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Bank of America Small Business Loans: 2024 Review

Updated Dec 07, 2023

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At a glance

4.3
Rating: 4.3 stars out of 5
Bankrate Score
Caret Down
Accessibility
Rating: 3.9 stars out of 5
Affordability
Rating: 4.1 stars out of 5
Customer experience
Rating: 4.4 stars out of 5
Transparency
Rating: 4.5 stars out of 5
Flexibility
Rating: 4.6 stars out of 5
How Bankrate Scores work Arrow Down

Overview

Bank of America is a national lender with a wide variety of business loan options. Most loans are better suited for established businesses with good-to-excellent credit, but it also offers a cash-secured line of credit to help businesses that want to build credit.

Lender Details

  • Moneybag

    Loan amount

    Starts at $1,000

  • Rates

    Interest rate

    6.75% APR

  • Clock Wait

    Term lengths

    6 months-25 years

  • Dollar

    Min. annual revenue

    $50,000

  • Business

    Min. time in business

    6 months

Who Bank of America is best for

Bank of America business loans are best for business owners who already do the majority of their banking with it. The lender offers interest rate discounts, rewards and other benefits to Preferred Rewards for Business members with eligible Bank of America or Merrill business accounts. The higher your balance, the greater the rewards.

But even if you don’t have an account with Bank of America, it may still be a good choice. Since it offers a variety of loans and lines of credit, businesses that meet its minimum requirements can build business credit and will likely even score interest rates far lower than rates offered by alternative lenders.

Veterans who need small business loans may also want to take special notice: Some Bank of America business loans offer fee discounts of 25 percent to veterans of the U.S. Armed Forces.

Who Bank of America may not be best for

Newer businesses may want to shop elsewhere. Only the cash secured line of credit has a relatively low minimum revenue requirement and minimum time in business of six months.

Bank of America won’t be the best fit for small business owners who need fast business loans. If you don’t already bank with Bank of America, most loan products require you to set an appointment by phone or in person. And once approved, funding time is likely slower than what many online lenders offer.

Bank of America: in the details

Bank of America pros and cons

Pros

  • Checkmark

    Variety of financing options

  • Checkmark

    Low interest rates

  • Checkmark

    Free business credit report

Cons

  • Slow application process

  • Charges origination or annual fees

  • Some loans don't have accessible requirements

Business loan types offered

Bank of America offers a variety of business loan types that suit businesses of most sizes — including some small businesses that have only been open for six months.

Loan quick facts

  • Amounts: $25,000 to $5 million
  • Terms: Up to 25 years
  • Interest rates: Varies

Bank of America SBA loan overview

Bank of America is a Small Business Administration (SBA) preferred lender. Because of this, it can streamline your application and offer a simplified and faster SBA loan process compared to other SBA lenders. 

In general, SBA loans are competitive and may be more difficult to qualify for, but they are open to many types of businesses, including sole proprietorships and limited liability companies (LLCs). They’re typically cheaper and pose less risk than other term loans. Since there are a variety of loan products under the SBA loan program, you should do your research to find the right option before you apply.

Loan quick facts

  • Amounts: Starting at $10,000
  • Terms: Revolving
  • Interest rate: As low as 10.00%

Bank of America business line of credit overview

The unsecured business line of credit offered by Bank of America is a good option for businesses that need flexible funding. Like all lines of credit, your business will only pay interest on the amount it uses. The line renews every year, and you can access your funds any time without paying a cash advance fee, which is a feature other lenders may not offer.

Loan quick facts

  • Amounts: Starting at $25,000
  • Terms: Revolving
  • Interest rates: As low as 9.50%

Bank of America secured business line of credit overview

Bank of America’s secured lines of credit have slightly more strict eligibility requirements than some of its other financing options. Your business will need to meet a minimum annual revenue of $250,000 to qualify. If it does, you will have access to a low starting rate. 

This line of credit has upfront and annual renewal fees: $150 for credit lines of up to $100,000; $250 for lines above $100,000 and up to $250,000 and a 0.50 percent fee on the line amount for credit lines above $250,000.

