Wells Fargo Business Loans Review: July 2023 (2024)
Pros Explained
Earn rewards on your line of credit: Wells Fargo’s unsecured business lines of credit offer a rewards program similar to what you’d find on a rewards credit card. You’ll get a Mastercard access card to make purchases from your line of credit and earn 1 point for every $1 spent, which you can use toward travel, gift cards, and other items. You’ll also get 1,000 bonus points for every month you make $1,000 or more in qualifying purchases, plus a 10% points credit when you redeem online (10% of redemption value).
Line of credit options for all levels of business: For newer business owners, those that have been in business for two or more years, or larger organizations with $2 million or more in sales, Wells Fargo has a line of credit product to match.
Good choice if you prefer in-person assistance: As a traditional bank with many locations throughout the U.S., Wells Fargo can offer a more human approach to business lending than you might find with an online lender that is focused on a more digital experience.
Cons Explained
Wells Fargo business term loans are no longer available: The bank used to offer four different business loans (Equipment Express loan, Wells Fargo BusinessLoan term loan, FastFlex small business loan, and Advancing term loan), but they have been discontinued. You can apply for an SBA term loan with Wells Fargo, however.
Ability to apply online is limited: You must be a Wells Fargo banking customer for at least one year in order to apply online. In addition, if you’re aiming for a credit line of over $100,000, you’ll need to call for an appointment at a branch.
Credit requirements are relatively strict: A 680 credit score, which is what Wells Fargo says their borrowers should have, is in the “good” credit range. This leaves out business owners who may have issues with their personal credit. In addition, anyone who is a guarantor on the loan will be held to the same standards.
Types of Business Loans Offered by Wells Fargo
Wells Fargo offers three different business lines of credit products as well as SBA loans.
Unsecured Lines of Credit
Wells Fargo BusinessLine
This line of credit is for businesses that have been operating for at least two years. You can get a $10,000 to $150,000 revolving credit line with rates starting at Prime + 1.75%. There is an annual fee but it’s waived the first year.
Wells Fargo Small Business Advantage
If you’ve been in business less than two years, this is the product for you, with credit lines from $5,000 to $50,000. There’s no annual fee, but you’ll pay a higher rate (starting at Prime + 4.50%).
Secured Line of Credit
Prime Line of Credit
Businesses with more than $2 million in annual sales with larger borrowing needs can apply for this secured line of credit from $100,000 to $1,000,000. It’s backed by your assets such as accounts receivable, inventory, or equipment, and you’ll pay a 0.50% origination fee at account opening and each year.
If you take a Prime Line of Credit, there will be a first-priority lien placed on all present and future accounts receivable, inventory, equipment, general intangibles, and certain other non-cash personal property. That means Wells Fargo is the first debtor to be paid back with collateral, if necessary.
SBA Loans
Wells Fargo offers SBA 7(a) and SBA 504 loans. These small business loans are for businesses with net worth below $15 million and an average net income below $5 million.
Time to Receive Funds
Wells Fargo business lines of credit do take a bit of time to process. For an unsecured line, you’ll have to wait for written notification from Wells Fargo to find out if you’re approved and for how much. For the Wells Fargo Prime Line of Credit, expect the underwriting to take up to two weeks after you submit all of the documents required.
Borrower Requirements
Minimum recommended credit score: 680
Time in business: The Wells Fargo BusinessLine line of credit requires a minimum of two years in business. Newer businesses can apply for the Wells Fargo Small Business Advantage line. For the latter, you’ll also need to meet SBA requirements, which includes having household personal liquid assets below $500,000.
Personal guarantees are required from any owner with 25% or more ownership; the Small Business Advantage line requires the same from owners with 20% or more ownership.
Prime Line of Credit requires businesses to have $2 to $10 million in annual sales.
Wells Fargo Business Loan Features
Secured line of credit available: Wells Fargo Prime Line of Credit utilizes collateral including accounts receivable, inventory, or equipment.
Existing customers can apply online: If you have already been a Wells Fargo bank account holder for a year or more, you can complete your business line of credit application online.
Customer Service
Customer service is available by phone seven days a week. There is no online chat available, but the customer service page has all of the pertinent contact information.
