Are First Citizens Bank Business Loans Worth It?

(June 2024)

S'witty Kiwi Editors
June 30, 2024

Our Verdict

First Citizens Bank is a US-based financial institution that provides a range of banking and financial services to individuals and businesses. The bank operates over 500 branches across 21 states, including: California, Florida, Kansas, Arizona, Texas and Washington. First Citizens Bank offers personal banking services such as checking and savings accounts, loans, mortgages, and credit cards.

It also provides business banking services, wealth management and trust services, retirement planning, and insurance services. The bank has a strong online and mobile banking presence, and provides ATM access to its customers at all its branches. First Citizens Bank operates as a traditional bank with a focus on personalized customer service, while also offering online and mobile banking services.

Pros

Offers a wide range of banking and financial services for both personal and business needs.
Focuses on personalized customer service and traditional banking values.
Provides a strong online and mobile banking presence, allowing for easy account management and transactions.
Includes wealth management and trust services, retirement planning, and insurance services.
Maintains a large number of branches across 21 states, providing convenient access to banking services.

Cons

Charges some fees that may be higher than those at other banks, such as for overdrafts or out-of-network ATM use.
Offers interest rates on some accounts and loans that may be lower than those at other banks.
Provides limited options for investment products and services, compared to larger investment firms.
Limits geographic footprint, as branches are primarily located in the Southeastern and Northeastern regions of the United States.

Who This Product Is Best For

First Citizens Bank business loan may be best for:

Small and medium-sized businesses
Businesses that need financing for a variety of purposes, such as expanding operations, purchasing equipment or inventory, or covering short-term cash flow needs
Businesses that prefer to work with a local bank
Businesses that value personalized customer service and traditional banking values
Businesses that are willing to review loan terms and conditions carefully and ensure that they can afford the loan payments before applying.

Who This Product Isn't Right For

First Citizens Bank business loan may not be best for:

Startups or businesses without established credit history may find it difficult to qualify for a loan.
Businesses with a poor credit history or financial record may face difficulty in getting approved for a loan.
Businesses requiring a large loan amount may find that First Citizens Bank’s loan options are not sufficient.
Businesses requiring specialized financing products such as equipment leasing or factoring may need to look elsewhere.

What This Product Offers

Business Lines of Credit: First Citizens Bank provides business lines of credit to businesses that need to borrow money on an as-needed basis. These lines of credit typically come with variable interest rates and can be used for a variety of purposes, such as covering short-term cash flow needs or financing inventory purchases.

Business Term Loans: First Citizens Bank offers business term loans to businesses that need to borrow a fixed amount of money for a specific purpose, such as purchasing equipment or expanding operations. These loans typically come with fixed interest rates and flexible repayment terms.

Small Business Administration (SBA) Loans: First Citizens Bank offers SBA loans to businesses that need financing for a variety of purposes, such as working capital, equipment purchases, or real estate acquisitions. These loans are partially guaranteed by the SBA and typically come with favorable interest rates and longer repayment terms.

Commercial Real Estate Loans: First Citizens Bank provides commercial lending services to businesses that need financing for a variety of purposes, such as real estate acquisitions, equipment purchases, or working capital. These loans typically come with flexible repayment terms and competitive interest rates.

Healthcare Practice Loans: Healthcare practice loans provide financing to healthcare professionals, such as doctors, dentists, and veterinarians, to help them start or grow their practices. First Citizens Bank offers healthcare practice loans with competitive interest rates, flexible repayment terms, and customized repayment schedules.

Product Details

Healthcare Practice Loans

Healthcare practice loans from First Citizens Bank can provide you (healthcare professionals) with the financing required to start or grow your practices. With competitive interest rates, flexible repayment terms, and customized repayment schedules, these loans can help borrowers manage their cash flow while achieving their business goals.

