Business and Commercial Loans and Lines of Credit
Want to develop your business further, but don't have the cash on hand to do it? Like many businesses, you need options.
Alaska USA offers affordable financing solutions whether you're making physical improvements to your business, buying equipment, or simply need the security of a line of credit.
- Term Loans
Save money with competitive rates
Grow your business with a variety of options
Secured and unsecured loans
More loan options
Need extra cash, a new location, or the latest equipment for your business? Make your plans happen with competitive rates on term loans from Alaska USA.
Secured and unsecured loans can help your business grow
Alaska USA offers business and commercial loans secured with cash, inventory, equipment, securities, or real estate. Unsecured term loans are also available.
Choose the financing and term that’s right for your business
Financing – The amount of financing depends on the loan type, as follows:
- Cash, equipment, or securities loans – $2,500 and up (please note that if you are a sole proprietor and your financing request is under $50,000, you should apply for an Alaska USA consumer loan).
- Inventory loans – $5,000 and up
- Real estate loans – $50,000 and up
- Unsecured loans – $2,500 to $100,000
Terms – Terms also vary according to loan type:
- Cash – Varies based on the purpose for the cash; typically one year
- Inventory – One year
- Equipment – New: seven years; Used: five years
- Securities – One year
- Real Estate – Up to 15 years (maximum amortization of 25 years)
- Unsecured – Three years
- Aircraft – 10 years
- Vessels – 10 to 15 years
Prepayment – None. Pay your regular monthly payment or pay in full at any time without penalty.
Autopay – You may choose to set up autopay from another Alaska USA account to ensure that your loan payment is made on time.
Fees – Depending on the type of loan, there may be a commitment fee and third party fees. In addition, late payment fees are assessed for all term loans.
Documentation for larger loans – For requests greater than $250,000, the following paperwork is necessary:
- Copy of business license, Partnership Agreement, Articles of Organization and Operating Agreement (LLC), Articles of Incorporation, and Bylaws (Corp).
- Past three (3) years complete business tax returns and past two (2) years personal tax returns.
- Most recent year-end personal and business financial statements, including a balance sheet and profit and loss statement.
- Current interim financial statement, including a balance sheet and profit and loss statement.
- Copies of any pertinent lease or contracts.
- For new or expanding businesses, a detailed business plan that includes projected income and expenses for the next 12 months.
- If buying property, provide a copy of the earnest money agreement.
- If buying or offering real property as collateral, legal description of the property and copies of any previous appraisals and environmental reports.
- Lines of Credit
Lines of Credit
Get cash when you need it with an Alaska USA line of credit for your business.
A line of credit is a type of loan that allows you to draw money as you need it up to your credit limit. Lines of credit are designed to meet short-term working capital needs.
Meet your short-term cash flow needs with a line of credit
A line of credit is invaluable for covering financial needs such as:
- Financing seasonal needs during peak business periods.
- Covering operating expenses that can be paid back in the near term, or to take advantage of prepaid supplier discounts.
- Overdraft protection for your Alaska USA business checking account (three no-fee advances per month).
Lines of credit are not appropriate for fixed asset acquisitions such as equipment, real estate, leasehold improvements, or other expenses for which repayment can only occur over a longer period of time. (Alaska USA does offer a variety of loan types and can work with you to get a loan that meets the needs of your business.)
Variety of credit line options to meet your needs
- Business lines of credit provide a credit line between $2,500 and $250,000.
- If you need more than $250,000, apply for a commercial line of credit.
- Unsecured lines of credit are available up to $100,000, subject to borrower qualifications.
Collateral – You can use real estate or business assets such as accounts receivable, inventory, equipment, or cash. If you don’t have collateral, Alaska USA offers unsecured business lines of credit up to $100,000.
Terms – Business lines of credit are revolving, letting you carry a balance indefinitely, based on an annual review. Commercial lines of credit typically mature in one year, but can be renewed annually, based on performance.
Fees – Typical fees may include: commitment fee, annual fee, late charge, overdraft protection advance, and third party fees.
