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Pricing: rates and conditions
With Truist, you can apply for an SBA 504 loan, an SBA 7(a) loan, and an SBA Express loan.
An SBA 504 loan is best suited for business owners who need long-term financing to purchase commercial real estate, cover start-up costs, or for construction and renovation. You are not required to contribute as much equity with a 504 loan as compared to the other conventional SBA business loan. You can borrow up to $10 million, and Truist’s SBA 504 loan repayment terms last up to 25 years. The interest rate of this loan is fixed.
An SBA 7(a) loan is for growing business owners who need financing for a variety of reasons, from purchasing inventory to using the funds for additional working capital. You can borrow up to $5 million, and repayment terms are five to seven years for working capital and up to 25 years for home loans. Capital and equipment loans have terms up to 10 years.
The SBA Express loan, or line of credit, is for small business owners who need quick access to cash. These loans require less documentation from borrowers and have a faster turnaround time. It requires less down payment than conventional business loans and has repayment terms of up to 10 years. You can borrow up to $250,000.
The SBA backs most of these small business loans, allowing Truist to offer borrowers lower down payments, longer loan terms, and competitive rates.
Truist offers short and long term loans with fixed or variable interest rates and variable repayment terms. These loans are eligible for small businesses that are financially sound and need cash to finance a specific project. Depending on the amount you borrow, terms can last for 20 years.
Truist offers 100% financing for small business equipment, helping you preserve your cash flow. You can fund between $250,000 and over $50 million. Rates can be fixed for the entire duration of the lease. There are little or no closing costs. At the end of the lease, you have the option of purchasing the equipment. Here are some of the items and equipment you can finance:
- Cars, trucks and vans
- Computers and other technologies
- Construction equipment and heavy machinery
- Industrial machines and tools
- Medical equipement
- Office equipment, furniture and fittings
SBA Export Working Capital Loans
Truist can help you enter a new export market or expand into an existing one with its SBA Export Working Capital loans and SBA Export Express programs. Truist has a team of experienced trade finance specialists, offers competitive rates and offers flexible financing terms.
Truist offers traditional lines of credit, other than the SBA Express option, for business owners who need access to cash for a short period of time. Lines of credit are designed for short-term uses, such as building inventory to meet peak demand or to supplement your working capital. With the Truist line of credit, you are pre-authorized to borrow up to a set amount. The money is secured by your business assets. The bank has an unsecured option if you meet certain conditions. Interest only accrues on the money you withdraw from your line of credit.
Truist is a traditional bank; therefore, its application process differs from that of many alternative lenders we have reviewed. The bank does not have an online application. You can either call Truist to apply or visit a branch. That’s not a bad thing when applying for an SBA loan. This is not overnight financing like you can get from an alternative lender like Rapid Finance.
To qualify for an SBA small business loan, you must meet certain conditions depending on the loan. Here are the criteria you will need to meet for SBA-backed loans from Truist:
- Operate as a for-profit business in the United States
- Have a tangible net worth of $15 million or less
- Have an average net income of less than $5 million after federal income tax for the two years preceding your application
- Operate as a for-profit business
- Qualify as a small business, as defined by the SBA
- Operate in the United States
- Have a reasonable amount of invested equity
- Used alternative financial resources, including personal assets, before seeking financial assistance
- Demonstrate a need for the loan proceeds
- Use funds for sound business purposes
- No defaults on existing debt obligations to the US government
SBA Express Loans
- Operate as a for-profit business
- Operate in the United States
- Be in business for at least two years
- Qualify as a small business under SBA size standards
- Demonstrate a need for financing
- Have funded the business through alternative means
- Able to demonstrate that the funds will be used for sound business purposes
- Not be in default of payment of its debts to the federal government
For SBA 7(a) loans, the SBA does not require collateral if the loan is less than $25,000. For loans over $350,000, the SBA encourages the lender to secure as much as possible up to the total loan amount. For SBA express loans, no collateral is required. This is at the discretion of the bank.
Time until deposit
The time between applying for an SBA loan and receiving funding can be several weeks. It is not uncommon to wait eight weeks in some cases. Express Loans are processed faster, but loan amounts are capped at $250,000. If you need money fast, an SBA loan is not for you.
Since the SBA guarantees a large portion of the loan, it wants to know who it is lending to. Expect to provide the following documents about you and your business, including:
- A personal history statement (SBA Form 912)
- A personal financial statement (SBA Form 413)
- Personal records of past loans you have applied for
- Names and addresses of all your subsidiaries and partners
- CV for all business leaders
- Company overview and history explaining why you need an SBA loan
- Business Financial Statements
- An up-to-date profit and loss statement within 90 days of your request
- Additional profit and loss tables for the last three years
- Business records of loans you have applied for
- Three years of signed business and personal tax returns for all company officers
- Business certificate and license
- Copy of leases or deeds of ownership
- Projected financial statements
- One-year projection of revenues and finances
- A written plan that explains how you will achieve the revenue projections
If you’re interested in an SBA loan, you want to work with a lender that has experience and a proven track record, and that’s where Truist comes in. It is an SBA Preferred Lender, which means it has a demonstrated commitment to providing quality service.
Truist offers several different types of SBA loans that we like, and it gives you the option to work with an advisor. If you want to borrow for an export business, they have an experienced team of trade finance experts.
We also like that Truist offers non-SBA loans. This helps ensure that whatever your financing needs, Truist has a loan option for you.
For time-pressed small business owners, Truist’s traditional approach to lending may not be appealing. There is no online application, same day financing or instant quote. You have to build a relationship with a Truist advisor, which takes time. If you need immediate funding, Truist may not be right for you.
Additionally, you should be prepared to provide significantly more documentation for an SBA loan with Truist than if you were seeking a loan from another lender. However, if you’re not pressed for time and can endure what can be an exhaustive approval process, you may end up with a loan that has much more favorable terms.