SBA Loans are long-term loans that the government partially guarantees. The Small Business Association is a federal agency and is helping small businesses grow. The SBA has partners nationwide that lend the loan to small businesses. Unlike other loans, the SBA loan works a little differently as its terms are favorable.
The U.S. Bancorp is a preferred partner and lender of SBA, and the bank has a quick and streamlined lending process. The paperwork for the loan is greatly reduced, especially for those businesses that have been active for two years or more. These SBA loans can be used to fund inventory, business needs, and working capital.
Below are the small business loans that U.S. Bancorp offers:
1. SBA 7(a) Business Loan
The government backs the SBA 7(a) business loan, and its main purpose is to expand the business or fund a takeover.
Benefits
- Amount of Loan: 5 million dollars
- Ten-year term for business acquisition, expansion, and buying equipment
- Seven-year term for inventory and working capital
- Collateral options are flexible
Best Use of the Loan
- Acquisition of a business
- Buying equipment
- Refinancing debt, inventory, or working capital
- Partner buyout and tenant improvement
- for-profit
2. SBA 7(a) Real Estate Loan
The government backs the SBA 7(a) Real estate loan, and its main purpose is to fund the purchase of commercial real estate. The loan can also be used to refinance commercial real estate construction.
Benefits
- Amount of Loan: 5 million dollars
- Additional funding of 2 million dollars by U.S. bank
- Term of 25 years
- No balloon payments; the loan is amortized
Best Use of the Loan
- Purchase of commercial real estate
- Expansion of the business
- Construction and refinancing
- for-profit firms
3. SBA 504 Real Estate Loan
The government backs the 504 Real estate loan, and its main purpose is to fund the purchase of commercial real estate. The loan can also be used to refinance commercial real estate construction.
Benefits
- Amount of Loan: 12.375 million dollars
- U.S. bank loan term of 25 years
- CDC loan term of 25 years
- Equipment loan term of 10 years
Best Use of the Loan
- Purchase of commercial real estate
- Refinancing
- Construction
- for-profit
Types of Loans offered by U.S. Bancorp
1. General Purpose Loan
Features
- Amount of the Loan: 5,000 to 250,000 dollars
- Interest rates are competitive
- Monthly payments
- Financing for SBA is available
- Best for a business that has been active for two years
- Secured by collateral or business assets
- The loan can also be managed through online banking
Fees
- None
2. Equipment Loan
Features
- Amount of the Loan: 5,000 to 250,000 dollars
- Interest rates are competitive and fixed
- Monthly payments
- Financing for SBA is available
- Term of 84 months
- Best for a business that has been active for two years
- Secured by collateral or business assets
- The loan can also be managed through online banking
Fees
- None
3. Vehicle Loan
Features
- Amount of the Loan: 5,000 to 250,000 dollars
- Interest rates are competitive and fixed
- Monthly payments
- Financing for SBA is available
- Term of 84 months
- Best for a business that has been active for two years
- Secured by collateral or business assets
- The loan can also be managed through online banking
Fees
- None
4. Cash Flow Manager Credit Line
Features
- Lines of credit of up to 250,000 dollars
- Interest rates are competitive and can also be locked on a fixed balance
- Best for a business that has been active for two years
- Accessible by online banking, convenience check, Visa Platinum card, and business service center.
- The credit line can also be managed through online banking
Fees
- No fees for credit lines > 50,000
- Annual fee of 150 dollars for credit lines < 250,000
5. Business Line of Credit
- Credit line of a million dollars
- Interest rates are competitive
- Interest-only payment
6. Business Equity Line of Credit
- Credit line of 500,000 dollars
- The term is revolving (maximum of five years)
- Interest-only payment on a monthly basis
7. Business Reserve Line
- Reserve line of 500 dollars
- No fee charged
- Linked to U.S. bank business checking account
U.S. Bancorp Interests, Fees, and Loan Options
1. SBA 7(A) Business Loan
- Interest Rate: 2.25 % (Prime) (if paid in less than seven years)
- Interest Rate: 2.75 % (Prime) (if paid in over seven years)
- Fees: 3.75 % if the loan matures after twelve months
2. SBA 504 Real Estate Loan
- Interest Rate: 2.863 %
- Fees: Fixed but will change every five years
3. General Purpose Loan
- Interest Rate: Competitive
- Fees: No annual fees
4. Equipment loan
- Interest Rate: Competitive and fixed
- Fees: No annual fees
5. Vehicle loan
- Interest Rate: Competitive
- Fees: No annual fees
6. Cash Flow Manager Credit Line
- Interest Rate: Competitive
- Fees: No annual fees for loans >50,000, 150 dollar annual fee for loans <250,000
What Lending Criteria does U.S. Bancorp Have?
