Wells Fargo business loans: 2023 review
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At a glance
| Overall Score | 4.2 |
|---|---|
| Overview | Wells Fargo offers business lines of credit and SBA loans with competitive rates for eligible business owners. It even offers a business line of credit to businesses that have been around less than two years. These products are relatively flexible, and you can choose from secured and unsecured lending options. |
| Loan amount: | $5,000 to $6.5 million |
| APR: | Starting at 8.75% (Prime + 0.50%) |
| Term lengths: | Up to 25 years |
| Minimum credit score: | 680 |
Who Wells Fargo is best for
Who Wells Fargo may not be best for
If you’re a startup or need funds for your business right away, Wells Fargo likely isn’t a good fit for you. The lender prefers established companies.
Traditional banks are usually not a good fit for borrowers looking for fast business loans, as they may take days or weeks to fund loans. And if your personal or business credit rating is on the lower end, an online lender that offers bad credit business loans may be a safer choice
Wells Fargo pros and cons
PROS
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Multiple lines of credit
Attractive rates
Rewards program
CONS
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Limited loan options
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Annual fee may be required
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Personal guarantee
Business loan types offered
Wells Fargo offers multiple business lines of credit and SBA loans to small business owners. You’ll need good or excellent credit to qualify since interest rates are some of the lowest available.Wells Fargo BusinessLine® line of credit
This is an unsecured business line of credit for small business owners who have been up and running for two or more years. It doesn’t require you to put up business collateral, doesn’t charge draw fees or give you a limited amount of time to make draws. Instead, you get a revolving line of credit with no scheduled annual review. You pay an annual fee (waived the first year) of $95 if your line amount falls between $10,000 to $25,000 or an annual fee of $175 if your line amount is greater than $25,000.
Even though it doesn’t require collateral, it does require a personal guarantee from any owner with 25 percent or more of the business. It’s designed to help small business owners cover unexpected expenses, supplement cash flow and capitalize on expansion opportunities.
Loan amounts aren’t the highest, as you’ll find business lines of credit that offer limits of $250,000 and higher. But you will be automatically enrolled in the Wells Fargo Business Rewards program, which comes with a number of benefits you won’t find with many other business lines of credit. This includes earning one point for every dollar in eligible purchases made with the Mastercard Access card that comes with your business line of credit.Wells Fargo Small Business Advantage® line of credit
Backed by the U.S. Small Business Administration (SBA), this unsecured line of credit caters to business owners with less than two years in business. It has a smaller line limit than the BusinessLine and a higher starting APR rate, but you get a 5-year revolving line without an annual fee. It also comes with a Mastercard access card that lets you earn rewards on qualifying purchases.
Personal guarantees are required for any owner with 20 percent or more of the business. You must also operate as a for-profit entity and have personal household liquid assets not exceeding $500,000 to qualify.
Wells Fargo Prime Line of Credit
Established companies generating $2 million to $10 million in annual revenue could be a good fit for the Prime Line of Credit. It’s secured by business assets (excluding real estate) and comes with a one-year draw period since the line is renewable annually.
You’ll pay a 0.50 percent origination fee when you open the account and at the annual renewal. This is low compared to origination fees of 2 percent to 8 percent charged by other lenders.
Wells Fargo recommends this form of funding for large purchases, short-term working capital expenses or if you want to take advantage of bulk-pricing discounts.
SBA loans
SBA loans are also insured by the U.S. Small Business Administration. Wells Fargo offers SBA 7(a) loans and SBA 504 loans. They feature lower down payments, attractive SBA interest rates and extended loan terms.
SBA 7(a) loans allow you to purchase equipment or real estate, expand operations, acquire a different business, buy out a partner or cover other business-related expenses. If you want to grow your company through construction, equipment purchases, building or land acquisitions, an SBA 504 is a better fit. Both loans are available to companies with an average new income under $5 million and a net worth under $15 million seeking long-term financing.
Do you qualify?
Eligibility requirements will vary by loan product. You'll need a personal score of 680 to qualify for its business lines of credit. Wells Fargo does not disclose minimum annual revenue requirements for its small business loan offerings, and lending and usage restrictions (if any) aren’t published on the website. You’ll need to inquire with a banker to learn more about the lender’s eligibility guidelines.What we like and what we don’t like
Wells Fargo offers affordable loans to eligible business owners. But there are drawbacks to consider.
What we like
- Multiple lines of credit. There is a line of credit for newer businesses, establishes businesses and businesses that rake in $2 million or more.
- Attractive rates. The minimum interest rates offered on the business lines of credit are lower than most lines of credit offered by online lenders.
- Rewards program. Unsecured lines of credit come with a built-in rewards program that lets you earn points for every dollar spent on qualifying purchases.
What we don’t like
- Limited loan options. Business term loans, working capital loans and equipment financing loans aren’t available through Wells Fargo.
- Annual fee. The Wells Fargo BusinessLine line of credit comes with an annual fee after the first year.
- Personal guarantee. Owners must provide a personal guarantee on business lines of credit.
How to apply for a loan with Wells Fargo
You can apply for the Wells Fargo BusinessLine line of Credit or Wells Fargo Small Business Advantage line of credit online or by visiting a branch. If you’re interested in the Wells Fargo Prime Line of Credit, call 1-844-807-5060 to apply.
Required application information- Legal business name
- Business tax ID (or Social Security number)
- Company address and phone number
- Date of establishment
- Gross annual revenue
- Type of ownership
- Number of owners
- Name, address, phone number, date of birth, Social Security number and citizenship status (at least one owner with control and authority)
- Percentage of ownership and annual household income (each owner with an interest of 25 percent or more)
- Personal Financial Statement form (provided by Wells Fargo)
- Two most recent personal and business tax returns (Wells Fargo Prime Line of Credit only)
- Two years of company-prepared, year-end financial statements (Wells Fargo Prime Line of Credit only)
Wells Fargo FAQs
How Bankrate rates Wells Fargo
Overall Score 4.2 Accessibility 3.7 Wells Fargo doesn’t disclose much information on its website, which makes it harder for borrowers to know if they’re eligible. Affordability 4.1 Rates are lower, and loans come with fewer additional fees than many other lenders. Transparency 4.5 Wells Fargo provides APR ranges for two of its lines of credit, which goes further than many other lenders. Customer experience 3.9 Online access and an online payment option make for a decent customer experience. Flexibility 4.6 Annual fee waiver the first year, potential credit line increases and Mastercard access cards provide a good level of flexibility for the lines of credit. 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.