Minimum advance – $100
Minimum monthly payment – For most lines of credit, you must pay at least the interest due each month ($25 minimum). An unsecured line of credit under $50,000 may require a minimum monthly payment of $50 or 2% of the balance, whichever is greater.
Account access – You can access your business credit line by withdrawal or transfer at any Alaska USA branch, through the Member Service Center, through UltraBranch®, or by mail.
- Overdraft Credit Line
Overdraft Credit Line
A Business Overdraft Credit Line functions as overdraft protection for your business checking account. Funds will automatically transfer from your Business Overdraft Credit Line in the event that overdraft protection is needed.
Protect your account and save on fees
- Relax knowing that payments you make from your checking account are covered.
- Save money on fees for Non-Sufficient Funds (NSF) and extra merchant charges for returned checks.
- Avoid potentially embarrassing situations.
Business Overdraft Credit Line – different from other overdraft protection options
- A Business Overdraft Credit Line can only be applied to business checking accounts.
- The rate differs from other types of credit lines offered by Alaska USA.
- The borrower is responsible for overdrafts made by any user listed on the account.
Available credit – Business Overdraft Credit Lines are unsecured and are available between $2,500 and $10,000.
Terms – The Business Overdraft Credit Line is revolving, letting you carry a balance indefinitely, based on an annual review.
Rate – The rate is Prime plus 6 with a Floor of 7%.
Annual Fee – Regardless of whether or not Borrower uses the Credit Line, a nonrefundable fee of 1% - 3% of the Credit Limit will be charged to Borrower's Credit Line at the time the annual review is performed.
Minimum transfer – $100
Minimum monthly payment – $50 or 2% of the balance, whichever is greater.
Notification of transfer – Any time overdraft protection has been activated, Alaska USA will mail you a notice. You can also monitor your account anytime through UltraBranch®.
Qualifications – To qualify for a Business Overdraft Credit Line, your business must have been in operation and profitable for the past three years. The owner must also have a qualifying credit score.
Other lines of credit available for your business
- Business lines of credit are offered between $2,500 and $250,000.
- If you need more than $250,000, you’ll want to apply for a commercial line of credit.
- Unsecured lines of credit are available up to $100,000, subject to borrower qualifications.
- Letters of Credit
Letters of Credit
Let Alaska USA help you build relationships with new vendors and ensure prompt payment by using convenient letters of credit.
A letter of credit serves as a guarantee that the vendor you’re working with will get paid. You apply to Alaska USA for a letter of credit using cash, real estate, or other business assets as collateral. Once you’re approved, Alaska USA will draw up an official letter of credit with a specific dollar amount guaranteed to a specific vendor. If you are unable to pay that vendor, Alaska USA is obligated to do so, and you will need to start making payments on the amount paid to the vendor.
Choose the letter of credit that's right for your needs
Alaska USA offers Standby and Commercial letters of credit in amounts of $2,500 and above.
Standby letters of credit – serve as an assurance to others that your business can meet its contractual obligations. They are only used as backup in case the business fails to pay. Standby letters of credit are often used to guarantee repayment of loans, to ensure fulfillment of a contract, or to secure payment for goods delivered by third parties.
Commercial letters of credit – help facilitate trading activity between your business and other businesses by providing a payment mechanism that is convenient for both you and your vendor. Once the conditions of the letter of credit are met by the vendor, Alaska USA will make payments on your behalf.
Advantages of a letter of credit from Alaska USA
By guaranteeing payment, a letter of credit from Alaska USA allows you to establish relationships with vendors who may not be familiar with your business. In addition:
- You can confirm that merchandise is shipped on or before a certain date.
- It’s safer than prepayment. You don’t have to pay cash up front before receiving and inspecting the purchased goods.
- You may get better terms and prices.
- You are protected since Alaska USA only pays when the vendor fulfills the specific terms and conditions you’ve stipulated in the letter of credit.
Collateral – You can secure your letter of credit with real estate or business assets such as inventory, equipment, or cash.
