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Reviews, Small Business

Wells Fargo Small Business Loan Review

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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There are many online lenders offering small business loans these days, and for good reason – banks are notorious for their long underwriting process. If you want to get funding quickly, a bank typically isn’t your best option.

Getting a small business loan with Wells Fargo won’t take months, but it may take a little longer than an online lender.

It offers quite a few small business loans that are worth a look, especially its Fast Flex and Wells Fargo Business Loan Term Loan. The Term Loan is the most basic of its small business loans, and a good fit for any business looking to expand or get working capital.

You don’t have to have any accounts with Wells Fargo to apply for a Term Loan, but you will need to apply in person, so having a branch nearby is ideal.

A Fast Flex loan can get you instant approval, but you need a Wells Fargo checking account with deposits over $50,000 open at least 1 year.

Wells Fargo Small Business Loan Details

With a Wells Fargo small business loan, you can borrow $10,000 to $100,000 on 2, 3, 4, or 5 year terms. Fixed APRs start at 7.5% –and vary based on the length of the loan and your credit history.

There’s a monthly repayment plan with this loan and a $150 opening fee. No collateral is required.

Fast Flex Loan Details

A Fast Flex loan has a short, 1 year term, and ranges from $10,000 –$35,000. You can apply online, get funds as soon as the next business day, but there is a one time $195 opening fee.

Interest rates start at 13.99%, not including the impact of the $195 fee.

Use this loan if you need money quickly, but expect to pay a higher rate and the higher upfront fee as the cost of faster money. It will be more expensive than a standard Wells Fargo Small Business Loan if you pay it off in a year, but it will be less expensive than many alternatives that can get you the money the next business day.

The Pros and Cons of a Wells Fargo Small Business Loan

Pro: Unlike other bank loans, this is an unsecured loan, so Wells Fargo doesn’t require any collateral.

Con: Wells Fargo will send a check directly to you once you’ve been funded. Most online lenders will deposit the amount you’ve been funded for directly into your business bank account. While Wells Fargo claims to have a quick process, this could slow things down a bit.

Pro: Many lenders are only offering loans up to one or two years. Having a five-year term could make payments much easier to manage, as they’ll be lower. This is beneficial when paying once a month, as payments will be larger.

Con: If getting paid by check wasn’t inconvenient enough, to apply for a small business loan with Wells Fargo, you also need to apply in person. While there are plenty of branches located in the United States, you might not have time to set up an appointment and go. Online lenders make it easier to apply as you can upload all your documentation through their portals.

Pro: The APR range isn’t bad at all when compared with other lenders. Some are as high as 40%, and 4.25% is a very low starting point.

What Businesses Are Eligible For a Loan With Wells Fargo?

Wells Fargo says this loan is “ideal for established business owners who want credit for business expansion, leasehold improvements, and other business opportunities.”

It further expands on this in its lending principles document. Wells Fargo takes the following into consideration when deciding whether or not to loan to a business:

  • Personal credit history of the primary business owner – timely payments and responsible use of credit are a must
  • Your company should have decent cash flow, enough to support making payments
  • Liquidity in the business – if you experience a slow season, Wells Fargo wants to make sure you have other means of repaying the loan
  • You have the best chance of being approved if you’ve been in business for at least 3 years
  • Your business credit should be clean. Wells Fargo won’t lend to businesses with judgments or liens in the past 10 years
  • Your business should be showing a profit, at least in the last two years
  • Ideally, you have five open lines of credit for a strong credit history

Even if you only meet most of these requirements, you still have a chance of being approved for a small business loan. Wells Fargo places a lot of emphasis on good, strong credit history as well as business cash flow. You need to be able to show that your business is capable of repaying the loan.

Application Process and Documents Needed

Wells Fargo offers a handy list of things you should have ready before applying on its website, but here are the most important things:

  • Business bank account number and balance (bring statements if possible)
  • Annual business revenue (having tax returns will help)
  • Personal bank account number and balance (for the owner applying)
  • Basic business and personal information

Wells Fargo states it takes around three business days to review your application and documents. Expect to hear back about an approval by then. Remember, you’ll get sent a check via express mail, so actually receiving the funds may take another day or so, and that’s if no additional documentation is needed.

