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 make your business lending experience easy, starting with a streamlined application for our most popular loans: our Choice Credit℠ for Business Line of Credit and Choice Credit℠ for Business Term 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 over the phone at 1-800-762-5684, Mon - Fri 7am - 10pm ET and Sat - Sun 8am - 5pm 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 three times net worth.

Payment History with PNC

If the company has borrowed from PNC in the past, no late payments with PNC 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 or real estate with sufficient market value to more than cover the line amount. Term debt must be collateralized with marketable assets such as equipment or real estate with a value of typically at least 1.25 times the loan amount.

 

Important Legal Disclosures and Information

All loans and lines of credit subject to credit approval. Interest rate will be based on a review of your credit application, the loan product selected, and the loan amount. Business loans require automatic deduction from a PNC Bank business checking account. Origination and/or other fees may apply.