U.S. economy. Banks use this rate as the benchmark for commercial and consumer loans.
- The prime rate for SBA 7(a) loans is 3.25%.
- It means that the interest rate for SBA 7(a) loans ranges between 6-8%.
- But if you have excellent credit scores, you may be charged less.
- Nevertheless, the lenders cannot charge you more than the designated rate.
- SBA loans can have either fixed or variable rates of interest.
- Fixed interest rates would mean fixed monthly payments throughout the term of the loan.
- Lenders usually charge fixed rates for large business loans.
- Variable rates of interest can fluctuate depending on the performance of the U.S. economy.
- Loan amounts below $50,000 are usually charged variable rates of interest.
Additional fees can increase the annual percentage rate and the total annual cost. Additionally, be mindful that the guarantee fee is based on the loan terms and the amount borrowed. Although the fee is initiated on the lender’s part, it is eventually passed on to the borrower.
- An amount of 2% is charged as the fee for loans below $150,000.
- For amounts more than $1 million, the fees charged are 3.75% of the loan amount.
- Any term loan fewer than 12 months may charge you lower fees.
- The additional fees may also be inclusive of application, credit check, appraisal, packaging, etc.
Although the loan terms are based on several factors like your ability to repay, the loan’s purpose, and the financial assets, they have maximum timelines.
- Seven years for working capital
- 10 years for equipment
- 25 years for real estate
SBA 504 Loan Rates
SBA 504 loans are made of two parts, one from the bank and the other from a non-profit certified development corporation. These sections of the loan are subject to SBA rules. These rules dominate the current rate for five-year and 10-year US Treasury Bonds. The rates of SBA 504 loans are declared.
- 10-Year SBA Loan Term: five-year Treasury rate + 2.23%
- 20-Year and 25-Year SBA Loan Term: 10-year Treasury rate + 2.36% and 2.39%, respectively
SBA 504 loans have fees charged for various aspects.
- Guarantee fee – 0.5% ongoing
- Third-party lender participation fee – 0.5% one-time
- Central servicing agent fee – No more than 0.1 % ongoing
- CDC servicing fee – 0.625% ongoing
- Annual SBA fixed service fee – Currently 0.3205% ongoing
The loan terms and the interest rates for SBA 504 loans go hand in hand. You can pay this financing over a term of 10-25 years on a monthly schedule.
USDA Interest Rates
USDA commercial loans or small business loans are similar to SBA 7(a) loans. Therefore, the loan rates are also similar.
- Currently, the interest rate for USDA loans varies from 5.5% to 11.25%.
- The interest rates can be fixed, variable, or a combination of both.
- A variable or a combination interest rate cannot be adjusted twice every quarter or four times yearly.
USDA fees are of several types. However, they may change depending on certain factors.
- Bank/lender fees: Banks may charge origination fees, appraisal fees, prepayment penalties, and other fees for the loan
- Annual renewal fee: 0.5% of the outstanding principal
- Initial guarantee fee: 3% of the guaranteed amount of the loan
Umpqua Holdings Corporation’s Application
The application process of Umpqua Holdings Corporation is simple and similar to other banks. You need to open up their official website and follow the instruction to fill in their application form.
- Gather your application materials.
- Submit information like business name, address, tax ID, etc.
- Collect the financial statements of your business and yours, such as profit and loss statements, annual revenue, etc.
- Gather information about the business owners along with the percentage of ownership.
- Review your small-business loan application for all the essentials before moving ahead with it.
- Ensure that you have catered to all the requirements of the bank’s instructions to get your loan approved easily.
Summary of Umpqua Holdings Corporation’s Loan Options
Now, you have a clear idea about the different loan options for small businesses. You can stick with Umpqua Holdings Corporation Small Business Loans, or you can stay updated with the ongoing rates in the market. As such, it would be best to review other loan options to get the best small business loan deals for your needs.