Interest Rates: The interest rates for healthcare practice loans from First Citizens Bank can vary depending on the borrower’s qualifications and the purpose of the loan. Rates may be fixed or variable, and may range from around 5% to 8% or higher.
Loan Amounts: Healthcare practice loans from First Citizens Bank can range from $50,000 up to $5 million, depending on the borrower’s needs and qualifications. The loan amount may be determined based on the borrower’s financial history, credit score, and other factors.
Repayment Terms: Repayment terms for healthcare practice loans can vary depending on the loan amount and purpose. Loans for equipment or real estate may have longer repayment terms than loans for working capital. Terms may range from 5 to 25 years or longer.
Repayment Schedule: The repayment schedule for healthcare practice loans can be customized to fit the borrower’s cash flow needs. Monthly or bi-weekly payments are common, and some loans may offer a deferment period for the first few months.
Eligibility: To be eligible for a healthcare practice loan from First Citizens Bank, the borrower must be a healthcare professional, such as a doctor, dentist, or veterinarian. The borrower must also have a strong financial history, with a good credit score and a solid business plan.

Business Line of Credit:

With a business line of credit, you can borrow money up to a certain limit and pay interest only on the amount you borrow. This can be particularly useful for businesses that experience fluctuations in cash flow and need access to additional funds to cover expenses or take advantage of opportunities.

Interest Rates: First Citizens Bank’s business lines of credit typically come with variable interest rates. The specific interest rate you receive will depend on factors such as your creditworthiness, the amount of credit you’re seeking, and the overall health of your business. The interest rates on business lines of credit can range from 7% to 20%.
Loan Terms: The length of the repayment period can range from a few months to several years.
Loan Amount: The amount of credit you can access with a First Citizens Bank business line of credit will depend on a number of factors, such as your credit history, the health of your business, and the amount of collateral you’re able to provide. First Citizens Bank offers lines of credit ranging from $10,000 to $100,000 or more.

SBA Loans:

SBA loans offered by First Citizens Bank can provide a favorable financing option for small businesses that may not qualify for traditional loans or need longer repayment terms. The partial guarantee provided by the SBA can also provide added security for the lender, allowing them to offer more flexible terms and lower interest rates.

Loan Amount: The loan amount for SBA loans can range from $50,000 up to $5 million, depending on the borrower’s qualifications and the purpose of the loan.
Interest Rate: The interest rate for SBA loans can vary depending on the type of loan and the borrower’s creditworthiness. The interest rates are usually lower than traditional loans due to the partial guarantee provided by the SBA.
Loan Terms: The loan terms for SBA loans can range from 5 to 25 years, depending on the purpose of the loan and the borrower’s needs.
Repayment Schedule: The repayment schedule for SBA loans is usually longer than traditional loans and can be customized to fit the borrower’s cash flow needs. Monthly or bi-weekly payments are common, and some loans may offer a deferment period for the first few months.
Eligibility: To be eligible for an SBA loan, your business must meet certain criteria, such as being a for-profit entity, operating within the United States, and having exhausted other financing options. Your creditworthiness and collateral can also be put into consideration.

Where This Product Stands Out

Flexibility

First Citizens Bank stands out for its flexibility in offering a range of loan options to suit different business needs. Businesses can choose from lines of credit, term loans, SBA loans, healthcare practice loans, and industry-specific loans. This flexibility allows businesses to select the loan option that best fits their specific needs and financial goals. The personalized service offered by the bank’s loan specialists also helps businesses find the most suitable loan option. Ultimately, the flexibility of First Citizens Bank business loans allows businesses to tailor their financing to their specific needs and find the most favorable terms.

Industry-specific loans

First Citizens Bank offers specialized loan products tailored to meet the unique financing needs of different industries, such as construction, real estate, and agriculture. These specialized loan products provide features and benefits that cater to the specific requirements of businesses in those industries, such as flexible repayment terms, competitive interest rates, and customized loan amounts. The bank’s commitment to supporting businesses in various industries highlights its dedication to helping businesses access the financing they need to grow and succeed.

Favorable repayment terms

First Citizens Bank offers businesses flexible repayment terms on its loan options, depending on the type of loan. Lines of credit provide more flexibility with borrowing and repayment schedules, while term loans have fixed repayment schedules over a set period of time. The bank’s SBA and healthcare practice loans offer longer repayment terms than other loan options, which can help businesses better manage their cash flow.

