American Express Small Business Loan & Merchant Financing Review
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 and for business who accept Amex credit cards.
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The box above covers American Express’ business loan.
American Express is typically associated with consumers and business credit cards, but approved business card holders may also benefit from the company’s small business financing options – including small business loans, merchant financing, and working capital loans.
American Express, which is headquartered in the World Financial Center in New York City, NY, has a robust collection of credit cards designed to meet the needs of both small and large business owners, but some cardholders may find that the company offers much more than that.
Today, Amex also offers select small business owners a variety of lending products. Eligible cardholders may not be able to visit a local branch, but they can apply online or over the phone, making Amex a convenient option regardless of where their businesses are located.
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Getting Small Business Financing Through American Express
Lending opportunities through American Express are only available to pre-approved business card holders who are in good standing. As such, existing Amex customers who have been pre-approved can log into their accounts to view the pre-approved amounts and APR.
After viewing the loan specifics, business owners can select a repayment term and, if approved, they can accept the loan online. Funds are then dispersed to the borrower’s bank account or, in the case of debt consolidation or working capital requests, to the specified business credit card or vendor accounts.
Since American Express Business Loans are only extended to select members, these loans are not typically an option for those with bad credit or those seeking start-up funds. Similarly, unlike many other financial institutions that specialize in small business products, American Express does not offer SBA loan options.
Basic Information: Rates, Terms, Fees, and Limits
All business financing options through American Express boast fixed costs, no origination fees, and automatic repayment solutions. 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 $2,000,000 and repayment terms include 6, 12, and 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%
If you repay your loan early, you may be able to receive a rebate of up to 25% of your fee depending on your term length and how fast your repay it.
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.
When it comes to loans through American Express, one of the most significant downsides is that it’s an exclusive lending program that requires pre-approval, meaning those without an American Express Business credit card, or those who are not in good standing, will not be eligible for available products besides the Merchant Financing option. Similarly, the pre-approval requirement may rule out American Express for emergency loan purposes.
Because American Express is not a traditional bank and therefore does not offer a comprehensive banking solution (e.g., checking, savings, branch locations, etc.), business owners seeking a one-stop banking solution may not see American Express as the best fit for their long-term banking and financing needs.
Those who are approved for small business loans through American Express can find that their products may be able to unlock great rates and easy account management; however, for many business owners, this finance option can be just out of reach. If you are not approved for a small business loan, you could check to see if you are approved for an American Express personal loan.
Author: Jeff Gitlen