BMO Harris Business Loans Review

(April 2024)

BMO Harris Business Loans Review

In This Article

Our Verdict

Think of a BMO Harris business loan if you want a pure “regional play,” meaning you need business funding from an institution that lacks broad geographical coverage yet boasts a strong balance sheet along with solid know-how in lending to small and midsize businesses operating within a specific geographical span.

Not a banking biggie by all means, BMO—as “BMO Harris Bank” is known to most people—can still serve your business funding needs, thanks to its robust and multifaceted operations across nine states, 500+ branches and over 40,000 ATMs.

Consider yourself lucky if your business is located in—or has direct connection to—Illinois, Indiana, Arizona, Missouri, Minnesota, Kansas, Florida and Wisconsin. If you need a business lender who serves other jurisdictions, you’d better use another bank (or credit union).

BMO seems tempting with its affordable rates, “personal touch,” and relatively fast loan processing, but its less-than-stellar customer service could give you pause if, of course, you care about that sort of things.

BMO

Corporate Headquarters

320 S. Canal Street Chicago, IL 60606

Phone Number: 888-340-2265

www.bmo.com

Pros

  • SBA Preferred Lender
  • Affordability of business loan terms and conditions
  • Variety of business financing options
  • Reduction of business loan rates with autopay
  • Business loan calculator tool

Cons

  • Impossibility of applying for a business loan online
  • Limited geographic reach (9 states)
  • Poor customer reviews
  • Lack of transparency on business loan cost

Who This Product Is Best For

who this product is for

Consider BMO for a business loan if your business:

  • Has an existing relationship with the bank (and loves it!)
  • Operates in one of the nine states BMO serves
  • Seeks a solid SBA Preferred Lender
  • Don’t require significant financing
  • Wants a regional bank that underwrites loans relatively fast

Who This Product Isn't Right For

Forget about BMO if your business needs a loan but:

  • Wants an online loan application
  • Cares about customer service before, during and after loan closing
  • Needs substantial financing (large loan amounts, for example)
  • Prefers a business lender extremely fast when it comes to closing

What This Product Offers

  • Business loans: Talk to BMO if your business needs a lump sum at a fixed rate you can repay over a specific time period.
  • Business lines of credit: Consider BMO as your business lender if you need revolving credit that helps you maintain operational cash flow while/if your customers are slow in paying their invoices.
  • Business real estate loans: Need cash for renovating/developing commercial property? Maybe BMO can help.
  • SBA loans: Consider BMO your bank of choice for SBA loans, especially if you need an affordable government-backed loan real quick.
  • Overdraft protection: Get this product to cover unexpected business expenses, especially if you need a small, “temporary” loan to cover a cash flow gap (negative balance) in your BMO business checking or savings account.
  • Equipment financing: Rely on BMO funding to buy the equipment or piece of machinery your business needs to bolster or maintain its operations. Keep in mind the equipment serves as collateral for the loan, though—and you may lose such asset if your business defaults on the loan.
  • Leasing: Work with BMO if you need business leasing, a transaction structurally similar to equipment financing but contractually different in the sense that your business does not retain ownership in the underlying asset during the lease period and must transfer such asset over to the lessor at the end of the lease. (BMO can provide 100% of the leasing amount, though.)

Product Details

Don’t count on BMO to be transparent when it comes to business loan costs, terms and conditions. (The bank isn’t the only, though—Players from Wells Fargo and Chase to Fifth Third and PNC do the same thing.)

Need more information about BMO business loans? Pick up the phone and call customer service—or, even better, visit the bank’s nearest branch.

Business loans

Get anywhere from $100,001 to $1,000,000 as a business loan from BMO. You can collateralize—or not—the loan, but if you pledge collateral, BMO charges you a lower interest rate to account for the reduced risk stemming from the asset-based transaction. Rates, fees and loan duration aren’t clear on BMO’s website, but one thing for sure: You get a 0.25% discount rate if you activate autopay during the loan repayment process. (Keep in mind you still qualify for a BMO business loan even if you’re a sole proprietorship.)

