Wells Fargo was founded in 1853 by Henry Wells and William G. Fargo. The company began as one of the many Express Companies that provided parcel and delivery service throughout the United States, an industry that also included Adams Express, American Express, and the short-lived Russell, Majors, and Waddell (better known as the Pony Express).
As times changed, so did the scope of the business. Banking services would be added to take advantage of the boom years of the California Gold Rush, and as the demand for Express service fell due to demand from the Postal Service and other players, the banking and small business loan portion of the business grew. Today, Wells Fargo is the top-ranked SBA lender by volume and dollar amount* and is synonymous with small business lending.
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Wells Fargo offers Business and Vehicle and Equipment loans. Customers can request amounts from $10,000 to $100,000 dollars for a loan term between two and six years. There is a $150 documentation fee, but no penalties for pre-payment. Business loans are unsecured and are disbursed as a lump sum, while loans for vehicles or equipment can be drawn down and are secured. In either case, rates are based on credit history and the term of the loan, with additional consideration given to the equipment financed for vehicle and equipment loans.
Business Lines of Credit
For some businesses, an open line of credit makes more sense than a business loan. Where a business loan is well-suited to a significant one-time expense, a business line of credit can make it easier for business owners to deal with the ebb and flow of their businesses, whether it's seasonal spikes in demand or unexpected purchases.
Lines of credit are available in amounts ranging from $5,000 to $100,000 dollars. They may be secured with a Wells Fargo Savings or CD Account (the amount of which determines the line of credit) or unsecured (in which case a customer's cash flow and creditworthiness determines the amount for which they are eligible).
Real Estate Financing
Wells Fargo offers secured loans and lines of credit issued against the value of commercial property. The loans disbursed can be used for refinancing, leveraging equity, or the purchase of properties.
Who Qualifies, and How to Apply
Wells Fargo is admirably transparent about their application process, and provides both insight into their loan approval metrics, and ways to improve your business's chances of approval. They look at personal credit history and credit scores, cash flow, collateral (for secured loans), and whether a business is resilient enough to survive business downturns.
In addition, at the time of application, your business should be open for at least three years (and profitable for at least the last two), you should have a sufficient ratio of cash flow to expenses (at a minimum, $1.50:$1), all payments should be on time and up to date, and your financial record should be clear of bankruptcies, tax liens, judgments or suits. A business plan is a must. And it goes without saying that the information requested should be as complete and accurate as possible, since the approval process can be significantly delayed by incomplete or inaccurate information.
Other Services Offered
Wells Fargo offers a wealth of support services to businesses of all sizes. These include:
- Payment Processing
- Gift Cards
- Payroll Service
- Employee Benefits
- Merchant Services
- Employee Benefits
- Financial Management Tools
- Resources for Small Business Owners
- Commercial Lending for businesses with more than $20 million in annual revenue
- Industry-Specific Solutions for agribusiness, construction, health and medicine, restaurants, retail, real estate and property management, and nonprofits
It's axiomatic that you need to spend money to make money. L'Escargot owner Kerry Loutas can attest to the truth buried in that old cliche. For years, he had leased the building that housed his restaurant. Seeing the opportunity to own the space instead of renting, he reached out to Wells Fargo. Taking out a small business loan meant monthly payments that wouldn't change unexpectedly. It meant not having to worry that the building would be sold out from under him. It also meant being able to expand the restaurant and hire two more employees.
The right opportunity can sometimes be time-sensitive. When entrepreneur Dennis Keaster saw a 24-unit apartment building go on the market, he saw the perfect opportunity to diversify his business. The problem? He'd have to act fast to secure this prime property. He enlisted the help of the Wells Fargo Business Banking team, which expedited his secured real estate loan in less than three weeks. Keaster was able to purchase a rental property in a highly competitive market thanks to Wells Fargo's simplified loan process.
Much has changed since Wells Fargo's inception in 1853. Amid all the changes, however, one thing has remained consistent: Wells Fargo remains the lender of choice for thousands of small business owners year after year, thanks to the variety of loans and credit lines they offer and the service with which they back their product.
*Through Q1 2016 Wells Fargo Bank disbursed $436,645,500 to 2,379 small business borrowers. See: www.sba.gov/lenders-top-100