1. Time in Business
This is a crucial factor for lenders as if a business has been active for two years, it has had long-term success and can pay the loan. However, if your business is new, it is unlikely that the lender will offer the loan, as the risk factor is too high.
2. Credit Score (personal)
Credit scores are of two types: Personal and business, and they are the essential factor for lenders. Lenders will often ask for your complete credit history and other final information. The personal credit score will eventually decide whether you are eligible for the loan or not. A good personal credit score is usually 600.
3. Credit Score (business)
Similar to a personal credit score, the business credit score shows the ability of the business to pay debts and expenses. The credit score of a business also shows its creditworthiness. The business credit score is also influenced by the size of the business, the revenue it earns, and its industry. Unfortunately, most business owners are unaware that their business has a credit score.
4. Annual profit and revenue
The annual profit and revenue reports will be required by lenders before they offer a loan. The lenders usually review the most essential documents such as profit and loss statements and other bank statements from the past two years. The business should be profitable; otherwise, it will not be eligible for a loan.
5. Personal and Business tax returns
Just like the credit scores, lenders will ask for personal and business tax returns. The tax return will help lenders review the financial situation of the owner and the business.
6. Purpose of the Loan
A typical loan request is just a statement that contains details about how the business will use the loan. However, the business should be specific with the loan details, and the amount of money requested should match up with the purpose of the loan.
U.S. Bancorp Application
Before you apply for the loan, some important steps need to be taken. First, the business needs to prepare all the necessary documentation and ensure that it is updated.
- Business bank accounts
- Personal and Business credit scores
- Personal and business tax returns and IRS documents
- Licenses and registrations (such as Driver's license)
- Details of the business (Name, year established, etc.)
- Details of the owners
- Credit card sales
- Unpaid invoices and accounts receivable
- Other legal contracts
- Forecasting with details of future costs and cash flow
- Business plan with all the necessary details
However, a formal business loan or an SBA loan does not require all of the documentation discussed above. The rest of the loans will require every piece of paper you have to decide whether your business is eligible for a loan or not.
You may also want to gather all your electronic documents, as banks will ask for a lot of evidence to say if you can pay back the loan on time or not. You can apply for the loan online as well by logging onto the website of U.S. Bancorp.
Before applying for the loan, organize everything properly and if any documents are missing, contact the concerned authorities. The best thing to do would be to have a thorough discussion with the bank on the pros and cons of applying for a loan.
Summary of U.S. Bancorp Loan Options
In this article, we discussed ten different loans that the U.S. Bancorp offers. Those loans include SBA Loans, Real estate loans, and SBA loans. Below is a list of the loans:
- SBA 7(a) Business Loan
- SBA 7(a) Real Estate Loan
- SBA 504 Real Estate Loan
- General Purpose Loan
- Vehicle Loan
- Cashflow manager credit line
- Business Line of Credit
- Business Equity Line of Credit
- Business Reverse Line
We have also thoroughly discussed the details of each loan, its interest rates, and fees. For example, some loans offered by U.S. Bancorp have no fees, while others require a small number of annual fees of 175 dollars. We have also discussed the loan criteria and the process of application.
U.S. Bancorp is also registered with the SBA Paycheck Protection Program, but we did not discuss that in this article because the registration process for PPP ended on 4th May. Hence, the U.S. Bancorp is no longer taking PPP applications. So right now, the PPP loan is not being offered by the bank.