Commerce Bank Small Business Loans Review

With headquarters in Kansas City, Missouri, and 184 national branches, Commerce Bank serves consumers and businesses located mostly in the Midwest. In fact, Commerce Bank small business loans can only service businesses located in Missouri, Kansas, Illinois, Oklahoma, or Colorado.

That geographical limitation precludes a wide swath of American business owners from applying for business loans with this particular institution, of course. But if you do live in one of these states, there’s good reason to consider Commerce Bank small business loans to finance your venture.

The bank offers business owners several loan types, for starters, all of which are designed to suit a variety of projects. And, because they are a brick-and-mortar bank, Commerce Bank can likely offer qualified borrowers with generous loan terms.

Here’s an overview of Commerce Bank small business loans, as well as other services the bank offers business owners. We’ll also tell you a bit about how to qualify for bank financing in general, so you can better understand whether a bank loan is a truly viable option for your business right now.  

4 Types of Commerce Bank Small Business Loans

Commerce Bank doesn’t publicly provide specific information about their loans, such as their amounts, terms, interest rates, or qualification standards. As is the case with most bank loans, you’ll need to contact the institution directly—either via their secure messaging system, over the phone, or, better yet, by visiting your local branch in person—to understand whether you can qualify for Commerce Bank business loans and, if so, what the general terms might look like.   

Which is all to say that we can’t tell you exactly what your Commerce Bank business loan may look like, as the terms and eligibility standards are dependent on individual borrowers.

The bank does offer a standard array of small business loans, however, so we’ll explain how each of these loan types work, and what needs or projects each are best used for. That way, you can better understand what you can generally expect from your Commerce Bank small business loan.  

Lines of Credit

As Commerce Bank notes on their website, a business line of credit is “like having a business loan in your back pocket.” Like a business credit card without the plastic, a line of credit is a revolving pool of funds that you can dip into whenever you want or need, and in whatever amount is necessary.

You do have a limit on your line of credit, which the banks determines according to your credit score and other information provided on your business loan application. You’ll only need to pay interest on the funds you pull, too, which makes a line of credit ideal to have waiting in the wings so you can cover unforeseen expenses, patch up cash-flow gaps, or jump on unexpected opportunities.

Typically, banks offer business lines of credit between $10,000 and $250,000 with variable interest rates and flexible repayment terms. Depending on your credit, your Commerce Bank line of credit might be eligible for auto-renewal. Commerce Bank also offers SBA lines of credit.

Term Loans

No suite of bank loan offerings would be complete without a traditional term loan. These lump-sum loans are the best tools for financing major, one-time expenses, which you’ll then repay according to a predetermined schedule with a fixed interest rate.

Again, it’s impossible for us to tell you how much Commerce Bank will offer eligible borrowers, and at what terms. Generally, however, most banks provide term loans between $5,000 and $500,000, with five- to seven-year repayment terms and competitive interest rates. Commerce Bank works with business owners to establish individual repayment schedules based on the business’s cash flow and needs.   

SBA Loans

As an SBA Preferred Lender, Commerce Bank can review and disburse SBA loans in-house, which speeds up a notoriously lengthy application and approval process.

As a reminder, the SBA’s foundational mission is to make business funding more accessible to more American businesses. Although the federal agency spearheads several programs to encourage small business creation and growth, SBA loans are their marquee offering.

SBA loans are issued by banks, such as Commerce, but they’re partially backed by the U.S. Small Business Administration—so if a borrower defaults on their SBA loan, the government guarantees that the intermediary lender will reclaim up to 85% of the defaulted amount. With that safety net in place, lenders are more likely to offer SBA loans to more borrowers than conventional bank loans.

SBA loans are not necessarily easy to apply to or qualify for, however, and the SBA loan application requires a good amount of time, paperwork, and back-and-forth between you and your lender. But one of the benefits of working with a bank directly is that they have the in-house staff to help you navigate that process.

The SBA sponsors several loan programs, and Commerce Bank doesn’t specify which in particular they have available, other than a line of credit. However, it’s likely that they offer SBA 7(a) loans, which are the SBA’s most flexible and popular type of loan. SBA 7(a) loan funds can be used for a variety of purposes, including general working capital, debt refinancing, and covering major purchases.

Repayment terms are up to seven years for working capital, or up to 25 years for commercial real estate, with loan amounts extending up to $5 million. SBA loan interest rates are very low, too, as the SBA sets a maximum that the lender can’t exceed.  