Customer Satisfaction
Wells Fargo has had some reputational challenges including financial scandals, lawsuit payouts, and poor ratings from the Better Business Bureau. It also ranks last in J.D. Power’s 2022 Small Business Banking Satisfaction study.
Wells Fargo has a current government action pending involving its home lending division. That’s after having paid $3.7 billion in penalties in 2022 stemming from a Consumer Financial Protection Bureau (CFPB) action, which alleged mismanagement of auto loans, mortgages, and deposit accounts.
Applying for a Wells Fargo Business Loan
Most applications for a Wells Fargo business line of credit will involve getting on the phone or stopping in to a branch to speak with a loan specialist. However, if you are a banking customer, you can begin the process online.
You’ll need to provide general business information including the date the business opened, your business tax ID, the number of owners, and gross annual revenue. Each owner will have to provide a personal guarantee along with their personal contact information and annual household income.
If you’re applying for a Wells Fargo Prime Line of Credit, you will need to show two years of personal and business tax returns, a personal financial statement, and two years of a company-prepared, year-end financial statement.
Once all of your information is submitted, processing can take a couple of weeks.
Wells Fargo offers business lending products to established businesses that prefer an in-person banking relationship. If you’re looking for a line of credit in particular, there are three options available that cater to most business needs. For term loans, however, Wells Fargo only offers SBA loans. If you meet the lending requirements, you could qualify for favorable rates and terms. Should problems arise, stay on top of them and document everything since Wells Fargo’s customer service reputation is reported to be shaky at best.
What Types of Business Loans Does Wells Fargo Offer?
Wells Fargo offers SBA business loans and business lines of credit.
Is Wells Fargo a Preferred SBA Lender?
Yes, Wells Fargo is a Preferred SBA Lender, offering SBA 7(a) and SBA 504 loans. As a preferred lender, Wells Fargo can approve and process a loan application more rapidly than a non-preferred lender.
Does Wells Fargo Give Business Loans With Bad Credit?
Wells Fargo typically offers business lines of credit to borrowers with 680 or above credit scores, which makes it an unlikely choice for a business loan with bad credit. SBA loans also tend to have good credit score requirements, though specifics are not disclosed.
How Do You Qualify for a Business Loan at Wells Fargo?
Each Wells Fargo business lending product has its own requirements, but to qualify, borrowers usually have to have a 680 credit score or above. You’ll also have to have two years in business if you’re applying for the Wells Fargo BusinessLine line of credit, or have more than $2 million in annual sales for the Prime line of credit.
Wells Fargo Unsecured Business Lines of Credit. Things to consider when preparing to apply for an unsecured business line of credit: Typically, guarantors have a FICO® Score of at least 680 at time of application.
Wells Fargo Unsecured Business Lines of Credit. Things to consider when preparing to apply for an unsecured business line of credit: Typically, guarantors have a FICO® Score of at least 680 at time of application.
If you applied for a Wells Fargo Prime Line of Credit, it will take up to two weeks for processing after you have submitted the required documentation. Your underwriter will provide you with guidance on additional requirements for your business.
Wells Fargo is a Preferred SBA lender and its interest rates on small business loans are generally nationally competitive. Not all details about financing terms for small business loans are available on the bank's website, however, so you should be prepared to call a banker or visit a branch directly.
Yes, the Wells Fargo business credit cards will do a hard pull. You will need a credit score of at least 700 to get a Wells Fargo business credit card, with the exception of the Wells Fargo Business Secured, which is available to applicants with bad credit.
Instead of a personal credit score, the SBA uses the FICO Small Business Scoring Service (SBSS) when evaluating 7(a) loan applicants. The system calculates the business owner's credit bureau data, financials and other factors to produce a number between 0 and 300.
And depending on where you apply for a loan, whether a traditional bank or an alternative lender, there could be many more factors. Tradition banks approve only 27.7% of small businesses for a loan. The main reasons are they consider small businesses high risk and their ROI may not be as strong.
The Wells Fargo credit card approval odds are best for people who have at least good credit (a credit score of 700+). Just keep in mind that the higher an applicant's credit score is, the higher their approval odds are likely to be.
Lenders will want to review both the credit history of your business (if the business is not a startup) and, because a personal guarantee is often required for a small business loan, your personal credit history. We recommend obtaining a credit report on yourself and your business before you apply for credit.
