If you are located in the Pacific Northwest and are in need of a small business loan, one lending partner you might be considering is Banner Bank. With over 200 locations in Washington, Oregon, California, and Idaho, and a variety of different financing options, Banner Bank offers small business owners convenience and flexibility.
Furthermore, Banner Bank provides a suite of other banking services to small business owners, making it a one-stop-shop solution. By virtue of being a brick-and-mortar institution, Banner Bank can also offer more generous loan amounts and repayment terms than qualified borrowers would typically find with an alternative lender.
Let’s go more in depth on the different types of loan options available to small business owners with Banner Bank. Because bank loans are difficult to qualify for, we’ll also provide you with some alternatives so you come away with a good idea of how your business can acquire financing.
9 Different Banner Bank Business Loan Types
Banner Bank offers nine different types of loan options. However, the information Banner Bank provides about the terms of each loan on their website is limited. This is typically the case with banks, which prefer you to call them directly or visit your local branch and speak to a representative about loan options.
So although we can’t tell you the exact terms of Banner Bank loans or what it takes to qualify for one, we can explain how each loan works, and the business situation in which you’d want to apply for each one. If you find a loan option that you think is a good fit for your business, you can then contact the bank directly to discuss specific terms.
1. Small Business Administration (SBA) Loan
The SBA is a government agency that guarantees loans to small business owners through lenders like Banner Bank. But Banner Bank is not just an SBA lender—it has been named SBA Regional Lender of the Year in Washington state four years in a row, meaning you’re in good hands trying to secure an SBA loan through Banner Bank.
SBA loans are a good option because they are partially backed (up to 85%) by the SBA, meaning if the borrower defaults on the loan, the lender can reclaim at least part of the defaulted amount. Because of this, lenders are more likely to offer SBA loans than conventional bank loans.
Banner Bank is a Preferred SBA Lender, meaning they can process an SBA application in-house, which expedites the application and underwriting process. However, an SBA loan application is still a time- and paperwork-intensive process. Even working with an SBA lender like Banner Bank, borrowers should expect to wait several weeks for their application to be processed.
SBA loans are usually worth the wait, though. An SBA 7(a) loan can be used for a variety of different business purposes, including buying equipment or inventory, refinancing debt, or developing real estate. Plus, SBA loans offer some of the longest repayment terms and lowest interest rates on the market. Banner Bank SBA loans offer seven- to 10-year repayment terms on equipment loans and up to 25 years on SBA CDC/504 loans, which can be used to purchase commercial real estate.
But be aware: The SBA has strict loan eligibility requirements. Those who qualify typically have an annual revenue over $180,000, a credit score greater than 680, and have been in business at least four years. When applying you’ll need to provide a business plan, personal and business income tax returns, a business balance sheet, profit and loss statements, a business debt schedule, and business bank statements, among other documentation. Applicants may also need to offer business assets as collateral, and sign a personal guarantee.
2. Term Loan
A term loan is the most typical type of business loan. This is a lump sum of capital that you pay back with regular repayments plus interest. Banner Bank offers up to seven-year term loans at either a fixed or variable interest rate. To get the best possible terms you’ll want to be able to demonstrate a high annual business revenue and personal credit score.
Credit: Steve Morgan
3. Business Line of Credit
Banner Bank offers secured and unsecured lines of credit that can serve as working capital for most business types. You can use a Banner Bank line of credit to cover operating expenses, offset revenue fluctuations, finance inventory, and much more.
A line of credit works similarly to a credit card in that you will be given a specific amount of financing set by a credit limit. You can draw from that financing whenever you need, and you’ll only pay interest on the amount you use. This differs from a typical loan, which requires you to pay back the entirety of the loan, plus interest. When you’ve paid back what you’ve used on your line of credit, it will replenish to its full amount.
A bank will typically look at your credit score, annual revenue, time in business, and outstanding debt during the underwriting process for a business line of credit. Banner Bank business lines of credit come with a one-year maturity term and a variable rate tied to the prime rate.
4. Equipment Loan
Banner Bank offers loans for when you need to purchase equipment for your business. This could be anything from fridges for a restaurant to medical devices for a doctor’s office.