Loan quick facts

  • Amounts: Starting at $1,000
  • Terms: N/A
  • Interest rates: N/A

Bank of America Cash Secured line of credit overview

The Cash Secured line of credit is the only option Bank of America offers for newer businesses. Provided you have at least $50,000 in annual revenue and a $1,000 security deposit, your business could qualify. After two years in business and with an annual revenue of $100,000, your business will be eligible to switch to an unsecured business line of credit

This option is designed to help small business owners build business credit rather than access funds. The security deposit you make acts as your line of credit. There is an annual fee of $150, and if you decide to close your account, you simply need to pay off your balance. Once the account is closed, the security deposit will be refunded.

Loan quick facts

  • Amounts: Starting at $25,000
  • Terms: Up to 4 or 5 years, depending on collateral
  • Interest rates: As low as 7.75%

Bank of America secured term loan overview

If your business has valuable assets or a certificate of deposit (CD), it may qualify for a secured business loan. Bank of America offers a competitive interest rate for loans — starting at 6.50 percent. Just be prepared to borrow a larger loan and pay an origination fee of 0.50 percent of the total amount financed — which means a fee of at least $125 when you borrow.

Loan quick facts

  • Amounts: Starting at $10,000
  • Terms: 1 to 5 years
  • Interest rates: As low as 8.00%

Bank of America unsecured term loan overview

Bank of America also offers unsecured business loans if your business does not have — or can’t afford to risk — an asset. Like Bank of America’s other loan products, rates are competitive and much lower than what many online lenders offer. But there is an origination fee of $150 if approved.

Loan quick facts

  • Amounts: Starting at $25,000
  • Terms: Up to 5 years
  • Interest rates: As low as 7.50%

Bank of America equipment loan overview

Bank of America offers equipment loans to finance large purchases necessary for your business, including office and construction equipment and semi trucks. Loan terms go up to five years if secured by business assets, and interest rates are competitive. But there is a 0.50 percent fee on top of the amount financed, which could be a significant cost depending on the size of your loan.

Here’s a look at even more loan options available through Bank of America. 

  • Auto loans. If your business needs to invest in one vehicle or a fleet of vehicles, Bank of America has financing. You can borrow $10,000 with terms of 48 to 72 months for business-related transportation.
  • Commercial real estate loans. Much like Bank of America’s other secured loan options, you can borrow at least $25,000 for commercial real estate. Interest starts at a low 6.75 percent, and terms last anywhere from 10 to 15 years.
  • Health care practice loans. Bank of America also offers loans specifically for doctors, dentists and veterinarians.

Do you qualify? 

At a minimum, most businesses will need to meet three requirements to get a Bank of America business loan: 

  • 2 or more years in business
  • $100,000 to $250,000 in annual revenue
  • Personal credit score of 700+

Its Cash Secured line of credit is the only one to offer financing to businesses with six months in business and $50,000 in annual revenue. 

Other limitations — like how you can spend loan funds and which industries qualify — are not stated directly by Bank of America.

What we like and what we don’t like

Bank of America is one of the best small business lenders, especially if you want low rates and to monitor your progress as you build credit. But it won’t be a good fit for everyone.

What we like

  • Variety of financing options. Bank of America has lines of credit and term loans — all of which can be either secured or unsecured. This allows your business to find the right fit for its financing needs.
  • Low rates. Bank of America’s starting interest rates are low and can go even lower if you are a Preferred Rewards member.
  • Free business credit report. When you borrow from Bank of America, you will receive a free business credit report to help you track how your business is doing.

What we don't like

  • Slow application process. Most loans require you to apply in person at a Bank of America branch or over the phone if you don’t already have a Bank of America Online Banking ID. For faster loans with online applications, you’ll need to look elsewhere.
  • Charges origination or annual fees. Most loans charge an origination fee either as a percentage of the loan amount, such as 0.50 percent, or a fixed fee, like $150. Its business lines of credit also charge annual fees to keep the line open, which isn’t the case with some competitors. 
  • Some loans don’t have accessible requirements. Like banks and other traditional lenders, Bank of America doesn’t provide many options for business owners who need bad credit business loans. Plus, most loans have a minimum time in business of two years, which won’t work for startups.