This term loan or line of credit offers fixed or variable SBA loan rates as well as the easiest SBA application process, quick approval times, flexible terms, and lower down payment requirements than conventional loans.
The bottom line: Chase is a better choice for CDs, but Wells Fargo has easily manageable checking options. When it comes to savings accounts, it could be a tight race between the two banks. Chase is on Insider's list of the best national banks. Wells Fargo and Chase are two of the biggest national banks in the US.
Because they're backed by the U.S. government, they're less risky for banks than issuing their own loans. But SBA loans are usually harder to get than online business loans, which may require less time in business and lend to borrowers with lower credit scores.
Can I get a mortgage with an 592 credit score? Yes, your 592 credit score can qualify you for a mortgage. And you have a couple of main options. With a credit score of 580 or higher, you can qualify for an FHA loan to buy a home with a down payment of just 3.5%.
Generally speaking, you'll need a credit score of at least 620 in order to secure a loan to buy a house. That's the minimum credit score requirement most lenders have for a conventional loan. With that said, it's still possible to get a loan with a lower credit score, including a score in the 500s.
Wells Fargo credit card limits aren't particularly high; the minimum credit limit offered is $1,000, though some cardholders have reported receiving starting spending limits as high as $14,000.
It can take anywhere from a day or two to several months to be approved for a line of credit. As a general rule, online lenders are faster than banks, and banks are faster than the SBA. For credit cards, you're looking at seven to 10 days in most cases.
Are you applying for a business loan? Commercial lenders may look at both your business and personal credit scores before they approve your application. If you have poor personal credit and you're wondering if it will affect your approval or the terms of your commercial loan, the answer is yes, it can.
You can borrow $50,000 - $100,000+ with a 700 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
The minimum credit score required for the SBA 7(a) business loan is 650. The 7(a) loan is the most in demand SBA loan program to date. It guarantees small business owners up to $750,000 of working capital from their local 7(a) lender, with a partial guarantee from the Small Business Administration.
Almost all business lenders offer loans in this amount, so you won't be locked out of loan rates based on the loan's size. But you might struggle to qualify for a loan of this size from any lender if your business has been around for less than a year or you have a credit score below 670.
Because of stricter regulations, it's hard for banks to innovate and start using information other than credit scores to determine risk. If you have bad credit, it's much harder to get a business loan from a bank because they don't use all the data that alternative lenders do.
But what happens when your application for a loan is denied? Research that shows the percentage of small business loans that get denied is quite high. Only around 57% of general small business loan applications made to traditional banks are approved, with SBA loans having a 52% approval rate.
Your credit score is too low. Work on managing your credit. If you have missed payments, get up-to-date and stay current. You have too much debt relative to your income.
Wells Fargo has one major rule that applies to all its credit cards -- one welcome offer from any of its cards per 15 months. Welcome offers refer to any special offers that apply during an introductory timeframe, and can include: Sign-up bonuses.
Bank statement lenders will want to verify your bank statements with proof of deposit. Also, they'll likely want details about your account such as account number, balance, and the names on the account.
Yes, it is possible to get a small business loan even if you have bad credit. This is because your credit score doesn't matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue.
The minimum credit score required for an SBA loan depends on the type of loan. For SBA Microloans, the minimum credit score is typically between 620-640. For SBA 7(a) loans, the minimum credit score is typically 640, but borrowers may find greater success if they can boost their credit score into the 680+ range.
There are all sorts of reasons why your loan application may not get through, but some of the more common ones are: You have a low overall personal or business credit score, or a poor credit history.
The main drawback we see with Wells Fargo are the low APYs on most accounts — if you're looking to earn money through interest, this is not the bank for you. Wells Fargo should also be avoided by people who struggle with overdraft fees. The standard overdraft fee is $35 at a max of three a day.
Is Capital One owned by Wells Fargo? Wells Fargo does not own Capital One, but the two financial institutions have some corporate connections. In 1994, Signet Financial Corp. started the company now known as Capital One, and Signet is now part of Wells Fargo.