A lender will usually provide for most if not all of the equipment’s price, and you’ll pay them back in monthly installments, plus interest. Banner Bank offers up to seven-year terms on equipment loans, and either fixed or variable interest rates.
With an equipment loan, the equipment itself acts as collateral, meaning if you default on your loan payments, the lender can seize the equipment as recompense. The benefit here is that you won’t need to provide any additional collateral. Most businesses can qualify for an equipment loan, and applications can be processed within a matter of days.
5. Commercial Real Estate Loans
Commercial real estate loans are used for the purchasing or renovation of commercial property. The property purchased or improved with the proceeds of the commercial real estate loan will, in turn, act as collateral for that very loan. Banner Bank offers five different types of commercial real estate loans. They are as follows:
Owner-Occupied Real Estate Loan
An Owner-Occupied Real Estate loan is designed for buying a property your business will occupy or for improving a property your business already occupies. Banner Bank offers up to 10-year terms on an Owner-Occupied Real Estate loans with either a fixed or variable interest rate, depending on your business’s credentials.
Home Builder Construction Financing
A Banner Bank Home Builder Construction Financing loan provides access to capital to developers looking to purchase property and build single family housing. Banner Bank can connect prospective borrowers with commercial real estate managers in Washington, Oregon, California, Idaho, and Utah, who will review the details of each project and negotiate terms. Typical loan amounts are between $3 and $10 million. Larger loan amounts are considered on a case-by-case basis.
Income Property Construction Financing
Banner Bank’s Income Property Construction Financing loans provide funding to developers looking to construct a variety of different types of income properties, including office space, warehousing, retail space, and multifamily housing. Loan amounts range from $3 to $10 million, and can have either a fixed or variable interest rate, depending on the borrower’s qualifications. Local commercial real estate managers will negotiate the terms of your loan based on the particulars of the project.
Income Property Permanent Financing
The Income Property Permanent Financing loan is designed for the maintenance and upkeep of income properties. This loan ranges between $3 and $10 million, and can have either a fixed or variable interest rate. Local commercial real estate managers determine the terms of each loan.
Multifamily Permanent Financing
The last of Banner Bank’s commercial real estate loans is the Multifamily Permanent Financing loan. This type of loan provides capital for: The purchase or refinancing of five or more residential units on a single parcel, multifamily mixed use housing (at least 20% commercial), properties with at least 90% occupancy at closing, and stabilized properties in major metropolitan areas in select states in the western United States.
Loan amounts are typically between $3 and $10 million, and have hybrid three-, five-, seven- and 10-year fixed terms, amortized and due in 30 years. This means you’ll pay a fixed interest rate for up to the first 10 years of the loan, followed by an adjustable rate for up to the next 20 years.
6. Agriculture Loan
Banner Bank has been lending to farmers, ranchers, dairymen, and other agribusinesses since it opened its doors in 1890. Banner Bank’s Agriculture Loans provide funding for crop production, wine production, equipment financing, seasonal downturns, and a variety of other agricultural needs. Generally, Banner Bank’s agriculture loans have one-year terms. However, Banner Bank says they will evaluate each loan on a case-by-case basis.
7. Merger and Acquisition Financing Loan
A Banner Bank Merger and Acquisition Financing loan is designed for purchasing an existing business, buying out a business partner, or bridging short-term requirements during an expansion. Banner Bank offers up to 7-year terms on Merger and Acquisition Financing loans, with either fixed or variable interest rates, depending on the qualifications of each business involved.
In general, business acquisition loans are notoriously difficult to qualify for, due to the fact that the financial history of multiple businesses are scrutinized.
8. Municipal Loan
A Banner Bank Municipal Loan provides funding for general obligation bonds, bond redemption, special assessment bonds, and other needs that help municipalities foster economic growth. These loans are available to cities, towns, counties, and special purpose districts (fire departments, school districts).
Banner Bank doesn’t go into specifics on their Municipal Loan program, but they say they offer “competitive rates, terms, and repayment schedules.” They also promise the underwriting process will be done locally “with a consultative approach to structuring and terms.”