Business lines of credit

BMO gives you $10,000 to $1,000,000 as a business line of credit under conditions analogous to what it grants you for its business loan (straightforward application, autopay discount, etc).

Real estate loans

Have pending commercial real estate projects you’d like to finance? Reach out to BMO today! With loans oscillating from $100,001 to $1,000,000, BMO helps you finance owner-occupied residential real estate deals (1st or 2nd lien) via a simple application process.

SBA loans

Talk to BMO if you need a government-backed business loan from an SBA Preferred Lender. The bank can support your company’s funding needs through a constellation of loan programs ranging from SBA 7(a), SBA Express and SBA 504 to SBA CapLine, 7(a) small loan, SBA Export Working Capital, and International Trade Loan.

Rest assured that all BMO’s SBA loans guarantee a low down payment, no interest-only payments, and longer terms and amortizing payments—with APRs ranging from 7.44% to 24.17%.

SBA 7(a)

Use this business loan for business development—buy land, acquire or expand your business, buy equipment, expand working capital etc. Take advantage of BMO SBA 7(a)’s repayment term of 25 years if you use it as commercial real estate. Be careful, though: Remember the repayment period can reach up to 10 years for working capital and business acquisition loans.

SBA Express

Apply for an SBA Express revolving line of credit if you need one with a draw period and a repayment term spanning cumulatively 7 years or less.

Alternatively, get an equipment loan maturing in 10 years or less—or get a commercial real estate loan with a 25-year-maximum repayment window. Through SBA Express, you can get business loans amounting to $350,000 maximum—or $500,000 under a related program called Export Express.

SBA 504

Consider an SBA 504 loan if you need business funding with a repayment window oscillating from 10 to 25 years for equipment and commercial real estate financing.(Keep in mind this loan’s amount can go all the way to $5 million but has a special disbursement structure.)

The cool thing is, BMO pays 50% of the amount, while the government pays 40% through a Certified Development Company. If the requested amount is for a special purpose, make sure you have the remaining 10% available.

SBA CapLine

Get this loan as contract financing, revolving working capital and/or seasonal working capital. It gives out a maximum loan amount of $5 million and requires a repayment term up to 10 years for lines of credit.

International Trade Loan

Is your business exporting goods and/or services? If yeah, think about an international trade loan, whereby you get financing for permanent working capital that can reach a 10-year payment term. Also, the tenor of its commercial real estate financing can go as far as 25 years—and the amount given can reach $5 million.

Overdraft protection

Need a business loan that requires no collateral and upfront fee? Try overdraft protection. With loan amounts up to $10,000, you only pay interest when you use the cash.

Equipment financing

Think about BMO if you need equipment financing amounting to $5 million maximum with a repayment window never exceeding 25 years.

Leasing

Be prepared to work with BMO and its partner American Capital Financial Services, Inc. if you need funding for equipment leasing. The cool thing is, this partnership gives you an array of equipment lease options to choose from—you name it…telephone systems, office furniture, construction equipment, commercial vehicles, medical equipment and more.

At the end of the lease term, you have the option to purchase the equipment, either by a balloon payment or a large payment. For lease amounts up to $150,000, you can get quick approval between 4 to 6 hours of sending in your application.

Where This Product Stands Out

Numerous business loan options

Take advantage of BMO’s variety of business funding offers, from term loans to commercial real estate loans, and from SBA loans to overdraft protection and equipment financing.

Discount with Autopay

Don’t forget to grab the 0.25% discount on business term loans and credit lines when you make loan payments automatically from your BMO business checking account.

Numerous branches in its geographic domain

BMO has over 500 branches in 9 states: Florida, Arizona,  Illinois, Indiana, Kansas, Minnesota, Missouri, California, and Wisconsin—meaning BMO is strong in its coverage geography.

