Running a small business involves a diverse array of factors to consider. From sourcing, manufacturing, marketing, dispatching to funding, BankUnited assists you in all aspects of finance. The area entrepreneurs face challenges in is funding their business.
To help small businesses grow, Banks have special loan programs helping with growth and overall development by backing them up. BankUnited is one such Bank offering small Business Loans.
BankUnited is specialized in offering a wide range of consumer and commercial banking products and services. They provide services to individuals, small businesses, middle-market companies, large corporations, and institutions.
In this article, we shall cover all the information about BankUnited and small business loans. Without further ado, let's dive in!
An Overview of BankUnited's Loans
BankUnited offers SBA loans, also known as Small Business Administration loans. These loans help entrepreneurs to build, expand, and maintain their companies.
With BankUnited, you need not physically go to Banks to complete the procedures. Instead, you can avail yourself of the various small business loans online with a simple application procedure and low interest.
In addition, BankUnited has easier lending criteria as guided by the SBA government guidelines.
Furthermore, BankUnited commits to supporting and boosting the growth and development of small businesses in America.
The SBA loans at BankUnited can assist you with the following:
- Purchasing commercial real estate
- Securing funds for expanding business or for equipment
- Acquiring a business
- Acquiring a franchise
- Refinancing an existing loan
At BankUnited, a team of specialists will guide you to determine the type of goal well-suited for your business.
Types of Loans Offered by BankUnited
You can find three types of loans at BankUnited. Each of the loans helps entrepreneurs with different purposes to grow and develop their businesses. Let's take a look at the three small business loans offered by BankUnited.
SBA 7(a) loan
SBA 7 (a) is a primary SBA loan designed to aid small businesses financially. Moreover, this type of loan can help you finance the vast needs of your business—from real estate to working capital.
Why Should You Choose SBA 7(a) Loan?
- This small business loan has long repayment terms, thereby reducing monthly payments.
- Finances small businesses from several industries: manufacturers, hotels, gas stations, convenience stores, restaurants, assisted living facilities, and daycares.
- It expands the business by freeing up cash.
- You can avail of loans up to $5 million.
- The turnaround time for the loan is 5 to 10 business days.
SBA 504 Loan
SBA 504 Loan backs up funds for commercial real estate. This small business loan is ideal for long-term needs. For example, you can take a loan for purchasing heavy equipment, constructing, renovating, and making the necessary changes to your facilities. These fixed assets promote business growth and job creation.
Moreover, this type of loan is a boon compared to a conventional business loan as it has lesser equity.
Why Should You Choose an SBA 504 Loan?
- You will have long repayment terms. Hence, monthly payments reduce.
- BankUnited offers multiple rate options. Long term fixed rate is also an option.
- This small business loan finances associated fees and soft costs.
- It expands your business and frees up cash flows.
- You can use a 504 loan to improve or modernize land, streets, utilities, parking lots, and landscapes.
- You can also use 504 loans to purchase or construct new facilities, machinery, equipment, and existing land or building.
Only a CDC (Certified Development Company) offers 504 loans. BankUnited is a CDC, and hence you can be ensured of dealing with a qualified lender.
By offering USDA loans, BankUnited aims to support rural communities. Individuals from the rural community can avail of the USDA loan for the following objectives:
- Real estate purchases
- Refinance and construction
- Business expansion and acquisition
- Equipment purchase
- Partner buyout
- Franchise financing
Why Should You Choose a USDA Loan?
- The Bank offers longer terms to maximize cash flow.
- It aids rural communities in growing and generating jobs.
- BankUnited provides fixed and variable interest rates.
- BankUnited aims to encourage the development and construction of renewable energy projects such as solar and wind power with the USDA loan program.
- The Bank ensures seamless loan procedures and applications for rural communities.
What Lending Criteria Does the Bank Have?
BankUnited uses lending criteria for small business loans to evaluate the loan applications and determine whether the entrepreneur is eligible.
Here are the lending criteria for each type of small business loan in BankUnited.
SBA 7(a) Loan
An entrepreneur is eligible for SBA 7 (a) loan if their business meets the following criteria.
- The business operates for profits.
