Live Oak Bank business loans: 2023 review
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At a glance
| Overall Score | 3.0 |
|---|---|
| Overview | Live Oak Bank offers U.S. Small Businesss Administration, U.S. Department of Agriculture and commercial bank loans. It was also the leading provider of SBA loans by dollar volume in 2022. |
| Loan amount: | $150,000 to $15 million |
| APR: | Varies by loan product |
| Term lengths: | Up to 25 years |
| Minimum credit score: | 650 |
Who Live Oak Bank is best for
Business owners seeking SBA loans are an ideal fit for Live Oak Bank business loans. As a member of the SBA Preferred Lender Program, Live Oak can make credit decisions in-house. This accelerates the approval process by three to four weeks. Plus, because these loans are government-backed, you might qualify for longer terms and lower interest than you would with a non-SBA lender.
Who Live Oak Bank may not be best for
If you operate in a restricted industry not served by Live Oak Bank, it’s best to look elsewhere. These include companies in sectors that pose an elevated risk to the lender. Live Oak Bank isn’t the best for fast loans — even with a Preferred Lender, the funding process for SBA loans can take weeks.
Live Oak Bank pros and cons
PROS
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Generous loan limits
SBA Preferred Lender
Multiple loan options
CONS
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Limited disclosures on website
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No online prequalification tool
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Industry restrictions
Business loan types offered
Live Oak Bank features SBA, USDA and customizable commercial loans.SBA 7(a) loans
In 2022, Live Oak Bank was the leading originator in SBA 7(a) loans by dollar volume. It approved more than 1,100 loans totalling $1.7 billion, making the lender a trusted option for this type of business loan.
Borrowers can qualify for between $150,000 and $5 million. The maximum loan term is 15 years if you’re using the funds to purchase machinery and equipment, 25 years for real estate investments and 10 years for other purposes. Live Oak Bank doesn’t disclose its interest rates, but the SBA caps interest rates at a base rate plus 8 percent. There are no prepayment penalties for loans with terms under 15 years.
Personal guarantees are required from all business owners with a 20 percent or greater stake, and you may have to put up personal assets to satisfy collateral requirements. You’ll need a personal credit score of at least 650.
SBA 504 loans
SBA 504 loans are ideal for acquiring commercial real estate and large equipment. You can also use the loan proceeds to finance improvements of existing facilities. A down payment of 10 percent is typically required. Personal guarantees are required from all business owners with a 20 percent or greater stake, and the financed asset itself will act as collateral for the loan.USDA rural development loans
Live Oak Bank’s website provides limited details on its commercial USDA loan offerings. However, it helps small business owners navigate the application process for the following:
- USDA Business & Industry Program
- USDA Community Facilities Program
- USDA Water and Environmental Program
- USDA Rural Energy for America Program (REAP)
- USDA 9003 Program
- USDA Food Supply Chain Guarantee Program
Additional loans
The lender states it offers larger funding opportunities to assist small business owners. You could get a combination of SBA loans, conventional loans and lines of credit. But details regarding these commercial lending products are limited.
Do you qualify?
Small business loans are available in all 50 states, but the eligibility guidelines vary by loan product. Generally, you’ll need a good or excellent personal credit score to qualify. Some loans also require a down payment.
It’s important to note that Live Oak Bank may not lend to industries and business models that:
- Have weak or variable historic cashflow
- Rely on discretionary spending for revenue
- Depend on one or a few high-paying customers
- Are highly cyclical
What we like and what we don’t like
Live Oak Bank is an SBA Preferred Lender offering generous loan limits. Still, there are downsides to consider before applying for funding.
What we like
- Generous loan limits: You could be eligible for a business loan of up to $15 million, depending on the loan type you pursue.
- SBA Preferred Lender: Borrowers generally receive faster loan decisions and more attractive loan terms. Plus, these lenders have demonstrated experience in handling SBA loans, meaning they can help your business navigate the process.
- Multiple loan types: In addition to government-backed SBA and USDA loans, Live Oak Bank can customize a lending package with other commercial loan types, such as lines of credit.
What we don't like
- Limited disclosures: Like many banks, lender does not list interest rates and other borrowing costs online. In general, the bank steers borrowers toward contacting its lending experts for answers to their questions — which could be a plus for some, but a minus if you prefer to research a lender thoroughly before reaching out.
- Industry restrictions: Although loans are available in all 50 states, industry restrictions apply depending on your business model.
How to apply for a loan with Live Oak Bank
When you’re ready to apply for a loan with Live Oak Bank, use the search bar on the website to locate your industry. You’ll be routed to a page with more information on how the lender can assist you with your funding needs.
Submit an inquiry to connect with a loan specialist about potential loan opportunities. A representative will contact you to discuss lending options, documentation requirements and the next steps.
Loan specialists are available by phone at 866-518-0286 to answer any questions. Phone lines are open Monday through Friday from 8 a.m. until 8 p.m. EST. You can also submit an online inquiry to connect with a loan specialist.
Live Oak Bank FAQs
How Bankrate rates Live Oak Bank
Overall Score 3.0 Accessibility 2.7 Though Live Oak Bank offers massive loans, your business must be well-established to qualify. Funding timelines are unclear. Affordability 3.0 The website doesn’t disclose interest rate ranges, though SBA loans have caps established by the government. Transparency 3.2 Details on Live Oak Bank’s website are slim — you’ll need to talk to a bank employee to learn more. SBA lenders are required to report payments to the three major commercial credit bureaus. Customer experience 2.4 You can’t apply online, but Live Oak Bank has a team of lending experts ready to answer your questions Monday through Friday. Flexibility 3.8 Live Oak Bank offers multiple loan types and can customize its loans to your business’s needs. Methodology
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 20 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.