Terms – Letters of credit mature in one year, at which time you may apply for renewal.
Minimum monthly payment – Your minimum payment is the interest that has accrued on your balance (minimum $25).
Rates – Alaska USA offers competitive rates. For current rate information, visit alaskausa.org or call the Business and Commercial Services Department.
Fees – Fees vary and may include a commitment fee, a late charge fee, and third party fees.
- SBA Loans
The Small Business Administration (SBA) serves to aid, counsel, assist, and protect the interests of small businesses in the United States. Alaska USA offers a range of SBA supported loan programs in Alaska and Washington that offer longer loan terms and assistance in situations where a borrower may not have a great deal of working capital or sufficient collateral to qualify for a conventional business loan.
The SBA also provides assistance in procuring government contracts, a wealth of educational tools, as well as local resources that offer counseling, training, and business development support to help businesses find long-term success.
Your options with Alaska USA
Alaska USA offers several types of SBA loan programs to address the various needs of small business owners:
- 7(a) loan program - long-term financing for real estate acquisition, building construction, renovation or expansion, purchase of machinery and equipment, purchase of inventory, and working capital. Minimum $50,000.
- 504 loan program - long-term, fixed asset financing for the acquisition, construction, expansion, or renovation of land and buildings, or purchase of long-life equipment. Minimum $250,000.
- Express loan program - available for loans from $25,000 to $350,000.
Choosing the right loan
An Alaska USA Member Business Development Officer will work with you to determine which loan program is most appropriate, based partly on the following factors:
- The type and size of the business you own or are looking to purchase.
- The business' level of working capital.
- The amount and repayment term of the loan.
- What the money will be used for.
- The type, amount, and value of any collateral.
Loan eligibility criteria differ depending on the loan program. Common criteria considered when evaluating eligibility are:
- Whether funds are available from another source, such as an alternate lending institution on a conventional basis.
- Character, credit, and business experience of the borrower.
- Ability to operate a successful business.
- Adequate capital.
- Reasonable assurance of ability to repay the loan from business earnings and cash flow.
Interest rates & fees
Interest rates and fees differ depending on the loan program, borrower credit, and the amount and term of the loan. Talk with a loan officer for specifics.
* Currently Available in Alaska and Arizona only.
Start your home construction project with a residential construction loan from Alaska USA. It’s the perfect solution when you need to finance the building of a home from the ground up or for extensive remodeling.
Building on the future
When you want to build your own home, where do you begin? A residential construction loan is a short-term financing option that gives you the means to pay for construction as your new home is being built.
It’s affordable because you only pay the interest due each month. At the end of the loan term, you’ll need to pay off the construction loan. Most people do this with a new mortgage loan on the completed property.
Alaska USA residential construction loans require that you prequalify for a mortgage loan from Alaska USA Mortgage Company for at least the amount of the construction loan, and that you choose a contractor that meets Alaska USA’s requirements for approval.
Qualification – The home must be a one-to-four family home to be used as a member’s primary dwelling (excluding spec homes and land development).
Term – The initial term is up to 12 months. Members may be granted a one-time extension – up to an additional three months.
- Interest rates are variable and may adjust daily
- Low origination fees
- Inspection fees – a minimum of $75.00 will be assessed for each inspection
Repaying the loan –While the loan is outstanding, you’ll pay the monthly interest due. All principal is due at maturity, and can be paid with a mortgage loan.
Financing – You may borrow up to 80% of your home’s value (lesser of total construction cost or appraised value). Cost of construction includes land, cost to construct plus 10% contingency, closing fees, and estimated interest payments and other soft costs.
Approved contractors –General contractors must meet Alaska USA’s requirements for approval. Your request to add a contractor to the Alaska USA approved list will be considered if your contractor is not currently listed. General contractor qualifications include:
- Licensed and bonded with a residential endorsement
- Business license
- Primary business must be residential construction
- In business for the past five consecutive years and have built a minimum of five homes
- Satisfactory credit history and a Certificate of Insurance with appropriate limits
- Interest rates are variable and may adjust daily