If you’re not approved, it could take ten to fifteen days to hear back with an explanation of why you were denied.

The Fine Print

There are no prepayment penalties, annual fees, loan documentation fees, or closing fees associated with this loan.

However, there is an opening fee of $150. This can be waived if you choose to open a Wells Fargo Business Services Package, and include your loan as part of it. The additional benefit you get from opening an account with Wells Fargo is a 0.25% rate discount when you set up automatic payments.

Which Businesses Benefit the Most from a Loan With Wells Fargo?

Businesses with good cash flow and great business credit that also have owners with good personal credit will benefit the most. As stated, the business needs to show that it’s profitable. If you’re looking to expand because you’ve been experiencing rapid growth, now is a good time to apply for a loan.

If you’re struggling to pay off any debt you have, or worse, have liens or judgments against your business, you likely won’t qualify for a loan.

Additionally, business owners with a Wells Fargo branch nearby will benefit even more, as you must apply for a loan in person. The closer the branch, the more convenient it will be for you.

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Other Alternative Small Business Lenders

Wells Fargo does things a bit differently than online lenders. If you’re not a fan of having to drive to an appointment to receive a business loan, or don’t want to wait for a check to arrive in the mail, take a look at these alternative lenders.

Consider starting with LendingTree. The online marketplace empowers business owners to find the best deal for your business by allowing you to compare multiple financing options from various lenders in one place. You simply fill out a short form and may receive up to five business loan offers.

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FundingCircle offers loans of $25,000 to $500,000 on terms of 6 to 60 months. Its interest rates range from 4.99% to 27.79%, and its origination fee ranges from 3.49% - 7.99%.

Your business must have over $150,000 in annual revenue and 2+ years of operating history. A profit must have been reported on one of the last two years’ tax returns. You must not have had any bankruptcies within the past 7 years, and no more than 5 tax liens in the past 10 years. A minimum credit score of 620 is needed to qualify.

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smartbiz SBA Loans offer financing on $30,000 to $350,000 with a terms of 60 to 120 months. APRs range from 6.75% to 9.99%, and the origination fee is 0.00% - 4.00%. You need at least two years in business (two years of tax returns must be filed), and positive cash flow. A minimum credit score of 600 is needed to qualify.

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Each of these alternatives also has a monthly payment.

Shop Around – It’s Worth the Time

While applying for a business loan online is easier than applying in person, it still pays to shop around for the best rates and terms. Small business loan programs vary wildly between lenders, and based on the industry your business is in, you could receive better rates from other lenders that have experience working with your industry.

If you think Wells Fargo has exceptional terms for your business, then it could be worth setting up an appointment to apply. However, don’t stop there – as long as you apply for business loans within a 30-day window, your credit won’t be impacted as much. Credit bureaus expect that you’ll shop around to find the best loan for your business, so take advantage.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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College Students and Recent Grads, Reviews

Review: SunTrust Custom Choice Loan

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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SunTrust offers students a good option to finance their education with its Custom Choice Loan. Interest rates are fairly low, students may apply with a cosigner, and it comes with several repayment options. As a bonus, SunTrust offers graduates a 2% principal balance reduction as long as students graduate with at least a Bachelor’s degree.

 

Details of SunTrust’s Custom Choice Loan

The minimum amount you can borrow is $1,001 and the maximum amount you can borrow is $65,000. The total amount of Federal and private student loan debt you take out per year can’t exceed $150,000. You can choose a 7- or 10-year repayment term, and a 15-year term is available for borrowers taking out $5,000 or more.

Fixed APRs range from 5.35% to 14.05%, and variable APRs range from 4.37% to 13.38%.

