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How to Get loan from Bank Of America Paycheck Protection Program?

BANK OF AMERICA, the second-biggest lender in the Paycheck Protection Program, is refusing to forgive some small business owners’ loans and blocking them from getting relief directly from the Small Business Administration, which oversees the PPP program.

One of the first forms of aid Congress offered to businesses during the Covid-19 pandemic was PPP loans, which were meant to be forgiven completely if used to cover payroll and other specified expenses.

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Related: Getting the Commercial Loan in USA- Step by Step Guide

But in over a half-dozen interviews and emails with The Intercept, small business owners who got their PPP loans through Bank of America described the same experience: A year or more after they first received their loans, they were told that the bank determined they had originally received too much money and that it would only forgive a portion, leaving them to pay back the remainder with interest. Jose Ramos, owner of Kin-Keepers in Virginia, was told that none of his $67,500 PPP loan would be forgiven.

How to Get a Small Business Loan

If you want to apply for a small business loan with Bank of America, there are a few documents and pieces of information that you will need to provide to the bank as part of your loan application:

  • Business name and street address (no P.O. Boxes)
  • How long your business has been located at the current address
  • Business phone number
  • Business Tax ID (Employer ID Number)
  • What kind of business your company does
  • The date was your business established and how long have you owned the business (To qualify for Bank of America financing, your company needs to have been in business for at least two years, and/or you need to have owned the business for at least two years.)
  • Number of employees
  • Financial data: annual gross sales and net profit
  • Any other small business loans or lines of credit currently owed by the business, including the lender, current balance or credit limit, monthly payments, etc.

Bank of America also requires some personal information from the business owner(s), controlling managers or guarantors, such as their personal names, addresses, Social Security numbers (for U.S. citizens), personal income, monthly housing payments and more.

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Even though your business is taking out the loan, banks will typically want to get a sense of your personal financial stability and creditworthiness. Some small business loans require the business owner to personally guarantee the loan; meaning that if your business fails to repay the money, the bank has a right to demand repayment from your personal assets.

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Types of Small Business Loans at Bank of America

Bank of America offers a few of the most common types of small business loans, including:

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Paycheck Protection Program (PPP) Loans

How to Get loan from Bank Of America Paycheck Protection Program?

The PPP is a program from the Small Business Administration to help small businesses make payroll and keep people employed through the pandemic. Two rounds of PPP funding have been approved by Congress; there are different eligibility requirements for both rounds. Some PPP loan funds are forgivable if the business is able to maintain its employment levels and compensation levels and spends at least 60 percent of the money on payroll costs.

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To get a PPP loan through Bank of America, you need to be a Bank of America business banking customer. If you already received a first draw PPP loan in 2020, you can apply for a second draw PPP loan through your original lender where you got your first PPP loan.

Small Business Term Loan

Bank of America offers a Business Advantage Term Loan, which is an unsecured loan (no collateral required) that your business repays with fixed payments during a specific term of time. With this type of loan, your business receives the loan money as a one-time lump sum. Bank of America’s term loans require your company to have at least two years in business under current ownership and $100,000 in annual revenue. Loan amounts range from $10,000 to $100,000, and loan terms go from 12–60 months. The APR (interest rate) on your loan will depend upon several factors on your loan application, but the rates start as low as 4.75 percent.

Small Business Line of Credit

What if you want a more flexible way to borrow for your business? Instead of getting a term loan, you can apply for a small business line of credit, like Bank of America’s Business Advantage Credit Line. A line of credit works in a similar way as a credit card: you get approved for a certain amount that your business can borrow, and you can borrow as much or as little as you want, up to that credit limit. A small business line of credit is a good financial tool for business owners because it lets you take care of a variety of financial goals, such as covering payroll, making up for slow-paying customers and other short-term business needs.

Bank of America’s business line of credit starts at a line amount of $10,000 and has revolving loan terms. You don’t have to make fixed payments each month like with a term loan; instead, it’s more like a credit card where you can make minimum payments and repay your borrowed amount in a more flexible way.

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Related: Getting the Commercial Loan in USA- Step by Step Guide

Interest rates start at as little as 4.50 percent APR, and you won’t be charged any interest until you actually draw from your line of credit and start using the funds.

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Small Business Administration (SBA) Loans

What if your business is new? What if you haven’t been in business for two years yet? There is a special type of small business loan, called an SBA loan, that is issued by banks but backed by the Small Business Administration.

Bank of America offers SBA loans, which are described as being ideal for businesses that might not qualify for conventional credit. Your business can qualify for an SBA loan if the business is a corporation, LLC, partnership or sole proprietorship.

Bank of America offers several types of SBA loans in different amounts depending on the purpose of the loan. For example, some loans can be used for general working capital and inventory, while some loans can only be used for buying business equipment, expanding a business or doing construction or improvements to a business.

SBA loan amounts range from $25,000 to $350,000, $350,000 and up or $200,000 to $5 million for business equipment and commercial real estate loans.

SBA loans are backed by the federal government, so banks are able to make loans to a wider variety of small businesses, with more flexible terms and lower interest rates than they might have offered for conventional business loans. If your business is just getting started and you need to borrow money to grow, talk to your bank or credit union about SBA loans.

If you’re ready to take the next steps and want to apply for a small business loan or SBA loan with Bank of America, you can start the process online or set up an appointment.

 

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