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Wells Fargo Business Loans Review of 2023

A traditional lending experience with three credit line options

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Wells Fargo

Wells Fargo

Our Take

Wells Fargo has had some challenges in recent years, but it’s still one of the largest, most enduring financial institutions in the nation. As such, if you have a banking relationship with Wells Fargo and are seeking a traditional small business lending experience, its lines of credit options are worth exploring. You may find the requirements to be a bit more stringent than some other lenders, but fees and rates are competitive. For term loans, though, you’ll have to look elsewhere.

  • Pros and Cons
  • Key Takeaways
  • Company Overview
Pros and Cons
Pros
  • Earn rewards on your line of credit

  • Line of credit options for all levels of business

  • Good choice if you prefer in-person assistance

Cons
  • Wells Fargo business term loans are no longer available

  • Ability to apply online is limited

  • Credit requirements are relatively strict

Key Takeaways
  • Wells Fargo offers three lines of credit and SBA loans for small businesses seeking lending products.
  • With Wells Fargo, you can expect more of a traditional business loan experience that involves phone or in-person communications, and a slower process than what digital lenders may offer.
  • If you’re looking for term loans, Wells Fargo does offer SBA financing.
  • You need good credit, an established business, and a personal guarantee in order to qualify for most Wells Fargo business lending products.
Company Overview

Wells Fargo has a long history. It was founded in 1852 by Henry Wells and William G. Fargo in San Francisco. Today, it’s the 4th largest U.S. commercial bank by assets with about 4,600 branches across 36 states and Washington, D.C, and over $1.6 trillion in assets as of June 30, 2023. Wells Fargo offers a full suite of personal and business financial services, from checking and savings accounts to credit cards to mortgages and loans. After being involved in financial scandals and lawsuits in the 2010s, the company is trying to restore its reputation and improve its customer service.

  • APR Range Prime + 0.50% to Prime + 9.75%
  • Loan Amount $5,000–$150,000 for unsecured lines of credit; $100,000–$1,000,000 for Prime (secured) line of credit
  • Loan Terms Not disclosed
  • Annual fee $95 or $175 for business line of credit, depending on line amount; waived the first year
  • Recommended Minimum Credit Score 680
  • Origination Fee 0.50% origination fee for secure line of credit
  • Late Fee $25–$50

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.
  • 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: 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 between $2 million and $10 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.

Smaller lines of credit can apply online: If you're looking to apply for a line of credit of $100,000 or less, you can apply online. Otherwise you'll need to go to a branch.

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 scandals, legal trouble, and lawsuit payouts. It also ranks last in J.D. Power’s 2022 Small Business Banking Satisfaction Study.

In 2022, Wells Fargo was fined $3.7 billion by the Consumer Financial Protection Bureau (CFPB), which alleged mismanagement of auto loans, mortgages, and deposit accounts. This mismanagement involved a whole host of negative behaviors, including unlawful repossession of vehicles, incorrectly crediting loan payments, charging inappropriate or unlawful fees, unlawful freezing of accounts, and improperly denying mortgage modifications.

Applying for a Wells Fargo Business Loan

Applications for a Wells Fargo business line of credit can be done online or in the branch. However, to apply online your desired line of credit must be $100,000 or less.

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.

Alternative Business Loan Lenders

Kapitus OnDeck Bluevine
LOC Amount Up to $250,000 Up to $100,000 Up to $250,000
Loan Terms Not disclosed 12 to 24 months 6-12 months
Recommended Minimum Credit Score 650 625 625

Final Verdict

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 between $2 million and $10 million in annual sales for the Prime line of credit.

Article Sources
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