Wide range of loan amounts

First Citizens Bank offers a broad range of loan amounts, making it possible for businesses of all sizes to obtain the funding they need to grow and expand their operations. Small businesses can apply for a microloan ranging from $5,000 to $50,000, while larger businesses can apply for loans that exceed $1 million. This flexibility allows businesses to access capital that is appropriate for their specific needs and growth goals, and pursue opportunities to take their operations to the next level.

Where This Product Falls Short

Stringent eligibility requirements

First Citizens Bank’s stringent eligibility requirements for some loan products, such as SBA loans and commercial real estate loans, may make it difficult for small businesses or startups without a long history of financial stability to qualify for financing. Additionally, businesses with poor credit or insufficient collateral may struggle to secure financing, limiting the bank’s ability to serve a broader range of businesses.

Limited availability

First Citizens Bank is a regional bank, with its branches mainly located in the southeastern United States (Arizona, California, Colorado, Florida, Georgia, Kansas, Maryland, Missouri, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia). This limits its availability to businesses in other parts of the country who may not have easy access to their loan products.

Potentially higher Fees

First Citizens Bank may charge higher fees than some other lenders in the market, including an origination fee and fees for prepayment or late payments. While these fees may not be excessive, they can add up and increase the overall cost of borrowing for some businesses, making borrowing from First Citizens Bank less attractive compared to other lenders with lower fees.

How to Qualify for This Product

The eligibility requirements for First Citizens Bank business loans can vary depending on the type of loan and the specific needs of the business. However, in general, businesses will need to meet the following criteria:

Credit score: Most loan products from First Citizens Bank require a minimum credit score of 680 or higher. However, some loan options, such as microloans or lines of credit, may be available to businesses with lower credit scores.

Proven track record of successful business operations: First Citizens Bank generally requires your business to have a proven track record of successful operations, with at least two years in business.

Detailed business plan: First Citizens Bank may require your business to provide a detailed business plan that outlines your growth strategy, financial projections, and how you plan to use the loan proceeds.

Adequate collateral: For secured loans, the bank may require collateral to secure the loan. The value of the collateral will depend on the amount of the loan and your creditworthiness.

How to Apply for This Product

While First Citizens Bank does not disclose its specific application requirements, a representative stated that the necessary documents may vary depending on the borrower’s situation. They suggested consulting with a First Citizens small business banker for guidance. However, most lenders typically require standard documents as well as lender-specific requirements when applying for a business loan:

Business tax returns (usually for the past two years)
Personal tax returns for all owners (usually for the past two years)
Articles of incorporation or organization
Partnership agreements
Business licenses and permits
Property appraisals (for commercial real estate loans)
Business financial statements (income statement, balance sheet, cash flow statement)

Alternatives to This Product

OnDeck

OnDeck’s loan application process is quick and straightforward, and applicants can usually get a decision within minutes. To apply, businesses will need to provide basic information about their business, including financial statements, tax returns, bank statements, and other lender-specific requirements. OnDeck offers term loans and lines of credit with varying interest rates, loan amounts, and repayment terms. To qualify, businesses generally need to have a minimum credit score of 600, at least one year in business, and a minimum annual revenue of $100,000.

Bank of America

Bank of America offers business loans, lines of credit, and commercial real estate loans. Interest rates are competitive, with rates starting as low as 2.75% for certain loan products. Loan amounts vary depending on the type of loan, but businesses can borrow up to $5 million for certain loan products.

Chase

Chase does not provide specific information about its application requirements for business loans, but generally, applicants will need to provide business and personal financial statements, tax returns, legal documents, and other lender-specific requirements. Chase’s loan options vary in terms of interest rates, loan amounts, and repayment terms, but generally, it offers secured and unsecured term loans, lines of credit, and SBA loans. To qualify, businesses typically need to have a good credit score and several years of business history.

Customer Reviews

First Citizens Bank had a score of 2.5 out of 5 stars based on 13 reviews on the Trustpilot platform. While some customers commended the bank’s customer service and user-friendliness, others have voiced complaints about the bank’s costs and onerous loan eligibility requirements.

First Citizens Bank has a rating of 3.8 out of 5 stars based on 65 reviews on the Consumer Affairs website. While some customers have raved about the bank’s services, others have expressed frustration with excessive wait times and unresponsive customer support.