17/04/2024

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Live Oak vs. U.S. Bank : Which Small Business Lender is Right for You?

Live Oak vs. U.S. Bank : Which Small Business Lender is Right for You?

Key takeaways

  • Live Oak and U.S. Banks both offer small business loans, including SBA loans
  • Live Oak has the most experience offering SBA loans
  • U.S. Bank stands out of its equipment loans

U.S. Bank and Live Oak Bank both offer multiple small business loan options. But each stands out in their own way. Live Oak excels at SBA loans. The lender gives the highest SBA loan amounts and has qualified as the top SBA lender in the country. U.S. Bank stands out for its fast business loan option and its equipment loans.

U.S. Bank offers lower starting loan amounts and more loan types, but Live Oak Bank has a higher loan amount limit.

Live Oak U.S. Bank
Bankrate Score 3.0 4.1
Best for SBA loans Equipment loans
Number of loan products 4 6
Loan amounts $150,000 to $15 million $5,000 to 12.4 million
Interest rates Not stated Starting at 7.99% APR
Term lengths Up to 25 years 2 to 25 years
Personal credit score 650 Not stated
Minimum time in business Two years Not stated
Minimum business revenue Not stated Not stated

Live Oak offers several types of business financing, including SBA loans, USDA loans and commercial loans. Businesses can apply for both SBA 7(a) loans and SBA 504 loans.

The lender also practices inclusive lending practices. Live Oak works to provide funding specifically for small business types that traditionally don’t have as much access to funding. These business types include veteran-owned, minority-owned and women-owned businesses.

You won’t be able to see eligibility requirements for a small business loan through Live Oak before applying. The lender doesn’t provide details like interest rates or required time in business, which makes it difficult for small business owners to compare lenders to find the most affordable option quickly.

Pros

  • SBA Preferred Lender
  • Inclusive lending practices
  • Generous loan limits

Cons

  • Minimal loan details provided
  • No online prequalification
  • Some industry restrictions

Bankrate insight

Since 2018, Live Oak has consistently been the top SBA 7(a) lender by loan amount. In 2023, it approved over $1.8 billion in SBA 7(a) funds, according to the SBA lender report.

U.S. Bank small business loans include multiple SBA loan types, conventional term loans, quick loans, commercial real estate loans and equipment loans. The downside is that the lender only offers business loans in 28 states.

Unlike most traditional banks, U.S. Bank offers a fast business loan of up to $250,000. While most banks take days or weeks to fund loans, U.S. Bank’s Quick Loan can fund as quickly as the same day you apply.

The lender also offers an equipment loan online for up to $200,000 in financing without any down payment required. This makes an equipment loan through U.S. Bank an excellent option for businesses with minimal capital.

U.S. Bank is an SBA Preferred Lender, offering SBA 7(a) loans, SBA 7(a) real estate loans and SBA 504 loans. Loan amounts can be as high as $5 million for both 7(a) loan types and up to $12.375 million for their 504 loans. As an SBA Preferred Lender, U.S. Bank also typically gives quicker approval than other SBA lenders.

Pros

  • SBA Preferred Lender
  • Online application for some loan types

Cons

  • Minimal eligibility requirements details
  • Interest rates not provided for all loan types
  • Limited state footprint

Both Live Oak and U.S. Banks offer bank business loans that may be solid options depending on the small business owner’s needs. Live Oak has a leg up on U.S. Bank as an SBA lender. But U.S. Bank offers one of the best equipment loans around.

Choose Live Oak for SBA loans

Live Oak offers the highest loan limits between the two lenders and offers long repayment terms. Live Oak gives out loans amounts up to $15 million on SBA loans, which is considerably higher than U.S. Bank’s SBA loan limit of $12.375 million.

It’s important to note that interest rates, loan amounts and eligibility will differ for each business owner. Business owners with good or excellent credit scores will get the best interest rates on a loan. Certain businesses may not qualify for an SBA loan with Live Oak depending on income, time in business and other factors.

Choose U.S. Bank for equipment loans

U.S. Bank offers the most expansive equipment loan options. While Live Oak offers USDA loans that could be used to finance business equipment, only certain rural and agricultural businesses qualify for this loan type. U.S. Bank provides a specific loan for equipment with no industry restrictions.

The lender’s equipment loan has multiple benefits to offer. Businesses can apply for up to $1 million in equipment financing. The loan can also be used to finance various pieces of equipment. Plus, equipment loans from U.S. Bank are secured by the equipment you purchase, so business owners don’t have to offer any down payment for the loan.

When shopping for a business loan, looking at your options is a good idea. For example, a business credit card may be a better option for small equipment purchases since you can avoid interest payments if you pay your balance in full each month. And if you can’t qualify for SBA 7(a) loans, other lenders offer different types of SBA loans beyond what either lender offers, including SBA microloans and Express Loans.

Both lenders likely require good-to-excellent credit and two or more years in business for approval. Other lenders specialize in helping business owners with bad credit and startups get approved for financing.

Bottom line

Both Live Oak and U.S. Bank offer several business loan options. As SBA Preferred Lenders, both can help you get SBA loans faster than other lenders. But Live Oak is far more experienced in providing SBA 7(a) loans and offers a few extra benefits to its borrowers. U.S. Bank gives the best option for equipment loans.

Remember to look at multiple options before applying for a business loan. Consider your business needs and where you can get the most affordable deal on a loan.

  • Yes, Live Oak Bank is an SBA Preferred Lender. This means Live Oak can make final credit decisions on SBA loan applications without consulting the SBA. Live Oak also offers turnaround times on SBA loan applications three to four weeks faster than non-preferred lenders. And SBA Preferred Lenders usually provide longer repayment terms, lower payments and no prepayment penalties.

  • The difficulty of getting a business loan depends on a variety of factors. Each business lender has their eligibility requirements for loans. Generally, businesses with credit scores below 680 and less than two years in business will have difficulty finding a business loan at a bank.
  • SBA loans typically require a down payment. The down payment amount differs for each loan type and varies by loan amount. For a 7(a) loan, businesses typically need to put five to 10 percent down; 504 loans usually require a 10 percent down payment. For example, if you have a loan amount of $500,000 that requires a seven percent down payment, you will need $35,000 for a down payment.