We are a Full-Service Business Financing Firm with Consultants that
Specialize in Traditional Business Bank Loans
What is a Business Bank Loans
Troy Business Group has an extensive network of Business Bankers throughout the U.S in practically every major bank and a plethora of small and regional banks. These are the people that actually manage the banking relationship within the local branch level. The direct connection between a client of a bank and the traditional banks underwriting department.
Having access to this strong network of Business Bank Loans sets us apart. When it comes down to having true business funding connections. Our clients and prospects will be able to tap into these connections. If bank financing is what they seek and want a warm introduction to one of our bankers.
What are Traditional Business Bank Loans?
Traditional Business Bank Loans are Conventional Business Term Loans funded by Brick and Mortar Banks nationwide to U.S Businesses that qualify for them. The loans are awarded for a specific amount of capital based on key factors about the business including but not limited to the company’s total annual revenue.
Business Bank loan capital could be used to purchase assets or meet specific financing needs. These loans come with a set term attached and are repaid based on a predetermined schedule of monthly principal and interest payments. Traditional Business Bank Loans can be unsecured or secured by collateral, the industry standard is unsecured for up to $500k and most Business Bank Loans for more than $500k may require some security to obtain the loan. Interest rates are generally fixed for the life of the loan. Many banks may also have a minimum amount they want you to apply for, and may not fund term loans under $300,000, preferring to deal with loan amounts of $500,000 or $1 million or more.
Most U.S for-profit based businesses that have been established for a minimum of 3 years with two consistent years of showcasing a profitable company could potentially qualify for a Traditional Business Bank Loan.
Traditional Business Bank Loans are the most often funded banks that provide financing to U.S Businesses that have been around for a minimum of 3 years. The terms one Traditional Business Bank Loans can range from 12 to 60 months the loans paid back incrementally over the fixed period of term. The industry average of what a company would be funded for a Traditional Business Bank Loan is about 15% to 20% of the company’s prior year revenue. In most companies’ cases their immediate past will determine how much banks will advance the company for the future. The loans are based off of a variety of factors including but not limited to the monthly and yearly revenue of the businesses, the years the company has been established, good to great business and personal credit scores for the owners, a company free of liens and judgements and most importantly a business reporting a profit year over year. Most traditional banks want to see that a business is reporting a cash flow ratio of approximately $1.40 in reported profit for every $1 the company has in debt on its books at the current time. This is an industry average cushion required to underwrite most Traditional Business Bank Loan applications. Due to the fact a bank will not approve a loan for a company whereby the loan awarded causes the company’s cash flow ratio to fall below $1.25 in income for every $1 in debt on the books including the newly funded Business Bank Loan. That way even after the company passes all of the other requirements and is awarded a Traditional Business Bank Loan. The businesses will have a comfortable cushion on their debt schedule in order to better carry the banks debt load.
Most traditional banks will report the companies Business Term Loan payments on their tradlines which typically tends to have a positive effect on the companies business credit score. Which can come in handy the next time the company wants or needs to incur business debt. Since all Traditional Business Bank Loan monthly payments include principal and interest unless otherwise specified. Then once the final payment is made the bank will report that information and remove any UCC1 liens the Bank needed to place on the company during the duration of Business Bank Loan.
Traditional bank loans typically have lower interest rates than other financing options like credit cards or short-term loans from online lenders. And you can build your business credit when you make on-time payments from your checking account, unlike personal loans, which won’t directly impact your business credit profile.
There are no surprises as you repay the loan: you’ll know when you sign your loan agreement what your monthly payments will be.
There are many things you can use your business loan for, from stabilizing cash flow to buying equipment or investing in commercial real estate.
Business Bank Loans typically come with very low, fixed interest rates often times the lowest in the industry
Most banks report loan payments for Business Bank Loans to the credit agencies that monitor corporate credit scores. This in turns means paying down a Business Bank Loan with no delays or issues can help to build business credit.
Traditional Business Bank Loans and SBA Loans are two business financing options with the most diversity in terms of how you can use them to grow your business:
Business Bank Loans have a good amount of approved uses for the capital including but not limited to Purchasing inventory, Buying equipment, Investing in commercial Real Estate, Refinancing existing debts, Acquiring business, Maintaining steady cash flow, and Marketing and Branding endeavors.
While requirements to qualify for financing with traditional banks may vary in the details from one lender to another, in general, they look for companies that have been in business a minimum of 3 years, with the company reporting a profit for the last 2 years.
All traditional bank lenders will want to look at the 2 most recent years of the company’s financial statements, including the business bank statements, profit & loss statements, balance sheet, and possibly a business plan to get a sense of your business’ financial health.
A lot of the traditional banks will prefer to fund businesses that are reporting a minimum of $1 million or more in annual revenues.
Most traditional banks prefer to lend to businesses whereby the owners/principals of the company maintain a low personal debt-to-credit ratio. In general, the minimum fico score most banks will lend to is a 680 fico. Traditionally the banks likely need personal credit scores in the 700+ score range.
Most banks will want the company to have a solid business credit score in order to qualify for a Traditional Business Bank Loan. This is on top of the owners/principals of the business needing to have solid credit scores as well.
All banks will expect to see that a business is bringing in a healthy amount of cash flow. Underwriters are going to comb through the company’s business bank account statements to determine if there is a healthy enough average daily balance. In order to qualify for Business Bank Loans companies need to showcase that there is sufficient cash flow to service debt.
In order to qualify for a Bank Business Loan their underwriters are going to need to evaluate the companies’ debt-to-credit ratio. Companies are to need to supply their 2 most recent full years Profit & Loss and Balance Sheet. Including the current year as of the date of application. Companies are going to need to prove that they will have a pro-forma cash flow ratio of $1.25 in profit for every $1.00 in debt on the books including the bank’s newly funded Term Loan to the company.
Finally Banks will want a detailed forward looking business plan to explain the purpose of the loan.
with access to all of the Business Bank Loan options on the market.
Available Capital Limit
From $50k to $1mm
Standard Interest Rates or Cost
Rates Starting at Prime + or Libor +
Typical Underwriting TimeLine
5-10 Business days
Average Term Limits
12 to 60 Month Terms
In closing, Approximately over $600 billion is funded each year in Commercial Bank Loans. That’s several billion more than most developed countries GDP. The average size of all business loans was $680,000 in 2018, according to the Federal Reserve. Every Business has their own reasons why they dive into the lending markets. Some companies need the money to keep the operation moving forward. While others want the capital on hand to thrive and expand. Regardless, a Business Bank Loan is one of the best and cheapest Commercial Lending options for those in the market.
Whether a company wants a business bank loan to purchase inventory or expand the operation. We here at Troy Business Group want to offer our clients and prospective customers with full access to our network of Business Banks and Commercial Banks throughout the nation. If a Traditional Business Bank Loan is a company’s number priority. Then we will work hand over first in order to provide our clients with the best options that they qualify for. Our team at Troy Business Group is ready to provide your company with access to all of the Business Bank Loan options on the market. Please apply online, email us for an appointment, or call us today. Our team is committed to helping your business grow with obtaining a Business Bank Loan and will guide you through the funding process each step of the way.