Key Takeaways
Both Bank of America and Wells Fargo offer business loans to businesses with good to excellent credit. Choose Bank of America for term loans and business credit cards, and Wells Fargo for unsecured business lines of credit.
If you want to get business financing from a bank, Bank of America and Wells Fargo are two of the largest banks in the U.S. Bank of America offers many different types of loans, including term loans, lines of credit, SBA loans, and equipment financing, while Wells Fargo focuses on SBA loans and lines of credit.
Depending on your needs, either Bank of America or Wells Fargo could be a good choice. Let's compare each bank's offerings to see which bank is best for small business loans.
Bank of America vs Wells Fargo
The right lender for you will depend on your business needs. Bank of America offers flexible business loans with repayment terms as short as six months and as long as 25 years. Wells Fargo helps small business owners who only need a small amount of business capital, starting at $5,000 with its Small Business Advantage® Line of Credit.
Bank of America Wells Fargo Bankrate Score 4.3 4.2 Best Uses Loan Type Unsecured Lines of Credit Number of Loan Products 7 4 Loan Amount $1,000 to $5,000 to $10 million Interest Rate Minimum 7.00% APR Minimum 9.00% to 18.25% APR Term 6 months to 25 years Maximum 25 years Personal Credit Score 700 680 Minimum Business Term 6 months Varies Minimum Business Revenue $50,000 Not Specified
Bank of America Business Loans
Bank of America offers low starting interest rates on small business loans. If you have good credit, you can get equipment and secured loans with interest rates as low as 7.00 percent APRs. Commercial real estate loans are even lower, with a starting rate of 6.25 percent.
This lender is also one of the few banks that offers a credit-building line of credit: Businesses that don't need a loan but want to build business credit can open a cash secured line of credit with a minimum deposit of $1,000.Bank of America also offers several other types of business loans, including medical and auto loans.
The lender also offers SBA loans. Bank of America's SBA loans include SBA 7(a) loans and 504 loans, which are the typical SBA loans offered by banks. However, the lender also offers SBA Express loans.
Bank of America business loans are great for companies that use their business banking services. Your cash deposit serves as collateral for your business loan, making it easier to qualify for the loan. You also get access to Bank of America's Preferred Rewards program based on your bank balance, which can help you avoid bank fees, get interest rate discounts, and more.
Strong Points
A variety of loan types Low interest rates for qualified applicants Rewards programs for businesses that do business with Bank of America
Cons
High eligibility requirements Long application process Limited information available online
Bankrate Insights
For more information, see how Bank of America's business loans compare to the following loans:
Wells Fargo Business Loan
Wells Fargo focuses on business lines of credit. The company has three different options, each tailored for a different company: one for startups, one for established businesses, and a third for larger companies with at least $2 million in annual revenue.
The bank also offers other business bank accounts and services, including current accounts and payroll services.
Although Wells Fargo focuses primarily on business lines of credit, it is also one of the largest SBA lenders in the U.S. It also offers SBA lines of credit of up to $50,000 for businesses that are less than two years old. Wells Fargo SBA loans include:
Strong Points
Multiple lines of credit for a variety of businesses Leading provider of SBA loans Reward program for lines of credit
Cons
Line of credit has an annual fee, a high credit score requirement, and a personal guarantee.
Bankrate Insights
Want to learn more about Wells Fargo business loans? Our Chase vs Wells Fargo review will show you how this lender stacks up against another big player in the banking industry.
Should I choose Bank of America or Wells Fargo?
If you bank with Bank of America or Wells Fargo, they're a natural choice for business financing, but if you don't do business with either bank, your needs will be slightly different.
Choose Bank of America for business loan diversity
Bank of America offers more small business loans to businesses with good to excellent credit than many other lenders. You can get a term loan, multiple business lines of credit, equipment financing, commercial real estate loan, or SBA loan. They also offer cash-secured business lines of credit, which can help business owners improve their business credit score and qualify for affordable loans in the future.
In comparison, Wells Fargo only offers business lines of credit and SBA loans. If you're looking to diversify your loan options or want the option to borrow a variety of loans from the same lender in the future, Bank of America may be the better choice.