9. Quickstep Loan
Banner Bank’s Quickstep loan allows approved business owners to access capital within two days of when they submitted their application. The different types of Quickstep loans are as follows:
- Unsecured five-year term loan for up to $250,000 with either a fixed or variable interest rate.
- Unsecured three-year maturity term line of credit for up to $500,000 with either a fixed or variable interest rate.
- Secured five-year term loan for up to $1 million with either a fixed or variable interest rate.
- Owner-occupied real estate loan for up to $1 million with either a fixed or variable interest rate and up to a 20-year term.
Other Business Services From Banner Bank
In additional to their loan options, Banner Bank also offers a suite of business banking services, including:
- Online Banking: View balances, transfer funds, make payments, access reporting, and process ACH and wire transfers all from an online portal.
- Checking and Savings Accounts: Banner Bank offers three different types of business checking and savings accounts, each.
- Business Mastercard Credit Card: Account holders can choose between a no fee business credit card and a business credit card with a rewards program. Banner Bank also offers a tool to help you manage all your credit cards and arrange payments.
- Financial Planning and Investment Services: Work with Banner Bank’s team of consulting professionals to help maximize returns on your investments.
- Merchant Services: Work with Banner Bank to set up a point of sale and credit card processing for your small business.
Alternatives to Banner Bank Business Loans
As we said before, not everyone will qualify for a loan from Banner Bank. Banks in general are highly risk-averse. There are a myriad of reasons loan applications get rejected: You haven’t been in business long enough, you don’t have a high enough annual revenue, or your credit score isn’t good enough.
If this sounds like you, don’t worry. There are plenty of alternatives to brick-and-mortar banks in the online lending space. These lenders are just as reputable, but tend to have easier qualification standards. The catch is that online lenders may issue loans with higher interest rates to compensate for their lower eligibility standards. If this is something you can stomach, consider these alternative loan options.
Business Line of Credit From Kabbage
Kabbage is a leader in the online lending space, and offers lines of credit ranging from $2,000 to $250,000. Depending on your qualifications, repayment terms range from six months to one year, with an initial interest rate between 1.5% and 10%, followed by a fixed 1% interest rate after your first two to four months.
To qualify for a Kabbage line of credit under $100,000, you should generate at least $50,000 in annual revenue, be in business at least one year, and have a minimum credit score of 550. Getting approved for a Kabbage line of credit can take as little as one day. Once approved, you can access your line of credit and make payments via Kabbage’s digital platform.
Term Loan From Fundation
If you’re looking for a long-term loan at an affordable rate, consider Fundation. With Fundation, you can get a loan between $20,000 and $350,000 with repayment terms ranging from one to four years. Depending on your qualifications, interest rates can be as low as 7.9% or as high as 28.9%.
Minimum qualifications for a Fundation term loan of less than $200,000 include at least $100,000 in annual revenue, a personal credit score of 660, and at least one year of time in business.
Equipment Financing From Balboa Capital
Financing equipment with Balboa Capital is an easier process than going to a bank because their eligibility requirements are more lenient. In general, to qualify for equipment financing with Balboa Capital you need to be in business only one year, have an annual revenue of at least $100,000, and a credit score of at least 560.
If you meet these qualifications you could get approved for an equipment financing loan between $2,000 and $500,000 with a two- to five-year repayment term and an interest rate ranging from 3.99% to 25%. Even better, you don’t have to provide a personal guarantee to secure a loan from Balboa Capital. Instead, you can use a corporation-only guarantee, meaning only your business’s assets can be used as collateral if you default on the loan.
Note that Balboa Capital equipment financing program is technically a lease, not a loan. This means Balboa owns the equipment and you pay them for using it over the course of the loan, then buy it from them when the term of your loan is up.
SBA Loan Through Fundera
Fundera helps expedite the process for small business owners looking to acquire an SBA 7(a) loan under $350,000. When you go through Fundera, you’ll work directly with one of our SBA loan specialists to collect and prepare all the paperwork needed to apply. Fundera will then route your application to one of our SBA lending partners, who will underwrite your file and audit your documents. The entire process can take as little as three weeks, compared to working directly with a bank, which can take up to four months.
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from Fundera Ledger https://www.fundera.com/blog/banner-bank-small-business-loans/
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