How Bank of America compares to other lenders

Rating: 4.3 stars out of 5
4.3

Bankrate Score

  • Loan amount

    Starts at $1,000

  • Interest rate

    6.75% APR

  • Term lengths

    6 months-25 years

  • Min. time in business

    6 months

  • Min. business annual revenue

    $50,000

Rating: 4.2 stars out of 5
4.2

Bankrate Score

  • Loan amount

    $5,000-$10 million

  • Interest rate

    8.75%-18.25% APR

  • Term lengths

    Up to 25 years

  • Min. time in business

    Less than two years

  • Min. business annual revenue

    Not stated

Rating: 4.1 stars out of 5
4.1

Bankrate Score

  • Loan amount

    $5,000-$5 million

  • Interest rate

    9.01%-19.69% APR

  • Term lengths

    2-25 years

  • Min. time in business

    Not disclosed

  • Min. business annual revenue

    Not disclosed

Read our review

on Bankrate

Bank of America vs. Wells Fargo

Both Bank of America and Wells Fargo are brick-and-mortar banks with a wide U.S. reach. Bank of America offers more loans, including term loans, SBA loans, lines of credit, equipment loans and commercial real estate loans. Wells Fargo focuses on lines of credit and SBA loans. 

Both banks offer multiple lines of credit catering to small businesses in different growth stages. While unsecured lines of credit have similar loan amounts, the requirements are considerably stricter for Wells Fargo’s secured line. They also both offer options for startups, though you’ll need a $1,000 security deposit for Bank of America’s credit-building line of credit.    

With Wells Fargo, you’ll need a personal credit score of at least 680. Bank of America doesn’t state its minimum credit score requirement for every loan. It requires at least a 700 FICO score for its unsecured business line of credit and unsecured term loan. But a credit score of 670 or higher is common with traditional banks.

Bank of America vs. U.S. Bank

Bank of America and U.S. Bank offer similar loan options. Bank of America’s offerings span everything from term loans and business lines of credit to SBA loans and equipment loans. U.S. Bank covers SBA loans, lines of credit, equipment loans and term loans. 

Bank of America doesn’t state its maximum loan amounts, which could make it easier for you to compare lenders. For U.S. Bank, its term and equipment loans offer loan amounts up to $1 million. 

U.S. Bank’s equipment loans also don’t require a down payment and allow borrowers to finance up to 25 percent of additional costs like installation, tax and freight. You also don’t have to pay a down payment if you choose a term between 24 and 60 months, and you may be able to get a longer term loan. Bank of America only allows you to pay off equipment loans for up to five years.

While both banks offer lines of credit, Bank of America provides a credit line for startup businesses that U.S. Bank doesn’t offer.

How to apply for a loan with Bank of America

Bank of America allows current account holders to log in and apply directly online. If your business does not already have an account, you will need to schedule an appointment with one of Bank of America’s small business specialists. 

To get a business loan from Bank of America, you will need to provide a few basic pieces of information about your business, including: 

  • Legal business name
  • Business tax ID number
  • Annual revenue
  • Annual profit before tax
  • Personal income, date of birth and Social Security number
Other information will be required based on your business and the type of loan you want to apply for.

Bank of America frequently asked questions

How Bankrate rates Bank of America

Overall Score 4.3
Accessibility 3.9 Business owners with poor credit or a need for fast loans may find better options elsewhere.
Affordability 4.1 Annual fees and the lack of information on maximum rates take a bite out of this lender’s score.
Transparency 4.5 Bank of America leaves some key details off its website, like specific minimum credit scores for each loan.
Customer experience 4.4 A quick online application for all applicants could help improve the lender’s score in this category.
Flexibility 4.6 Multiple loan types and perks like free business credit score help make this lender an appealing option.

Methodology

Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
22
loan features weighed
Rates
770+
data points collected

To select the top small business lenders, Bankrate considers more than 20 factors. These factors include loan amounts, approval and funding times, credit requirements, APR or factor rate ranges, fees, and easy-to-find rate and fee disclosures. Bankrate reviewed more than 30 lenders and gave each a rating, which consists of five categories:

  • Accessibility: Factors considered in this category include minimum loan amounts, approval and funding speed, minimum annual revenue and minimum credit score.
  • Affordability: This section measures interest or factor rates and fees.
  • Transparency: How easy it is to find important rates, fees and eligibility requirements are considered in this category.
  • Customer experience: Customer service hours, online applications and app availability are considered in this category.
  • Flexibility: This category considers factors like the number of loan products and ability to change payment due date.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.