Multiple SBA products

Contact BMO if you need an SBA loan with flexible terms and conditions. As an SBA Preferred Lender, BMO has the experience, personal and balance sheet to back you up on a wide range of SBA loans with long-term payment options up to 25 years.

(Keep in mind SBA loan amounts can also be up to $5 million with a competitive interest rate as low as 7.44%, depending on the transaction.)

Where This Product Falls Short

Limited geographical availability

Don’t count on BMO to give you the kind of large geographical coverage that, say, a banking giant such as Chase or Wells Fargo can provide. Remember that the bank is only available in 9 states, which may be detrimental to your business’s operations.

Annoying fee for closing accounts

Stay away from BMO if you want to avoid closing fees they charge if you decide to close your business accounts within 90 days of opening them.

Lack of transparency with amounts, rates, terms, and fees

Don’t expect BMO to publicly reveal to you on its website any information about its business loan amounts as well as corresponding terms, fees and repayment windows. (BMO advises you to contact a business loan rep at the nearest branch so you can start a conversation.

How to Qualify for This Product

BMO wants to fund your business if it’s been operating for at least one year(for SBA loans)—or two years for conventional business loans. Maintain decent, consistent revenue to prove your business can repay whatever the monthly loan installment is.

Other things to keep higher than average: credit score (both business and personal), income, cash flow and collateral. A very simple motto here: The higher, the better. If you can show an elevated number in income, FICO score and cash flow, you stand a higher chance to get from BMO the business loan you want. (BMO has no soft pull process for business loans, so the bank hard-pulls your personal credit right away.)

How to Apply for This Product

BMO is tight-lipped when it comes to divulging application procedures for its business loan. (You best bet is to talk to a BMO business banker directly, so you get all the intel about business financing at the bank.)

To apply for a BMO business loan:

  • Visit the nearest BMO branch in person,
  • Schedule a meeting with a business banker, or
  • Call 1-888-340-2265 to apply on the phone.

Get acceptable forms of Identification and proof of address (like a valid driver’s license, Social Security Card, State-issued Identification Card, etc. Also, be ready to provide business financial statements and Tax Identification Number as well as personal and business bank statements. You might also need to show your business’s certificate of incorporation, bylaws and certificate of good standing, among other things.

Alternatives to This Product

Bank of America

Choose Bank of America if you need a larger bank with a national presence and a strong balance sheet to boot. It has a presence in all 50 states and offers more financing products than BMO. You can get SBA funding through Bank of America, and the bank also approves larger loan amounts compared to BMO.

Wells Fargo

Wells Fargo is somewhat similar to Bank of America—in terms of its dominance over BMO—but the analogy stops there. Wells Fargo doesn’t provide as varied a business loan offer as Bank of America, but it will fulfill needs if you need commercial real estate loans, secured and unsecured lines of credit, term loans, equipment financing, health care practice loans, merchant cash advances, working capital loans, accounts receivable financing, and SBA loans.

Customer Reviews

BMO Harris Bank has poor customer reviews of 1.07 out of 5 on its Better Business Bureau profile. This is largely due to complaints from customers about its poor customer service and delays in resolving issues. However, this rating is not bad when compared with other traditional banks out there because most local banks get relatively low ratings like BMO Harris Bank. For instance, Bank of America, despite being a larger bank than BMO, only has a 1.06 star out of a possible 5 on Better Business Bureau’s website. Therefore, this rating doesn’t project the bank as a red flag option, it only majors on its poor customer service rather than its financial stability.

Methodology

We reviewed BMO Harris business loans based on 35 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We rated BMO Harris business loans based on the weighting assigned to each category:

  • Loan cost: 35%
  • Loan details: 25%
  • Customer experience: 20%
  • Eligibility and accessibility: 10%
  • Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and

applicable fees. We also looked at minimum credit scores and time in business requirements and the geographic availability of the lender. Finally, we evaluated BMO Harris business loans customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.

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