Establishing business credit is a top priority for many small business owners, particularly if you want to expand your business over time. 

Tier 1 and tier 2 vendors can help you get started. But once your business has been around for a few years and established a positive repayment history, you may be ready for tier 3 vendors, which include banks, credit unions, and online lenders.

Tier 3 Lenders

It can take some time to build up to tier 3 business credit vendors (and lenders), but once you do, you’ll have an opportunity to obtain long-term financing to expand your business in ways you haven’t before. Here are some of the top vendors that can help.

The Huntington National Bank

Huntington Bank offers a variety of business loans and lines of credit, including:

• Term loans
• Lines of credit
• Real estate loans
• Dental practice loans
• Veterinary practice loans
• SBA 7(a) loans
• SBA express loans
• SBA 504 loans
• SBA lift local business loans

The average loan size for Huntington Bank borrowers is $167,310, but you may be able to borrow as much as $5 million with an SBA loan, depending on your needs and eligibility. Loan terms can vary, but you’ll need to speak with a loan specialist for more information.

While Huntington Bank offers business loans across all 50 states, it only has physical branches in 11 states, which could be a deal-breaker if you prefer in-person service. 

TD Bank

TD Bank operates primarily on the East Coast, with locations in 16 states and the District of Columbia. If you live within 100 miles of one of the bank’s physical branches, you may be eligible for a loan. TD Bank offers the following business financing options: 

• Term loans
• Lines of credit
• Real estate loans
• SBA 7(a) loans
• SBA express loans
• SBA 504 loans

The average loan size for TD Bank borrowers is $110,923, but you can borrow up to $1 million with a term loan or real estate loan, $500,000 with a line of credit, and $5 million with an SBA loan. 

If you want to borrow less than $100,000, you can do so online. If you need more than that, you’ll need to apply in person.

Wells Fargo

One of the largest banks in the U.S., Wells Fargo offers several options for small businesses, including:

• Lines of credit
• Healthcare practice loans
• Real estate loans
• Real estate equity loans
• Real estate lines of credit
• SBA 7(a) loans
• SBA 504 loans

While Wells Fargo doesn’t offer general term loans, it can be an excellent option for small business owners looking for commercial real estate financing options. 

The average loan size is $199,596, but lines of credit can range up to $500,000, real estate loans can go as high as $1 million and SBA loans can be as much as $5 million.

U.S. Bank

Another major national bank, U.S. Bank offers several options, including some that other tier 3 business credit vendors on our list don’t offer. Here’s what you can expect:

• Term loans
• Lines of credit
• Real estate loans
• Equipment loans
• Healthcare practice loans 
• McDonald’s franchise loans
• SBA 7(a) loans
• SBA 504 loans

The average loan size for U.S. Bank business loans is $114,615. However, you can borrow up to $1 million with term loans and lines of credit, $10 million with real estate loans, $500,000 with equipment loans, and $12.375 million with SBA loans.

Newtek Small Business Finance

If you have larger financing needs, Newtek can be a great alternative to other tier 3 business credit vendors. Newtek offers term loans and lines of credit, with an impressive average loan size of $595,118. 

The lender’s term loans go as high as $15 million, while its credit lines can be as much as $1.5 million. Although it doesn’t offer more specialized types of business financing, the wide range of loan amounts can provide enough flexibility for many business owners.

What Are the Tiers of Business Credit?

There are four tiers of business credit that you can obtain, generally beginning at tier 1 when you’re just starting out and moving up as you establish your credit history.

Tier 1

Tier 1 business credit describes basic vendor trade credit. You generally don’t need to have an established credit history to get approved. 

You’ll typically sign up with a vendor to buy items like office supplies, furniture, inventory, and other products and services. Then, you’ll typically have a set period of time to pay off the purchase without incurring interest. 

Always pay on time or even early, and certain vendors will report that information to one or more of the business credit bureaus. Just keep in mind that some tier 1 business credit vendors may require that you have some credit history before you can be approved.

Tier 2

Tier 2 business credit is considered to be advanced trade credit. It’s similar to tier 1 business credit, but you may get longer repayment terms, larger credit lines, and even more options, such as equipment financing. 

You’ll typically need to spend some time building your business credit history with tier 1 vendors before qualifying for tier 2 options.

Tier 3

As previously mentioned, tier 3 business credit is financing that you can obtain through banks, credit unions, and online lenders. You can obtain term loans, lines of credit, SBA loans, business credit cards, and more. 

The credit, operating history, and revenue required to get approved for tier 3 business credit can vary. With business credit cards, for instance, you don’t need a business credit history, but you absolutely do need it for most term loans, lines of credit, and SBA loans. 

Tier 4

With tier 4 financing, you’re not utilizing credit at all. Instead, you’re enlisting the help of private investors, angel investors, or venture capitalists to obtain capital for your business. 

While you don’t have to repay any money you receive with this type of financing, you may need to give up some of your ownership in the company. 

You’ll also need to put together a good enough picture of your business to show investors that it’s worth investing in.

The Bottom Line

If you’re looking to expand your business, tier 3 business credit vendors can provide you with the financing you need to do it. But in many cases, you need an established business credit history first. 

While tier 1 and tier 2 business credit vendors can help, you may also consider CreditStrong’s business credit builder account. 

There’s no hard pull on your credit profile, and you can add an installment loan with monthly payments to your credit mix to help you build your business credit over time. 

CreditStrong for Business is the only 0% interest business credit builder in the nation

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