You have four choices of repayment plans:

  • Immediate Payment – There’s no grace period as you begin full payments while in school
  • Interest-only Payment – You pay the interest that accrues on your balance while in school
  • Partial Payment – Available on loans $5,000 or more, you can make payments of $25 per month while in school
  • Full Deferment – You get a grace period of six months when you choose this option, and you’re eligible for deferment as long as you’re enrolled in school part-time at an approved school (this option is the closest to how Federal student loans function)

The interest rate you get approved for is based on your credit history, loan term, amount requested, and other information provided on your application.

A 0.25% interest rate reduction applies if you set your loans to autopay, and SunTrust customers benefit from an additional 0.25% reduction if they pay through their SunTrust bank account.

How Does the Custom Choice Loan Compare to Federal Student Loans?

Before applying for the Custom Choice Loan, you should exhaust all of your federal student loan options first. Make sure your family fills out the FAFSA form to see what you might be eligible for. Federal student loans have lower fixed interest rates, and come with more benefits than private student loans do. These benefits will help in case you hit a rough patch with your money.

For the 2018 – 2019 Academic year, Direct Subsidized and Unsubsidized Loans have a fixed interest rate of 5.05%. That makes the 5.35% fixed APR and 4.37% variable APR of the Custom Choice Loan comparable. However, those are the lowest possible APRs available, and if you don’t have excellent credit, you may not be eligible to receive them. Variable rates are also subject to change, which means they can increase over the life of your loan and become more expensive.

SunTrust doesn’t have an origination fee with its loan, but the Direct Subsidized and Unsubsidized Loan has a 1.062% disbursement fee from October 1, 2018 through September 30, 2019.

SunTrust’s APRs aren’t horrible, though. If you can, apply with a cosigner who has better credit, as you’ll be eligible for lower rates. You want to get as close to Federal interest rates as possible to get the best deal.

[7 Things You Need to Know about Private Student Loans]

Eligibility Requirements

You must be a U.S. citizen or permanent resident to apply. A majority of four-year public or private colleges are eligible – you can check eligibility on the first page of the application.

If your credit history isn’t sufficient enough, you can apply with a cosigner, and there’s a cosigner release option available after 36 consecutive, on-time payments.

You must also be the legal age of majority when completing the application. Applicants residing in Iowa or Wisconsin aren’t eligible for this loan.

[How to Tell if Your Loans are Federal or Private]

Application Process and Documents Needed

You can apply online by yourself or with a cosigner. After your application and credit (a hard credit inquiry is used) are reviewed, you’ll be presented with your loan options. If you choose to move forward with the loan, you’ll be provided with a list of documents you need to upload.

Once you’ve submitted everything, an Approval Disclosure will be sent to you for acceptance. You have 30 days to accept the terms of the loan before they expire.

Upon acceptance, SunTrust will contact your school to request certification of the loan, as you’re only allowed to borrow enough to cover your education expenses. This also ensures you don’t take out more student loan debt than necessary.

Once everything is complete, you (and your cosigner, if you applied with one) have three days to back out of the loan. After that, the loan is finalized, and the funds are sent directly to your school.

Have these documents ready to submit when applying:

  • Proof of income – the student or cosigner must show proof of positive income in the form of a recent W2, paystub, or tax return
  • Photo ID
  • Proof of residency may be required if Photo ID isn’t sufficient

The Fine Print

There are no origination, application, or prepayment fees for this loan. If you’re 10 days past due on a payment, you’ll be charged 5% of the unpaid amount as a late fee.

The minimum loan amount is different in certain states: $5,001 in Alaska, $3,001 in Colorado, $2,501 in New Mexico, $5,101 in Oklahoma, $5,001 in Rhode Island, and $3,701 in South Carolina.

[Student Loan Disbursement 101]

Repayment Assistance Options

American Education Services is the loan servicer for SunTrust. If you experience any difficulty repaying your student loans, you’ll have to contact them for repayment assistance options. You may be able to apply for a deferment, forbearance, or interest-only payment for an extended period of time.

