Wells Fargo vs. Live Oak: Which small business lender is right for you?
Key takeaways
- Wells Fargo and Live Oak Bank both offer SBA loans
- Choose Wells Fargo for business lines of credit
- Choose Live Oak Bank for SBA loans
Wells Fargo and Live Oak Bank both offer several small business loan options. While you currently won’t find as many business lending options as with other small business lenders, they both offer SBA loans and some commercial lending products.
The best small business lender for your business will depend on your business needs. Keep reading to learn how Wells Fargo and Live Oak Bank compare and which may be best for your business.
Wells Fargo vs. Live Oak Bank at a glance
Wells Fargo offers multiple business lines of credit in addition to SBA loans. While Live Oak may not have as many lending products as Wells Fargo — and doesn’t provide much information on products outside of SBA loans — they offer higher SBA loan amounts with a slightly lower personal credit score requirement. Wells Fargo’s requirements for its lines of credit are similar to most traditional bank business lenders, which means startups or newer businesses may not qualify.
| Wells Fargo | Live Oak | |
|---|---|---|
| Bankrate Score | 4.2 | 3.0 |
| Best for | Business lines of credit | SBA loans |
| Number of loan products | 5 | 4 |
| Loan amounts | $5,000 to $10 million | Up to $15 million |
| Interest rates | 9.00% APR – 18.25% APR | Not stated |
| Term lengths | Up to 25 years | Up to 25 years |
| Personal credit score | 680 | 650 |
| Minimum time in business | Less than two years | Not stated |
| Minimum business revenue | Not stated | Not stated |
Wells Fargo business loans
Wells Fargo offers several business lending products, including SBA loans and three business lines of credit — the BusinessLine®, the Small Business Advantage® and the Prime line of credit.
Wells Fargo has a personal credit score requirement of 680 and a time in business requirement of two years, so their business lines of credit are better suited for more established businesses.
But, their Small Business Advantage® line of credit is backed by the U.S. Small Business Administration, with a time in business requirement of less than two years. APRs are higher, and lending amounts are lower than its other lines of credit, but it is a good option if you prefer a traditional bank lender and don’t have two years or more in business.
Pros
- Rewards program
- SBA loan lender
- Multiple line of credit options
Cons
- Personal guarantee may be required
- Potential annual fee
- Limited loan options
Live Oak Bank business loans
Live Oak offers SBA 7(a) loans, SBA 504 loans, USDA loans and conventional business loans. Although the LiveOak website does not confirm requirements, 7(a) and 504 loans require your business to meet requirements set by the SBA and Live Oak, which can include collateral over a certain dollar amount and a down payment. Terms for SBA loans vary from 10 to 25 years, depending on what you’re using the funds for.
USDA rural development loans are available to businesses that meet specific rural requirements from the USDA. Live Oak has limited information on its site about USDA loans, so you’ll need to contact them directly for more information.
Live Oak Bank also doesn’t disclose interest rates for its loans, but they are required to be within the SBA interest rate caps.
As online information is limited, you’ll want to contact Live Oak directly if you’re interested in other commercial loans.
Pros
- Weekend customer service availability
- Dedicated business analyst manages your loan
- SBA Preferred Lender
Cons
- Limited information available on website
- Industry restrictions
- No online portal for loans
How to choose between Wells Fargo and Live Oak
Choosing between Wells Fargo and Live Oak will likely depend on your business’s needs. While both offer SBA products, if you’re specifically interested in SBA loans or are a newer business, you may have an easier time meeting Live Oak’s requirements. If you’re interested in other types of lending products outside of SBA loans, Wells Fargo’s business lines of credit are fairly adaptable, but you’ll need good-to-excellent credit as with most traditional lenders.
Choose Wells Fargo for business lines of credit
Wells Fargo offers three different business lines of credit with both secured and unsecured options, depending on customer needs. Their rates are competitive as long as you meet their lending requirements. But, the amount of time in business required differs for Wells Fargo’s line of credit options, so less established businesses may still qualify.
If a business has been established for a longer period and is looking for a larger loan amount with a competitive rate, the BusinessLine® and Prime lines of credit have loan amounts ranging from $10,000 to $1 million.
While Live Oak offers other commercial lending products, they don’t provide much information online, making Wells Fargo more accessible.
Choose Live Oak for SBA loans
Both Wells Fargo and Live Oak offer SBA loans, but Live Oak is the best lender for SBA loans as that’s its primary focus. They also offer loan amounts up to $15 million — $5 million more than Wells Fargo.
Like Wells Fargo, Live Oak is an SBA Preferred Lender, meaning they can approve loans themselves, cutting out the wait time it takes other lenders to get SBA approval. This sped-up process and Live Oak’s focus on SBA loans can help your business quickly get the SBA-guaranteed funds it seeks.
According to the SBA lender report, Live Oak approved over $1.8 billion in SBA loans in fiscal year 2023, while Wells Fargo has approved over $427 million.
Alternatives
Wells Fargo and Live Oak aren’t the only small business lenders. As you review small business financing options, look at your needs and determine what’s important.
For example, Accion Opportunity Fund offers microloans starting at $5,000, with maximum amounts of $250,000. And with its lenient lending requirements, it provides accessible financing solutions to a diverse range of businesses, particularly those owned by minorities.
Business owners can also consider SBG Funding, which offers larger loan amounts of $10,000 to $10 million and same-day funding. However, this lender requires an annual revenue of at least $400,000.
As an alternative to these loan types, you could also get a business credit card. While similar to a business line of credit, a business credit card can provide more flexibility. Business credit cards often come with an option to earn rewards or introductory APR offers, and you won’t be any interest if your balance is paid in full every month.
Bottom line
The best lender will be different for every business. Wells Fargo and Live Oak Bank small business loans have pros and cons depending on your business’s needs. While Wells Fargo is good for businesses seeking lines of credit, Live Oak Bank is a solid choice for SBA loans due to it being one of the top SBA 7(a) originators for 2023. To choose the best lender for your business, consider your needs and compare loan types, interest rates and other requirements from multiple lenders.
Frequently asked questions
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The time it takes to get approval for a Wells Fargo business line of credit differs by the type of credit line you want. Once you apply for the Wells Fargo Prime Line of Credit, it typically takes two weeks to process your application after you submit the required documentation. The lender doesn’t offer specific approval timelines for the other two business lines of credit they offer but states you’ll receive written notification of a decision.
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Yes, Live Oak Bank is an SBA lender, specifically an SBA Preferred Lender. This means they can provide quicker approval times than other lenders that offer SBA loans.
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To open a basic business checking account with Wells Fargo, you will need to provide an initial deposit of at least $25. After that, you can avoid a $10 to $75 monthly service fee by meeting a minimum daily balance or average combined deposit amount or by using an earnings allowance to reduce the fees. However, this is not required to keep your bank account open.
