Wells Fargo Business Loans
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Expert take
It’s surprising that such a large brick-and-mortar bank as Wells Fargo doesn’t offer term loans, except through SBA financing. But the third-largest national bank does an excellent job of providing flexible SBA loan options in addition to three business lines of credit.
You’ll need good credit and at least two years in business to qualify for most Wells Fargo business lending options. As you might expect, you’ll find a more traditional business loan process with slower funding times than most online banks offer.
Pros
- Competitive interest rates
- Business line of credit rewards program
- Leading SBA lender
Cons
- No longer offers business term loans
- Strict credit requirements
- Low credit line limits for unsecured financing
Vault’s Viewpoint on Wells Fargo Business Loans
Wells Fargo is known as one of the “Big Four Banks” in the United States (Bank of America, Citi and Chase are the others). This popular brick-and-mortar operates over 4,000 branch offices in the United States, and you may need to set up an appointment at your local branch office to apply for a business loan. You can bypass the in-person appointment and apply online if you’re an existing Wells Fargo checking or savings account holder for one year.
Wells Fargo’s business lines of credit and SBA loans are an excellent option for established business owners. For example, the Wells Fargo Prime line of credit offers larger funding amounts up to $1 million for eligible companies with revenue between $2 million and $10 million.
Wells Fargo doesn’t disclose its eligibility requirements for all of its products, but your business must be operating for at least two years to qualify for its Prime and BusinessLine lines of credit. Wells Fargo is also an SBA Preferred Lender, which means it’s authorized to make some approval decisions, which could accelerate the processing time.
On the other hand, Wells Fargo business financing may not be the best option if your company needs fast funds. Funding times for credit lines could take up to two weeks, with SBA options taking up to 90 days or longer to process, underwrite and fund.
About Wells Fargo
Wells Fargo business lines of credit can range from $10,000 to $1 million depending on the type of line of credit. The lender also offers three SBA loan options ranging from $5,000 to $10 million. You can choose from secured or unsecured business lines of credit. If you opt for unsecured business loans, you may be automatically enrolled in a free rewards program.
Wells Fargo doesn’t offer as many business financing options as some of their competitors, and it no longer offers business term loans. Still, its portfolio is sufficiently robust and offers competitive interest rates and repayment terms. But you’ll need strong credit and several years in business to qualify.
Compare Wells Fargo’s business lines of credit and SBA loan products to help determine which option may best suit your company.
| Prime Line Secured Line of Credit | BusinessLine Unsecured Line of Credit | Small Business Advantage / SBA Line of Credit | SBA 7(a Loan | SBA 504 Loan | |
| Loan amount | $100,000 to $1 million | $10,000 to $150,000 | $5,000 to $50,000 revolving credit line | Up to $5 million | Up to $10 million with the potential for an additional $5 million from the Certified Development Company |
| Fees | 0.50% origination fee of line amount | $95 annual fee for lines up to $25,000. $175 annual fee for lines over $25,000. First-year fee waived. Cash advance fee up to 4%. | No annual fee or cash advance fee. | Not disclosed | Not disclosed |
| Minimum credit score | Undisclosed | 680 | 680 | Varies | Varies |
| Term | 1 year | Revolving | 5 years | Varies from 10 to 25 years. | Varies from 10 to 25 years. |
| Repayment schedule | Monthly | Monthly | Monthly | Monthly | Monthly |
| Funding speed | Up to two weeks | Not disclosed | Varies. Funding times for SBA loans range from 45 to 90 days | Varies. Funding times for SBA loans range from 45 to 90 days | Varies. Funding times for SBA loans range from 45 to 90 days |
| APR | As low as prime + 0.50%. 5% minimum floor rate | Prime rate plus between 1.75% and 9.75%, depending on credit | Prime rate plus between 4.50% to 6.50%, depending on credit | Varies | Varies |
| Loan availability | Available in all 50 states | Available in all 50 states | Available in all 50 states | Available in all 50 states | Available in all 50 states |
Who Is Wells Fargo Business Loans Best For?
Wells Fargo business loans may be a good fit for:
- Businesses seeking SBA loans: Wells Fargo is a leading originator of SBA loans. It’s also an SBA Preferred Lender. As such, it’s authorized to make final approval decisions rather than waiting for the SBA to do so, which can speed up the timeframe for processing your loan application.
- Established companies: Businesses must have at least two years of operations under their belts to qualify for Wells Fargo’s two credit lines. The bank’s SBA financing options, including the Small Business Advantage line of credit, may have less stringent minimum time-in-business requirements.
- Business looking to earn rewards: Business owners who take out a Wells Fargo unsecured business line of credit are automatically enrolled in the Wells Fargo Business Line Rewards program. Every dollar spent on qualified purchases using a Mastercard access card earns one rewards point.
Who Should Consider an Alternative to Wells Fargo?
Wells Fargo offers some of the best business lines of credit and SBA loans available. But with any financial product, consider the drawbacks of Wells Fargo’s business financing options before proceeding. These options may not be beneficial for:
- Companies needing fast funding: Wells Fargo’s lines of credit could take up to two weeks to process, which is common among traditional banks. By contrast, online banks generally fund business loans much quicker, with many providing loan funds within a few business days.
- Companies looking for non-SBA business term loans: Wells Fargo doesn’t offer business term loans outside its SBA options.
