Features
Part of Term loans, matched to what they buy: amortisation compared against asset life
Lenders for term loans: what each institution is actually built to do well
Term loan lenders sorted by what each institution type is built to do well, with named banks, credit unions and community lenders to compare.
What to take away
- Your file decides which type of lender says yes. Banks compete on price and size, which suits a clean record and a large request. Credit unions and community lenders handle smaller tickets and stay patient in a weak year. Online lenders sell speed, and price it into the annual cost.
- The SBA publishes weekly lender activity reports, where Huntington National Bank, Live Oak Bank, Newtek Bank and Wells Fargo recur near the top of the 7(a) list.
- Expect a personal guarantee from any owner holding 20 percent or more on most bank and SBA-backed term loans.
- Criteria shift within a year, so confirm current terms directly before applying.
Named lenders, sorted by what they were built for
Six institution types cover nearly every business term loan in the United States. Which one fits depends on what the money buys, as term loans matched to their purpose explains.
| Institution type | Named examples | Built to do well | Weaker at | Typical ticket |
|---|---|---|---|---|
| Large national bank | Chase, Bank of America, Wells Fargo, U.S. Bank | Price, size, conventional term loans | Speed, thin files, small requests | $250,000 to $5 million |
| SBA-focused bank | Live Oak Bank, Newtek Bank, Huntington National Bank | 7(a) and 504 structure | Loans under $100,000, startups | $150,000 to $5 million |
| Credit union | Any federally insured credit union with a business desk | Small local loans, patience in a slow year | Complex structures, national reach | $25,000 to $250,000 |
| CDFI or mission lender | Accion Opportunity Fund, Treasury-certified CDFIs | Thin files, startups, micro amounts | Speed, large tickets | $5,000 to $100,000 |
| Online lender | OnDeck, American Express, PayPal | Speed, small amounts, weak collateral | Price, patience | $5,000 to $250,000 |
| Vendor finance arm | Captive finance units of equipment makers | Financing one specific asset | Independent pricing | Sized to the equipment |
Institution types: strengths and weaknesses
Institution
- Wells Fargo
- Price, size, product range
- JPMorgan Chase
- Price, national reach, treasury
- Live Oak Bank
- Speed, industry focus
- Navy Federal CU
- Member pricing, forbearance, access
- Alliant CU
- Competitive fixed rates
- CDC Small Business Finance
- Patience with thinner files
- Accion Opportunity Fund
- Small loans, thinner credit
- OnDeck
- Speed, lighter documentation
Built to do well
- Wells Fargo
- Flexibility, small files, speed
- JPMorgan Chase
- Small requests, unusual collateral
- Live Oak Bank
- Price versus relationship bank
- Navy Federal CU
- Membership eligibility, size ceilings
- Alliant CU
- Narrow business lending menu
- CDC Small Business Finance
- Speed, geographic scope
- Accion Opportunity Fund
- Loan size ceiling
- OnDeck
- Price, servicing depth, forbearance
Weaker on
- Wells Fargo
- JPMorgan Chase
- Live Oak Bank
- Navy Federal CU
- Alliant CU
- CDC Small Business Finance
- Accion Opportunity Fund
- OnDeck
Treat the table as a filter, not a ranking. A lender that is weak for one borrower is right for another. Rank the trade-offs before you start calling.
Watch vendor finance. When the seller of an asset also arranges the money, the asset price and the money price can move against each other. Get a cash price in writing, then negotiate financing separately.
What each lender type asks of your file
Each type wants something different before it will read your request, and the options for a thin file are mapped in loans by credit profile.
Large banks want two to three years of statements, profitable returns, collateral and a guarantee. Requests under $100,000 rarely fit their cost model.
SBA-focused banks write 7(a) loans up to $5 million for working capital, equipment and real estate, as the 7(a) program page sets out. They also arrange 504 loans for owner-occupied property, where a bank takes 50 percent, a CDC 40 percent and the borrower 10 percent, under the 504 rules.
Credit unions begin with membership, and not every one makes business loans. Ask first, then bring personal financials, because the owner is underwritten alongside the business.
CDFIs and mission lenders fund files that banks decline. The SBA microloan program caps at $50,000 and is open to startups, with lighter documentation.
Online lenders want six to twelve months of bank data and collect daily or weekly. The trade-off is annual cost.
Questions that sort candidates before you apply
Put these to a loan officer on a first call, before any application. The eligibility rules that decide the answer are gathered in term loans rules.
- What is the all-in annual cost, including every fee?
- How many days from application to funds in my account?
- What is the smallest loan you write, and the largest?
- What happens if a payment runs late in a slow month?
- Do you require a personal guarantee, and would you take a lien on my home?
- Will you sell or transfer servicing after closing?
- What is the most common reason you decline a file like mine?
First-call questions to sort lenders
- Do you actively write this loan for my size?
- What is smallest and largest you consider?
- Do you lend into my industry?
- What do you require beyond published criteria?
- How long from application to funds?
- Who services the loan afterwards?
- What most often causes a file like mine to stall?
The last question is the most useful, and almost nobody asks it. Someone who has seen many files will usually answer plainly.
Comparing offers on one annual cost
Convert every offer the same way: total dollars out against dollars received, scaled to a year. Run quotes within a few weeks of each other, or you compare market conditions rather than lenders.
The arithmetic sits in the term loans calculator. Ask who will collect payments in year three, since a servicer with no relationship to you has fewer reasons to be flexible.
Where Canadian borrowers look
The Canada Small Business Financing Program guarantees term loans for equipment and leasehold improvements. The borrower must provide 15 percent of an equipment loan as security, as the program page explains.
The Business Development Bank of Canada lends where banks sometimes will not, so it belongs in the same comparison.
