Frequently Asked Questions

• How do I apply for a small business loan or lease?
• How can I obtain funding to start up a new business?
• Should I choose a loan, a line of credit or a lease?
• Should I choose a fixed or variable interest rate?
• How can I reduce my monthly term loan payments?
• What kinds of businesses benefit most from leasing?
• What are the benefits of leasing equipment or vehicles rather than financing with a term loan?
• What is a Small Business Administration (SBA) loan?
• Is Small Business Administration (SBA) financing right for me?
• What do I need to apply?
• What will my interest rate be?
• What will my monthly payment be?
• What are the terms?
• How can I receive information on the various credit products?
• Once approved, how do I access my funds?
• What will my closing costs be?
• Will I need to personally guarantee the credit request?
• Can I have my payment automatically debited from my checking account?
• Will I pay any interest on my line of credit with a zero balance?

You can apply by visiting your local banking center.

There are several ways to obtain the funding you need including the equity in your home. Once you determine how much you'll need, you can go to Small Business Administration (SBA) to find out about the types of SBA government-guaranteed start-up loans that are available. Then visit one of our local banking centers to explore your options.

• A term loan provides financing for capital expenditures such as fixed assets and other equipment needs which are regularly amortized over a period of years (e.g. 1 to 5 years).
• A line of credit gives you the flexibility and convenience of easily accessing funds whenever you need them for short term financing needs, without having to apply for a new loan.
• A lease can provide you with vehicle and equipment financing along with some additional benefits that a loan or line of credit can't provide (please consult with your tax advisor).

The purpose for which you intend to utilize the funds will also help you decide which to choose. For instance, a line of credit is the perfect solution for funding short-term operating capital needs. On the other hand, a term loan or a lease is a much better financing solution than a line of credit for acquiring business equipment or vehicles.

• A fixed interest rate provides the security of knowing what your interest rate and payment will be throughout the life of your loan.
• A variable interest rate loan may give you a lower rate and payment amount initially, with a chance that the rate and payment amount may rise or fall in the future.

Extending the number of months you take to pay off a term loan will lower your monthly payment. However, it will take you longer to pay off the debt and your total borrowing cost may be higher. Also, the type of collateral you pledge to secure your loan may impact the interest rate. If you're acquiring business equipment or vehicles, a lease may also reduce your monthly payments without extending the term (please consult with your tax advisor).

Virtually all businesses have equipment that can be leased. In general, you can lease any business equipment or vehicles you use to generate revenue or increase operating efficiency. The types of businesses that most often benefit from leasing include manufacturing companies, transportation companies, printing companies, and professional corporations, such as doctors, attorneys or accounting firms.

Leasing works well for these companies because they can keep their equipment current without having to dip into capital. Since the capital isn't being used for equipment, the business can use that capital elsewhere for business development and expansion.

The one benefit of leasing that small businesses most often cite is increased cash flow. Because leasing typically requires little or no down payment and can often have lower monthly payments than a term loan, cash flow, or capital retention, is the most popular benefit. Another cash flow benefit is that a lease may give you a bigger tax write-off immediately (please consult with your tax advisor).

Depending on your business and the type of lease product you choose, the entire lease payment might be fully tax-deductible as a business expense, thereby reducing your taxable income. We suggest that before you decide on financing, you consult your tax advisor.

The SBA is a federal agency that helps established businesses grow and helps new businesses get started. Bank of America participates with the SBA in making loans. The SBA Express loan is the primary lending program.

An SBA loan may be the solution for you if your business is growing quickly and you cannot qualify for conventional financing at reasonable terms.

This information varies depending on the credit product you are requesting. To learn what information you will need, select the "What You Need to Apply" button on a product's specific Web page.

Many factors are considered in determining the interest rate for your credit request such as the product type, your credit history, your overall relationship with the bank, and the product for which you're applying. You will be notified of your rate once approved.

Your monthly payment will depend on the type of credit you are requesting and the interest rate option, whether fixed or variable.

Terms will vary depending on the product you request. Once your application has been completed and processed, you will be notified of your terms.

To learn more about a credit product, see the loans, lines, and leasing area of our Web site

If approved, a Bank of America representative will inform you at the time the approval is communicated to you of the different methods to access your funds after loan documents are signed. These methods vary depending on the credit product.

Closing costs will vary depending on the type and size of your credit request. If approved, a Bank of America representative will inform you at the time the approval is communicated to you of your credit terms and conditions. Real estate approvals will have additional vendor related closing costs communicated at the time of closing.

Personal guarantees are typically required for business owners. Exceptions can be made depending on the type of entity or other additional factors.

Yes. You can set up your payment option during the loan closing process.

No. Interest will only accrue on outstanding balances.