You probably know American Express as one of the biggest credit card issuers in the world. You may also know of the company as a huge advocate for small business. But what do you really know about American Express’s small business loans?
American Express offers small business loans with great rates and easy account management. As well as merchant financing, for pre-approved Amex business credit card holders. It also applies for business who accept Amex credit cards.
About American Express Business Loan & Merchant Financing
In 2011, American Express launched their small business financing program, offering working capital to small business owners who need more funds than what they can get from their business credit cards, competing with some of the best banks for business loans.
These are unsecured loans that are only offered to pre-approved American Express Business Card Members. American Express® Business Loans are designed to be used for business purposes; such as to consolidate existing business card debt or to fund inventory purchases, expand operations or increase working capital.
It cannot be used for consumers to repay any indebtedness to American Express or for any purpose prohibited by law. Card Member must be pre-approved for an American Express® Business Loan offer in order to apply.
Card Member’s pre-approved loan amount and maximum APR are based on the creditworthiness of Card Member and its business and other factors.
- Favorable rates and payment terms.
- Low annual revenue requirement.
- Must be an American Express Business Card Member to qualify.
American Express Working Capital, Business Loan and Merchant Financing
All business financing options through American Express boast fixed costs, no origination fees, and automatic repayment solutions. Therefore, individual loan product rates, terms, fees, and limits are as follows:
American Express Working Capital
This working capital loan product is designed specifically to fulfill vendor payment obligations. Eligible business owners can use the total approved funds to pay one or multiple vendors.
Borrowers can be approved for anywhere between $1,000 and $750,000, depending on creditworthiness. Repayment terms of 30, 60, or 90 days are available, with fees varying as follows:
- 30 days: 0.5% to 1.75%
- 60 days: 1.0% to 3.50%
- 90 days: 1.5% to 5.25%
American Express Business Loan
Those approved for an American Express Business Loan can access anywhere from $3,500 to $50,000, all of which must be used for business purposes or to consolidate business debts. Loan rates range from 6.98% to 19.97% with repayment terms of 12, 24, or 36 months.
Keep in mind that loan products through American Express are on a pre-approval basis, and eligibility, rates, and amounts can fluctuate based on an applicant’s credit usage, changes in credit score, and American Express credit card standings.
If cardholders do not see a pre-approval offer but feel they may be eligible, they can contact American Express to inquire further.
American Express Merchant Financing
American Express also offers merchant financing for businesses that accept American Express credit cards. Businesses may receive between $5,000 and $2 million and also repayment terms include 6, 12, or 24 months.
This form of financing does not charge interest, rather a fee that is a percentage of the total loan amount. The fees are as follows:
- 6 month term: 1.75% to 5%
- 12 month term: 3.5% to 12%
- 24 months: 7% to 20%
Because American Express business financing options are based on pre-approval, the loan application is simple, and funds are typically available quickly. Rates are competitive, and that’s particularly true of the Working Capital product, which allows borrowers to secure funds to pay vendors at a rate as low as 0.05%.
Additionally, products like the Working Capital financing can help business owners make timely payments or extend orders, which can help them build stronger vendor relationships and secure better deals over the course of their relationship.
Factors American Express Business Loan Considers
American Express looks at the following qualifications that most small business lenders looks at:
- Annual revenue: American Express wants to see that your business brings in a minimum of $50,000 in annual revenue.
- Credit and debit card receivables: Because much of this financing is based off of what you bring in in credit card sales. American Express checks to see that you have a minimum of $12,000 in annual credit and debit receivables.
- Time in business: Like most business lenders, American Express looks to see if you’ve been in business for at least 24 months.
Other Factors American Express Considers
American Express looks at those three factors, along with creditworthiness (though they don’t set a range for eligible credit scores), for any application for their financing products.
However, if you’re applying for the two-year financing, they also look to see that you’ve accepted American Express credit cards for the past 24 months.
You should also be aware that American Express doesn’t lend to businesses in certain industries, which include:
- Cruise lines
- Airlines, private jets, or chartered airlines
- Ticket sales and brokers
- Adult entertainment
- Medical marijuana dispensary
- Check cashing/guarantee
- Financial services equities, unit trusts, mutual funds
- Bail bonds
- Detective agencies
- Door-to-door sales (exception for payment on delivery directly to the company or to the franchisee)
American Express Business Loan could be a good option for small business owners who want to fund a small project or consolidate credit card debt with a company they already do business with.