Choose Wells Fargo for Unsecured Business Lines of Credit
Wells Fargo offers three types of credit lines to borrowers, two of which don't require collateral: one aimed at established businesses that have been in business for two years and another aimed at early-stage startups.
Choose Bank of America for your business credit card
Bank of America's business credit cards cater to a variety of business needs: Business owners can choose from travel rewards cards, cash back cards, and even customizable rewards cards with rewards categories to choose from.
Bank of America offers the best business credit cards, while Wells Fargo isn't accepting new business card applications, though the company has announced it will begin offering new cards soon.
Alternative proposal
Wells Fargo and Bank of America are both banks that tend to focus on somewhat more established companies rather than smaller or emerging businesses.
A natural alternative to these bank business lenders is Chase. Chase is another large bank that offers a variety of business services, including business loans and business credit cards. They offer unsecured term loans, SBA loans, commercial real estate financing, and lines of credit.
Businesses with poor credit may want to consider online lending. While banks tend to work with business owners who have good to excellent credit and are in good financial standing, online lenders offer more accessible financing.
For example, Fundible and SMB Compass offer a variety of loans, including lines of credit and term loans. While SMB Compass has relaxed qualification requirements for some loans, if you have good to excellent credit you can get low-interest business loans that are comparable to bank lenders. Fundible is more accessible: the company partners with other lenders and may approve borrowers with credit scores as low as 450.
SBA Loans
Large banks like Wells Fargo and Bank of America prioritize lending to established businesses with good credit, even when offering SBA-guaranteed loans, but there are special SBA programs available that can be easier to access than traditional bank SBA loans.
For example, SBA microloans are specialized loans of $50,000 or less that are typically targeted to underserved communities, such as veterans and women-owned businesses. The SBA maintains a list of microloan providers to help you find one in your area.
You can also apply for an SBA loan through a Certified Development Center, an SBA microlending company, or a Community Advantage Lending Company, a community development financial institution that aims to serve disadvantaged business owners.
Bankrate Insights
While Wells Fargo and Bank of America are both top SBA 7(a) lenders, Wells Fargo approved more SBA 7(a) loans than Bank of America in fiscal year 2023. According to the SBA's weekly lender report, Wells Fargo approved more than $427 million in SBA 7(a) loans in 2023, while Bank of America approved more than $419 million.
Conclusion
Bank of America and Wells Fargo are two of the largest national banks that offer business loans. Bank of America offers a wider range of small business loans, including seven different loan options. These options can be helpful if you're considering multiple types of business loans or if you want to borrow multiple loans from the same lender in the future.
Wells Fargo specializes in business lines of credit, offering options for both new businesses and those with millions of dollars in revenue. Depending on the line of credit you choose, you might not even need collateral. Before you settle on one lender, be sure to explore your other options. Compare interest rates and fees to find the best terms possible.
FAQ
Will a bank give me a loan to start a business?
Yes, some banks offer loans to help new businesses, but loans will be harder to obtain than if you were running an existing company. Be prepared for higher interest rates and fees, and for personal guarantees to be required.
What is an SBA loan?
SBA loans are guaranteed by the U.S. Small Business Administration, which reduces the lender's risk and allows them to offer larger loans with longer repayment periods than traditional loans. The SBA has several loan programs that try to help many businesses, including startups and business owners in low-income and underserved areas.
How do I qualify for a business loan?
Most lenders require a business plan and a business checking account to qualify for a business loan. However, your eligibility for a business loan also depends on your credit score, financial profile, and the lender you apply with.
If you have a long operating history, ample business revenue, and a good credit score, you may be able to easily get a business loan from a bank, credit union, or online lending company. If you are a start-up business or have limited revenue or bad credit, you should work with an online lending company. Many online lending companies offer different types of bad credit business loans that are open to businesses with looser qualification requirements.
If you're having trouble getting a traditional loan, you might also consider working with an SBA-certified lender. Different types of SBA loans can help different types of borrowers.