- Businesses with bad credit: You’ll need a credit score of at least 680 to qualify for Wells Fargo’s unsecured lines of credit. The bank doesn’t disclose its credit requirements for its SBA 7(a) and 504 business loans, but the lenders commonly look for minimum credit scores of at least 640.
How Does Wells Fargo Stack Up to Its Competitors?
Several traditional and online lenders offer business financing options similar to Wells Fargo’s. Here’s how Wells Fargo compares to its competition.
Wells Fargo Business Loans vs. Chase
Chase is another national bank that offers a line of credit in a range of amounts from $10,000 to $500,000. By comparison, Wells Fargo offers the same baseline credit limit, but tops out at $150.000. And unlike Wells Fargo, Chase offers term business loans from $5,000 to $500,000. Chase’s term loans and lines of credit could be a good fit for eligible businesses looking for small or large amounts.
Chase also doesn’t disclose its interest rates for business loans online, and you can’t apply for a business loan online. You’ll need to speak with a loan representative at a branch office to apply for a loan and see what terms you qualify for. Its term loans offer a few different funding options. You can receive a lump sum of money upfront, draw funds for up to one year or get pre-approved for a “commitment amount” and draw against it for up to one year.
Like Wells Fargo, Chase is an SBA Preferred Lender that offers SBA 7(a) and SBA 504 loans through the U.S. Small Business Administration. These loans are available for up to $5 million with terms ranging from 10 to 25 years at fixed or variable rates.
Wells Fargo Business Loans vs. Funding Circle
Funding Circle offers several types of business loans, including term loans, lines of credit and SBA 7(a) loans. SBA loans offer some of the most favorable loan options for eligible small businesses, but funding can take up to 90 days, regardless of which lender you use. With its other business financing options, Funding Circle, like most online banks, typically funds loans much faster than traditional banks.
For example, Funding Circle can preapprove your term loan or credit line in minutes without impacting your personal credit score. Upon final approval, you may receive funds in as few as two days, while the funding process could take up to two weeks with Wells Fargo.
While Funding Circle doesn’t disclose many details about its business line of credit, its term loans are quite flexible, with loan amounts ranging from $25,000 to $500,000 and repayment terms from six to 84 months. As with Wells Fargo, Funding Circle is looking to lend to businesses that have been in operation for at least two years, but its minimum annual revenue requirement is only $50,000, which is significantly lower than many other lenders.
Wells Fargo Business Loans vs. Fora Financial
Fora Financial is another online lender that may be suitable for business owners with less-than-ideal credit. Fora Financial works with borrowers with credit scores as low as 570, but you’ll need a higher credit score to qualify with Wells Fargo. Either way, you’re more likely to secure lower rates and more favorable terms with a higher credit score.
This online lender offers short- and long-term small business loans with repayment terms ranging from a few months to 25 years. Similarly, businesses looking for extra capital can find credit limits between $5,000 to $1.5 million. In this case, Fora Financial can meet larger financing needs than Wells Fargo’s $150,000 credit line limit.
And if you need more capital during your loan term, you may be eligible to boost your loan amount after you’ve lowered your original loan balance by 60%. These benefits are one reason why Fora Financial is often named among the best unsecured business loans online.
Fora Financial also beats Wells Fargo’s funding time, claiming to fund working capital within 24 to 72 hours. For its part, a Wells Fargo credit line could take up to two weeks to fund. But Fora Financial doesn’t offer SBA loan options, whose favorable rates and terms make them one of the best business debt consolidation loans.
Frequently Asked Questions
What is the Interest Rate on Wells Fargo Business Loans?
Wells Fargo doesn’t disclose its current rates except to provide the formula for its lowest available rate. Its lowest rate for the Prime Line Secured Line of Credit is the prime rate plus 0.50%, which never declines below a 5% floor rate. The rate for Well Fargo’s BusinessLine Unsecured line of credit falls between prime rate plus between 1.75% and 9.75%, depending on your personal and business creditworthiness. Finally, the Small Business Advantage line of credit has APR, which includes the prime rate plus between 4.50% to 6.50%. Wells Fargo’s disclosures list its prime rate at 8.50%, as of 7/27/23, which the bank notes is subject to change.
Is Wells Fargo a Preferred SBA Lender?
Yes, Wells Fargo is a Preferred SBA Lender, which means it offers a more streamlined loan process that could save you time over other SBA lenders without this designation. SBA Preferred Lenders can process loans faster because they have the authority to make underwriting decisions on their own. In contrast, lenders without preferred status must wait for the U.S. Small Business Administration to make key approvals during the underwriting process.
Should I Get a Wells Fargo Business Credit Card Instead of a Loan?
Whether you should get a Wells Fargo business credit card or line of credit may depend on how much money you need to access, what interest rate you qualify for and other factors. With a Wells Fargo line of credit, you may qualify for access up to $150,000 or up to $5 million through an SBA loan option. By contrast, Wells Fargo’s Signify Business Cash Card’s maximum limit is $50,000. With the Signify Business Cash Card, you may save on interest, especially if you can repay debt quickly. That’s because the card comes with 0% intro APR on purchases for 12 months after opening your account. Be aware, however, that once the introductory period expires, the APR reverts to its standard rate between 18.49% and 26.49, which is likely higher than you’d pay with a Wells Fargo business line of credit.