Pros and Cons of the Custom Choice Loan

Pro: If the borrower dies, then the balance of the loan may be forgiven as long as SunTrust is contacted and provided with proof of death. (If the cosigner dies, the student remains responsible for the loan.) Students who become permanently disabled can apply for a loan discharge as well.

Con: The loan isn’t available to those living in Iowa or Wisconsin, and minimum loan amounts differ in six states. Make sure that doesn’t apply to you in case you’re not looking to borrow a large amount.

Pro: The Custom Choice Loan fittingly gives you a few choices when it comes to loan repayment options. Choosing partial payments or interest-only payments can help lessen the amount of interest you’ll pay over the life of your loan, and are easier to manage than going into immediate repayment.

Pro: SunTrust offers a Graduation Reward where 2% of your principal balance will be reduced, provided you graduate with at least a Bachelor’s degree. The principal balance is based off the net total of all disbursements you receive from SunTrust.

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Private Student Loan Alternatives

Not eligible for a loan with SunTrust? There are many other private lenders offering student loans, such as Citizen’s Bank and Sallie Mae.

Citizens Bank: You can borrow up to $90,000 and your combined Federal and private student loan debt can’t exceed $120,000. Fixed APRs range from 6.39% to 11.65%, and variable APRs range from 6.14% to 11.40%. Repayment terms offered are 5, 10, and 15 years.

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Sallie Mae: One of the most well-known private student loan lenders, Sallie Mae has a Smart Option Student loan with fixed APRs ranging from 6.25% to 9.16%, and variable APRs ranging from 4.00% to 9.04%. You can borrow up to the cost of attendance, and this loan comes with a Graduated Repayment option.

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It’s also worth checking with your bank or local credit union for their rates. If you or your cosigner have an existing relationship with a bank, that could help you secure lower rates.

Are you afraid of your credit being negatively affected if you apply with too many lenders? As long as you complete applications within a 30-day window, then the credit bureaus will count all inquiries as one inquiry, ensuring your credit doesn’t take a huge hit. Shopping around for the best deal is worth the effort with student loan debt being such a burden. Lower interest rates will make your loan more affordable.

A Solid Option if You Have to Use a Private Lender

The SunTrust Custom Choice Loan is a solid option for students requiring more financial assistance than what the Federal government can provide. SunTrust customers benefit more with the 0.50% interest rate deduction, and no one can complain about receiving a 2% principal reduction on their loans upon graduating.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Reviews

Apple Pay Cash Review

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

With so many peer-to-peer money transfer options on the market, it can be difficult to figure out which is the most functional. If you’re an Apple user, you’ve probably been exposed to their proprietary product: Apple Pay Cash. Is it the best option for you, though, as far as fees and security are concerned?

Let’s dive in to find out.

Apple Pay at a glance

Fees: 3% fee if you use a credit card; free if you use a debit card or balance from Apple Pay Cash

How long it takes to receive funds: Funds are sent immediately to the recipient.

Fraud protection: If you feel you are a victim of fraud or a scam, Apple encourages you to contact the company immediately.

Compatible devices: iPhones (XR, XS, XS Max, X, 8, 8 Plus, 7, 7 Plus, 6, 6 Plus, 6s, 6s Plus, and SE models), iPads (iPad Pro 3rd generation, iPad 6th generation, iPad Pro, iPad 5th generation, iPad Air 2, iPad Mini 3 and iPad mini 4 models), Apple Watches (1st generation, Series 1, Series 2, Series 3 and Series 4 models), and Mac models introduced after 2012 with an Apple Pay-enabled iPhone or Apple Watch. Mac model must have Touch ID.

How Apple Pay Cash works

Before you can start sending money, you need to link a card or bank account to your Apple Pay account.
First you’ll have to identify if your financial institution participates. If they do, you can then add your account to your device in the ‘Wallet’ section. You will have to add each individual card to each individual device. Keep in mind that while sending money to friends and family is free with a debit card, you will incur a 3% transaction fee if you use a credit card to send those same funds.

