Borrowing Solutions forYour Business
Your small business is a big deal to us
That's why we take the time to truly understand every aspect of your business—including the dreams and aspirations that drive it. Wherever you see your business heading, look to BB&T for informed solutions to help you get there.
Which borrowing solution is right for you?
With our support, your opportunities are endless
When you take advantage of a BB&T small business borrowing solution, you don’t just get a product—you get a suite of opportunities to help your business succeed. BB&T borrowing products offer convenient access to funds when you need to finance working capital, purchase equipment, expand the business, buy a building, pay employees, and more.
Get financing for start up costs, maintaining cash flow, making improvements, and other business expenses to increase your chances of success
- Get a specified loan amount distributed as a lump sum
- Establish the length of your loan at the beginning of the loan process
- Choose from a variety of fixed and variable rate options
- Make scheduled monthly payments of principal and interest
- Apply for a secured or unsecured loan
- Use a loan to make a large one-time purchase
Lines of credit
Leverage the value of your assets into a convenient, flexible line of credit for your business when you need it
- Get a revolving maximum credit line amount
- Enjoy flexibility in accessing funds when your business needs it
- Finance day-to-day operations, supplement cash flow, or take advantage of unexpected business opportunities
- Make monthly payments that adjust according to your balance
- Pay down the line amount and use it continually over time within the maximum limit
SBA Borrowing Options
Small Business Administration (SBA) borrowing options can help you start or grow your business. As an SBA Preferred Lender, BB&T partners with the US Small Business Administration, which can make it easier for you to repay your loan and keep cash in your business
- Choose from multiple borrowing options to get the fit that's right for your business
- Benefit from a lower down payment and more flexible terms
- Use your funds to start a business, buy an existing business, fund working capital, purchase land or buildings, make renovations, or purchase equipment or inventory
Business credit cards
Get a business credit card that simplifies your finances and earn rewards for business purchases
- Pay bills and vendors immediately and leverage a monthly payment cycle and 25-day grace period for payments
- Choose from three business credit card options to best suit your needs
- Use the card to finance daily operations and keep business expenses separate from personal expenses
- Earn rewards for business purchases
Borrowing guidelines for businesses
Whether it's for startup costs or capital expansion, eventually most businesses need to borrow money. Being prepared and understanding the requirements can increase your chances of getting a loan and making the process easier.
Reasons for borrowing
When applying for a business loan, be sure to start with a clear plan for how you'll use the money. Lenders prefer to offer funding that will be used to enhance the value of the business rather than to cover operating expenses because of a decrease in revenue. Here are some reasons that businesses borrow money:
- Capital for startup expenses or expansions
- Opportunities that could likely enhance the value of a business, such as advertising or buying inventory in bulk
- Credit records to help a business qualify for larger loans in the future
- Equipment financing
Borrowing from the right source
If you've decided to borrow, it's important to choose the best lending source for your specific situation. To determine that source, make a realistic assessment of how much you need and can afford to repay, as well as the terms that suit you best. Here are some recommendations to consider when choosing a lender:
- Consider your alternatives – Before applying for a loan with a financial institution, carefully consider all alternative sources of capital. Investors, friends or relatives—or even the seller if you're purchasing a business—can possibly provide a portion of your borrowing needs that may not qualify for a bank loan. Discuss these options with your financial advisor or your banker.
- Choose the right lender – If you decide you need a loan, approach lenders who make loans to businesses of your size, in your industry or in your geographical area. If the institution already knows you, your business, your industry and potentially your customers, they may already have a great deal of the information they need to make an informed lending decision.
- Explore leasing versus purchasing – If you expect to use the funds to purchase a piece of equipment, you may want to discuss leasing options with the equipment vendor instead. Many manufacturers offer leasing agreements with lenders who may be familiar with your type of business.
Type of loan sought
When you're looking for funding for your business, you don’t need to choose a specific type of loan before you approach a lender; they'll help you decide what financing is best for your needs. Here are some ideas to keep in mind when choosing a loan:
- Loan terms – Be sure that the terms of a loan will align with your expected cash flow, allowing you to meet the payment terms, on schedule and in full.