Equipment Finance

CBI Equipment Finance, Inc., a subsidiary of Commerce Bank, offers business customers several solutions to help finance the leasing of major equipment. Their six equipment leasing programs can help business owners access both long-term machinery and the technology and tools they’ll need to quickly update.

As a reminder, equipment leasing differs from equipment loans in that the lessee retains the title to the equipment—as opposed to an equipment loan, in which a lender fronts you the cash you need to purchase a piece of equipment, and which you repay according to a set schedule.

In an equipment leasing deal, you’ll pay the lessee a flat monthly fee for the use of that equipment. Typically, the borrower can choose to purchase that equipment at the end of the lease, renew the lease agreement, or terminate the lease.

Additional Commerce Bank Business Loan Products

In addition to the four aforementioned Commerce Bank business loans, the bank also offers borrowers niche credit products that service particular projects or needs:

• Real estate loans: These loans help business owners purchase or finance a range of commercial real estate properties, including income-producing or owner-occupied real estate, and residential development and construction.
  

• Bond financing: Commerce Bank’s bond financing can allow business owners easier access to the funds they need for large-scale real estate or construction projects.
  

• Employee stock ownership: ESOP loans enable business owners to sell the company to their employees when they’re ready to exit the company. Commerce Bank can also help business owners create a succession plan.
  

• International financing: Commerce Bank can offer Documentary Letters of Credit and Standby Letters of Credit for firms that conduct business internationally, like export or import businesses, to protect your interests and offer you greater payment flexibility.
  

• Tax-exempt bonds: Municipalities, 501(c)(3) not-for-profit organizations, manufacturers, and political subdivisions may qualify for this type of financing. Businesses can use these funds, available through Commerce Bank and Clayton Holdings (a non-bank subsidiary), for a range of business-related expenses and their associated fees.     

More Small Business Services From Commerce Bank

Commerce Bank can provide their small business customers with more than just loans. To start, Commerce Bank has two business credit cards on offer: the Business Rewards Card, which gives users 1% cash back on purchases and a bonus point program, and the Business Platinum Card, which features a lower APR and extended grace period.

Commerce Bank also offers several types of business checking accounts to suit businesses of various sizes and needs, and comprehensive payables and receivables solutions that simplify the payment process.  Commerce Bank does have online banking services, too, but this service seems limited to paying bills and accessing digital statements, as well as managing accounts payable and receivables.

And if you’re in a certain industry—such as healthcare, veterinary, manufacturing and distribution, not-for-profits, aviation, and more—then Commerce Bank can work with you to create customized financial solutions.

Are Commerce Bank Small Business Loans Right for Your Business?

Commerce Bank small business loans are designed to solve a variety of financial problems (or, more optimistically, to help owners pursue a variety of business opportunities)—whether you need to cover payroll, open up a second location, lease heavy machinery, export your product overseas, or even sell your company when you’re ready to move on, it’s likely that Commerce Bank can provide the right loan for you. They’ll work with you to design a repayment schedule that’s feasible for you, too. That’s all assuming that you live in one of the five states that Commerce Bank business loans serve, of course (which are Missouri, Kansas, Illinois, Oklahoma or Colorado, as a reminder.)    

You do need to know, however, that bank loans aren’t easy to qualify for. Although Commerce Bank doesn’t publicly provide eligibility standards, they’re likely no exception on this front.

Because they issue such high loan amounts at such generous terms, banks generally only qualify the business owners who pose the lowest risk of default. They’ll determine your relative riskiness based on the information you provide in your business loan application, in which you’ll likely need to include a couple years’ worth of financial statements, a business plan, proof of ownership, and your personal and business credit score, among other data.

What do banks consider a “low-risk” business, you may wonder? For the most part, it’s the businesses that have a few years’ worth of experience under their belts, a low debt-to-income ratio, are profitable, and whose owners have healthy credit scores. The key word here is stable—because the more solid your business is financially, the more likely you are to meet your debt obligations.

Not every small business will be able to meet a bank’s stringent eligibility standards (and in fact, the majority don’t!). If you can’t yet qualify for a Commerce Bank small business loan, or a bank loan from another institution, you still have several lending options.

For instance, online lenders offer many of the same lending products that banks do—like term loans, lines of credit, equipment loans, and even SBA loans—but at much lower barriers to entry and quicker turnaround times. We’d recommend working with a loan specialist to help you shop, compare, and apply for your best options.

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