Now that you have a funding source, you can send money to family and friends easily. On your iPhone or Apple Watch, you can simply ask Siri. Apple tells consumers you can say something along the lines of “Send $50 to Mom,” to use this functionality.

You can also do a completely manual transfer. On your iPhone or iPad, you’ll be doing it through messaging. Open up a conversation with your recipient and press the Apple Pay button.

It looks like this:

If you don’t see it, click the button that looks like this:

You’ll be prompted to enter a dollar amount.

 

apple pay apple pay

 

Then simply type in the amount you’d like to send, add a message for your recipient if you so desire, and press the button that looks like this:

Finally, to send the payment, you will need to verify your Face ID, Touch ID or passcode.

To do the same with your Apple Watch, you will also need to open a conversation in messages and press the Apple Pay button. Turn the digital crown to set your payment amount, then turn it again when you’re ready to submit. Press “Pay,” and then double click the side button.

When someone sends you money via Apple Pay Cash, it will be deposited into your Apple Pay account. The first time you receive money, you will have to formally accept the payment within seven days. From there on out, payments will be automatically accepted unless you change your account settings.

You can leave your money in your Apple Pay Cash account, or you can transfer it to your bank account. Bear in mind that when you send money, it will be drawn from your Apple Pay Cash account first. If you send more than you have in your Apple Pay Cash account or your do not have a balance, it will come from your first payment method. This will preferably be a debit card so you can avoid the 3% fee which is incurred when you use a credit card.

Apple Pay Cash vs. Venmo

Except in rare instances where there is a hiccup in the payment process, both Apple Pay Cash and Venmo transfer money from user to user automatically. It may take one to three days to transfer money into your bank account, but your funds will be available via your Apple Pay Cash or Venmo balance immediately.

These two services also have the same fees as noted in our in-depth comparison: 3% of all transactions paid via credit card.

The biggest difference between Venmo and Apple Cash Pay is that Venmo is available to those who don’t have an iPhone, iPad, Apple Watch or compatible Mac. If most of your friends and family use Apple products regularly, this accessibility issue could be a moot point. But if you or much of your social circle uses Android or products with other operating systems, Venmo may be the way to go.

Apple Pay Cash vs Zelle

If you don’t feel like waiting a few days to get your money into your bank account, Zelle is a good alternative. Offered by many banks, Zelle is very much like Apple Pay Cash and Venmo except that money is transferred directly from bank account to bank account. You won’t have a “Zelle” balance like you would have a Venmo or Apple Pay Cash balance. Transactions with Zelle are usually completed within minutes.

Zelle itself doesn’t charge consumers any fees to use its service, but your bank or credit union might. The only fee to worry about with Apple Pay Cash is the 3% fee when you use a credit card as your payment method.

Risks of mobile payment apps

Apple Pay Cash is secured on various levels. First, you will have to enter a passcode, Face ID or Touch ID to send any money. This is required each and every time you make a transaction. Secondly, your actual card numbers aren’t stored directly on your mobile device or Apple’s servers, which helps keep you safer from potential hacks.

Because these security measures are already in place, the remaining bulk of staying safe with Apple Pay Cash is placed on your shoulders. Make sure you don’t accept payments from people you don’t know. In fact, Apple encourages you to report these payments as “junk.”

Even with people you do know, you should be careful of imposters. You may get a payment from a “friend” with a dummy phone number or email address and/or Apple Pay Cash account. If you’re not expecting a payment from someone, verify that they sent you money by getting in touch with them before accepting the payment.

If you want to have to opportunity to reject payments, you will have to change your settings. While you will have to formally accept your first payment, after that the default is to accept all payments automatically. Go into your settings to change payment approval to “manual” in order to dodge any shady incoming payments.

Finally, Apple cautions users to be wary if a company requests an Apple Pay Cash payment via messaging. Apple will never ask you to pay your bill this way, and it’s not the safest way to pay your other bills either as you can’t be 100% sure it’s really the entity you owe money to rather than an imposter.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne here

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