- Collateral – Try to avoid pledging a lot of collateral for relatively small loans. Instead, offer collateral that is tied to the purpose of the loan. For example, if the loan is for purchasing a new machine, offer a security lien on the machine as collateral.
- SBA loans – Depending on the size of your business, you may want to consider a Small Business Administration (SBA) loan. The SBA encourages lending to small businesses by guaranteeing parts of loans made to businesses of certain sizes where the proceeds are being used for certain purposes. You can talk to an institution offering SBA loans to learn more.
Be prepared to discuss the financial status of your business and provide supporting documentation, including, but not limited to, these documents:
- Accounts payable policy
- Bank statements
- Business license
- Business plan
- Credit policy
- Current profit and loss (P&L) statement
- Insurance policy
- Lease and/or loan agreements
- Ownerships and affiliations with other businesses
- Personal financial information
- Tax returns and CPA-prepared financial statements
- Organizational documents, including Articles of Incorporation, LLC or Partnership Agreements, Operating Agreements, By Laws, etc.
Your business plan should play a major role in your decision to borrow and may play a major role in a lender's evaluation of your loan request.
Be sure that your business plan is current and includes everything the lender needs to understand your business and make a fully informed decision. The main components of the plan should include at least the following items:
- Business description
- Competitive analysis
- Development plans
- Financial information
- Key personnel
- Management plan
- Marketing strategies
Be prepared to discuss how you currently (or plan to) operate and maintain a profitable business. Evidence of your successful business practices can include, but is not limited to, these resources:
- Solid business plan
- Track record of profitability
- Strong credit record
- Documented history of success in other business ventures, even if you weren't the owner
- Network of reliable and successful mentors who can advise you in your business practices
Taxes and other financial information
Your tax return is the primary document that lenders use to determine your creditworthiness as a business owner. To help you gather tax information to present to potential lenders, here are some questions to consider:
- What has your annual revenue been during the past 2 to 3 years?
- Are your payroll, property and income tax filings up to date?
- Do you work with a qualified tax professional to help you maximize your tax benefits?
- Do you have records that verify the stability of your client or revenue base?
- Is your cash flow greater than your monthly loan payment would be?
The bottom line
Now that you have an idea of what lenders look for, you can use the process of preparing to borrow as a tool to evaluate your business and plan for its success. The proper preparations can strengthen your business as well as your case for borrowing.
SBA loans and starting a business
If you have plans to start or expand a business, the Small Business Administration (SBA) can help. The SBA participates in loan programs for business owners who may not qualify for a traditional loan to get them the funding they need.
The SBA 7(a) guaranteed loan
The most common SBA loan is a 7(a) guaranteed loan. Here are some details specific to the SBA 7(a) loan:
- This loan is made by a private lender (often a bank), and the SBA provides a guarantee on 75% of the amount of the loan.
- There are some maximum business size restrictions on these loans. For example, a retail or service company could have at least $7.5 million in sales (and perhaps up to $29 million) and still be eligible. A wholesaler can have up to 100 employees and still qualify.
- The maximum amount that the SBA will guarantee is $3,750,000, and therefore the maximum loan amount is $5 million.
- The interest rate on SBA 7(a) loans is tied to the prime rate. For loans of $50,000 and more, the rate is up to 2.25% above prime for loan terms fewer than 7 years, and up to 2.75% above prime if your term is 7 years or more.
Allowable use of SBA loans
While there are some restrictions on the use of SBA loan proceeds, generally they can be used in the normal course of business. Here are some of the allowable uses of loan proceeds:
- Real estate purchase for housing the business
- Construction, renovation or leasehold improvements
- Acquisition of furniture, fixtures and equipment
- Business purchases
- Working capital
The SBA process timeline
While an SBA loan can be a good source of capital for your business, be aware that these loans come with several requirements. You can ease—and in some cases, shorten—the process by taking these steps:
- Complete and provide proper documentation and applications
- Work with a bank or other lender that is familiar with the SBA process
- Be prepared to provide collateral or personal guarantees
The bottom line
SBA loans can be a useful source of needed capital for many small businesses. Interest rates are generally a couple of percentage points above prime and repayment terms can be negotiated.
If you're considering an SBA loan, be prepared to spend some time and effort securing one. Being well organized, having patience and working with an experienced SBA lender can make the process less burdensome.