The main competitors of Wells Fargo are three of the other big four major U.S. banks—JPMorgan Chase, Bank of America, and Citigroup. Combined, these four banks together hold between 40% to 45% of all bank deposits in the country and serve the majority of personal and commercial accounts in the United States.
Ineligible businesses include those engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole.
Some lenders will not lend to companies that operate in certain industries. Some industries are high-risk, so some banks won't lend to companies in real estate, sales, or investing. Other common disqualifying industries include gambling, adult entertainment, dispensaries and cryptocurrency.
Owning a brand-new business is one of the top reasons it's difficult to get an SBA loan. Traditional lenders view funding startup businesses as “risky.” They usually require the business to be at least two years old before they'll consider an approval.
Wells Fargo may carry out a soft or hard credit pull when you submit a credit limit increase request. If there's a hard inquiry, you can expect your credit score to temporarily drop by a few points.
The company doesn't publish a minimum credit score needed for a personal loan, but if you're interested in an unsecured personal loan, you should at least have a credit score between 660 and 749. Wells Fargo bad credit loans aren't unheard of, but if your credit is poor, your interest rate will be much higher.
The Wells Fargo Reflect® Card credit score requirement is 700 or better. That means people with good credit or better have a shot at getting approved for the Wells Fargo Reflect Card.
Some mortgage lenders are happy with a credit score of 580, but many prefer 620-660 or higher. If your credit score is lower, it is advisable to explore different lenders..
Here's the short answer: The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus.
A $250,000 mortgage is relatively easy to find and will be offered by virtually every lender offering home loans. However, you must meet the lender's requirements to be approved for a loan. Most conventional lenders will want a credit score in the mid to high 600s but may go as low as 620.
While some issuers offer cards designed for those with less-than-stellar credit scores, American Express does not offer any subprime or secured cards. In most cases, you need at least good credit to get approved for an American Express card, which FICO typically defines as a score of 670 or higher.
It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.
The minimum credit score required for express loan is 600.
With this type of loan, borrowers will be notified within 36 hours of applying as to whether or not they've been approved. If you are approved, you'll be able to receive the funds within 90 days.
It's possible to get a small business loan with bad credit, but applicants with low credit scores may have a harder time getting approved for traditional loans. What's more, small business owners with bad credit—scores as low as 580—typically can only access high interest rates.
640 to 700: Business loan providers generally consider a credit score that falls somewhere between 640 and 700 to be good but not excellent. Generally, the minimum credit score for SBA and term loans is around 680.
Businesses are ranked on a scale between 101 to 992, with a lower score correlating to a higher risk of delinquency. A good Business Credit Risk Score is around 700 or higher.
It's often not difficult to get a $50,000 or $100,000 business loan if you have good credit and a solid business plan. There are hundreds of lenders throughout the U.S. that can provide unsecured small business loans.
It is possible to get startup business loans with no revenue, profits, cash flow or assets. But just because you can get a business loan with no money doesn't mean it's the best option.
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.
Are There Loans That Accept An EIN Instead Of An SSN? Yes, individuals who are not eligible for an SSN can still get business loans using their EIN through some financial institutions. The process is usually just as easy as applying for a loan with your SSN.
Yes, it is possible to get a small business loan even if you have bad credit. This is because your credit score doesn't matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue.
According to Equifax, a business credit score varies on a scale between 0 – 1200, with 0 is the lowest and 1200 the highest business credit score. As a general rule of thumb, a good business credit score is somewhere between 622 – 725. A very good business credit score is between 726 – 832.
Yes, when you have fair or bad credit (FICO credit score below 669), business loans can be hard to get. You'll need to find lenders that specialize in lending to businesses with bad credit, compare multiple offers to find the most affordable option that fits your needs and be willing to accept more expensive loans.
What is a good credit score for an LLC? A good credit score for an LLC is typically considered to be in the range of 600–800, similar to your personal credit score.
To be eligible for loans and decent credit ratings, this particular score should fall within the 80 to 100 range. Anything lower than that may indicate difficulty with making payments. Businesses within the 0 to 49 range are considered high risk and would dissuade investors or lenders.
Business credit scores have different ranges. The Experian Intelliscore and the D&B Paydex score both start at 0 and go up to 100. Other scores may start at a different number. If your business hasn't established credit, you may have a low credit score or no credit score at all.
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