- It fits the definition of a small business as defined by SBA.
- The business is operated or is planned to function in the United States or its possessions.
- It has reasonable invested equity.
- The business is funded using personal assets before seeking financial assistance.
- Entrepreneurs can demonstrate a need for a loan.
- The business has a sound purpose, and the entrepreneur uses the funds to fulfill this sound purpose.
- The entrepreneur cannot be delinquent on any existing debt obligations to the U.S government.
Moreover, the additional factors considered in the evaluation include whether the small business generates income, the credit history, where the company operates.
SBA 504 Loan
An entrepreneur is eligible for an SBA 504 loan if their business meets the following criteria.
- The business operates for profit in the United States or its possessions.
- The entrepreneur has a tangible net worth of less than $15 million.
- The business has an average income of less than $5 million after considering deducting the federal income taxes for two years before the application.
- The entrepreneur has qualified management expertise.
- The business has a feasible business plan.
- The business has a genuine purpose, and the entrepreneur has a good character.
- The entrepreneur can repay the loan.
Besides the eligibility pointers mentioned above, BankUnited also evaluates the application based on the credit score.
To be eligible for a USDA loan, an entrepreneur and their small business should meet the following criteria.
- The entrepreneur should be a U.S. citizen or a permanent resident.
- The individual should have a steady monthly income. The principal, interest, insurance, and taxes should be less than 29% of the monthly income.
- No debts should be more than 41% of your income.
- The credit score should be above 680.
- The business demonstrates a minimum of 24 months of dependable income.
- It is a federally recognized Indian tribal group.
- It has an allowable credit history.
- It is a legal entity - individuals, public, and private organizations.
BankUnited's Interest Rates, Fees, and Loan Options
To better understand the small business loans offered by BankUnited, you need to learn about Interest rates, fees, and loan options.
SBA 7(a) loan
- Down Payment: Low down payment — 10% on multipurpose, real estate acquisition and 15% on single-purpose real estate acquisitions
- Financing: Real estate up to 90% financing. For up to 10 years. There is no prepayment penalty
- Loan rates: 6% to 8%
- Refinancing: Up to 25 years; the prepayment penalty is applicable for initial three years on terms greater than 15 years
- Fully amortized and assumable
- Guarantee fees: Paid directly to the U.S. Small Business Administration. Fees amount based on loan/guarantee amount
- Other customary fees also apply
SBA 504 Loan
- Financing: 50% financing if you have a first mortgage from BankUnited. If it is your second SBA 504 mortgage, the financing will be 40%
- Down Payment: The minimum down payment is 10%. In the case of a special use property, it is 15%
- Terms: Fixed and variable rates available
- First Mortgage: Up to 25 years, fully amortized. Many factors determine the Prepayment penalty
- Second Mortgage: Up to 20 years, it is fully amortized. At SBA-guaranteed 504 debenture sale, a fixed rate is determined
- Rates: 2.23% to 2.39%
- All B&I loans are fully amortized
- Repayment terms: Up to 30 years for real estate and improvements. Up to 15 years for machinery, equipment, furniture, and fixtures. Up to 7 years for working capital
- Rates: 1.750% on direct farm operating loans. Rates are based on the Prime lending rate
- Guarantee Fees: One-time guarantee fees of 3%. The guarantee fees are applicable if 3% of the guaranteed principal amount is due to USDA at loan closing
- Other customary fees also apply
The small business loans applications are available on the website. However, for availing of the USDA loan, you need to contact the Bank.
- SBA 7(a) loan: Application form/loan packet
- SBA 504 Loan: Application form/loan packet
- USDA Loan: Contact BankUnited
Summary of BankUnited's Loan Options
BankUnited assists small business loans by providing three types of loans to boost their businesses and further develop them.
The three small business loans are SBA 7(a) loan, SBA 504 Loan, and USDA Loan. These three types of loans provide funds for long-term needs as well as real estate purchases.
BankUnited is one of the most-favored Banks for taking small business loans because of their streamlined and hassle-free process.
Besides taking loans from Banks, there are plenty of options to fund your business. One such method is to lend money from cash groups. With the option of cash groups, businesses can avail cash immediately in case of an emergency.