Business Lending Guide
Ensuring access to the financing you need — when you need it — is critical to the success of any business.
Evaluating Your Credit Requests
This lending overview will help you better assess your creditworthiness when applying for new or additional revolving or fixed-term financing at PNC Bank. These guidelines are not the only criteria for a final credit decision, but they will empower you to better understand your financial position in the context of PNC’s business lending practices. We want to help you choose the right loan for your business conditions, matching the best rate, term and other features to your individual needs and as part of a larger cash flow conversation.
In reviewing loan requests, we work through a continuum of credit solutions — starting with conventional unsecured and secured loans, then SBA-guaranteed loans and other government-sponsored lending programs — to ultimately find the best match and process more approvals for our business customers.
Building the Credit Profile
When you apply for a business loan from PNC, we will evaluate the business attributes outlined in the chart below, along with other financial and non-financial factors, to establish the overall credit profile of your business. Greater loan amounts and higher transactional complexity may introduce other factors and requirements for establishing a credit profile.
The Business Borrowing Experience
We’ll help simplify your business lending experience, starting with a streamlined application for our most popular loans: our Small Business Line of Credit and Small Business Loan. Your PNC Business Banker will walk you through the lending process and help you gather all necessary information to apply. Enjoy the convenience of applying at any PNC Bank branch, or by phone at 1-800-762-5684, Mon – Fri 8 a.m. – 9 p.m. ET.
What We Consider in Evaluating your Credit Request
These guidelines are only a sample of some of the criteria PNC Bank utilizes in evaluating requests for extensions of credit, and are for illustrative purposes only. Other financial and non-financial factors are evaluated in determining whether or not to extend credit.
Attribute |
Evaluation Criteria |
Personal Credit History of Owner(s) |
Business owner(s) will be required to guarantee any bank loans. Therefore, a clean personal credit history of five or more years typically with no recent 30-day late payments is desired. Significant loan balances or open credit accounts can diminish creditworthiness. No evidence of collection accounts, charged-off accounts, foreclosures, unsatisfied tax liens, judgments or lawsuits. |
Business Credit History (Equifax Commercial Credit Report) |
A history of paying financial obligations of all types on time. No evidence of bankruptcy, unsatisfied tax liens, judgments or lawsuits. Significant loan balances or open credit accounts can diminish creditworthiness. |
Years in Business |
Generally, a minimum of three years in business under the same ownership for traditional business lending solutions. Other credit solutions may be available for newer businesses. |
Company Financial Trends |
Upward or stable trends in revenues, gross profit margins, and net profit margins. Historically, operations are profitable. |
Business Debt Service Coverage |
A business’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) must be more than its annual forecasted principal and interest payments. |
Debt-to-Income Ratio |
The personal debt payments of the owner(s) subtracted from their income should allow for about 60% left for payment of living expenses and taxes. |
Leverage |
A company’s proportion of total liabilities to the company’s net worth. Stronger companies have more net worth than liabilities. Liabilities typically should not exceed four times net worth. |
Payment History with PNC |
If the company has borrowed from PNC in the past, no late payments or charged-off loans. |
Recent Checking Overdrafts |
If the company has a checking account with PNC, little or no overdraft activity. |
Industry Type |
Companies that operate in volatile or cyclical industries must show longer time in business and strong financial performance. |
Net Worth of Owner(s) |
The strength of the owner’s personal net worth demonstrates secondary repayment support. |
Collateral |
Strong, marketable collateral provides secondary repayment support. Typically, lines of credit must be secured by a business’s current assets with sufficient market value to cover the line amount. Term debt must be collateralized with marketable assets such as equipment or real estate to cover the loan amount. |
Important Legal Disclosures and Information
All loans and lines of credit subject to credit approval and require automatic payment deduction from a business checking account. Additional fees may apply.
Bank deposit, treasury management, and lending products and services are provided by PNC Bank, National Association, a wholly owned subsidiary of PNC and Member FDIC.
PNC is a registered mark of The PNC Financial Services Group, Inc.
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