Capital One vs. Wells Fargo: Which small business lender is right for you?

Capital One and Wells Fargo are major banks with business bank accounts and limited loan products. Both banks also offer physical branches with in-person support, though Wells Fargo has thousands of more locations.

To choose between the two lenders, you have to dig into the specifics of their loan offerings and decide which one suits your needs best. Wells Fargo provides three business lines of credit, including one accessible to startups. It’s also a top SBA lender, servicing thousands of SBA 7(a) loans each year.

Capital One is the way to go for commercial real estate loans or if you’re looking for an SBA Express loan or line of credit. SBA Express loans offer quicker approvals and lower loan amounts than normal SBA loans. Let’s look at both Capital One and Wells Fargo business loans to compare each in depth.

Capital One vs. Wells Fargo at a glance

Both Capital One and Wells Fargo have the power to grant small and high-dollar business loans, including SBA loans. But they provide slightly different loan offerings.

Capital One specializes in several commercial real estate and SBA loans but also offers high-limit business lines of credit. Wells Fargo’s business loans focus on multiple business lines of credit and SBA loans. It’s also one of the best traditional banks for business loans that you can find.

	Capital One	Wells Fargo
Bankrate Score	3.2	4.2
Best for	Multiple loan options	Business lines of credit
Number of loan products	8	5
Loan amounts	Up to $5 million	$5,000 to $10 million
APRs	Not stated	From 9.00%
Term lengths	Up to 25 years	Up to 25 years
Personal credit score	Not stated	680
Minimum time in business	2 years No minimum for SBA loans	2 years for most loans Startups can qualify for SBA-backed line of credit
Minimum business revenue	Not stated	Not stated

Capital One business loans

Capital One business loans include revolving and non-revolving business lines of credit, four SBA loans and several types of commercial real estate loans. You can access up to $5 million in funding with most loans, including business lines of credit which is an unusually high credit limit.

It also offers more SBA loan options than most lenders, and according to a spokesperson, you don’t need to meet a set time in business to qualify. Most SBA lenders require at least two years in business.

Capital One also provides direct lending support by connecting you with a business banker in person from start to finish. So you’ll need to live near one of its over 750 branches to apply. You’ll also need to have or open a Capital One business checking account to be eligible for the business loan.

Pros

• Variety of business loans
• High loan amounts
• Relaxed SBA loan criteria

Cons

• Capital One account required
• Must apply in person
• Undisclosed loan details

Wells Fargo business loans

Wells Fargo small business loans include three business lines of credit as well as SBA 7(a) and 504 loans. And as a prolific SBA Preferred Lender, Wells Fargo can potentially process SBA loans faster than most SBA loans get approved.

Wells Fargo’s business lines of credit offer tiered lending criteria:

• Wells Fargo BusinessLine® line of credit is available if you’ve been in business two or more years
• Wells Fargo Small Business Advantage® line of credit if you’ve been in business less than two years
• Wells Fargo Prime Line of Credit is an option for businesses that typically make $2 to $10 million per year in sales.

Wells Fargo has also opened up thousands of branches and serves small businesses across all 50 U.S. states, making it widely available. You can also expect low business loan interest rates, starting at 9.00 percent. Low-interest loans are typical for a bank lender, but you’ll need strong credit to achieve them. Most loans require a minimum personal credit score of 680.

Pros

• Low starting rates
• Top SBA lender
• Multiple business lines of credit

Cons

• Charges annual fees
• Few conventional loans
• Requires personal guarantee

How to choose between Capital One and Wells Fargo

Capital One works well for small businesses willing to keep their business checking with the brand and for businesses that also have a Capital One branch nearby. Small business owners will need to chat with a business loan specialist in person to discuss loan options. Unless you’re vying for an SBA loan, you’ll need at least two years in business to be considered for its other loans.

Wells Fargo may be the best match for small businesses needing a business line of credit. Its three lines of credit options cater to everyone from startups to high-value businesses. Wells Fargo may also be the better choice if having a wide bank network is important to you, either as you travel for business or for availability in your area.

Let’s look at each lender’s top benefits to help you choose the best bank lender for you.

Choose Capital One for multiple loan options

Of the two lenders, Capital One provides the most business loan options, including multiple business lines of credit, real estate loans or SBA loans.

For business lines of credit, you can choose a revolving or non-revolving line up to $5 million, one of the highest limits available. A revolving line of credit is most common, letting you draw from it as you need new funds. But non-revolving lines let you prequalify for a loan amount that you can use for a specific purchase. For real estate, you can choose from standard commercial real estate loans, investor loans or common interest realty association loans.

Or if you’re in the market for an SBA loan, Capital One offers more SBA loans than most lenders, including Wells Fargo.

Choose Wells Fargo for business lines of credit

Wells Fargo is one of the few lenders to keep three business lines of credit in its lending suite. Startup businesses can apply for the SBA-guaranteed Small Business Advantage line of credit, which has credit limits up to $50,000. According to a representative, there’s also no annual revenue considered, a rarity for an SBA loan. Small businesses with at least two years of experience can go for its unsecured BusinessLine line of credit, offering limits up to $150,000.

When you’re approved with either of these, your business will be automatically enrolled in the Wells Fargo Business Rewards program. You’ll receive a Mastercard letting you make card purchases directly from the credit line, and you’ll earn rewards with qualifying purchases.

Highly profitable businesses can access Wells Fargo’s secured Prime Line of Credit with limits up to $1 million. Your business will need at least $2 million in annual revenue to qualify. As is the case with most banks, you will need strong credit no matter which line of credit you choose. Wells Fargo requires a personal credit score of at least 680.

Choose Capital One for SBA Express Loans

Capital One is one of the few lenders to offer SBA Express loans and lines of credit. Express loans can fund up to $500,000 and offer long repayment terms of up to 10 years for loans and seven years for lines of credit. A major benefit of these loans is that they don’t need direct SBA approval. Due to this, the funding timeline can speed up considerably compared to the usual SBA approval process, possibly taking just a few weeks to get approved.

You can use these loans for similar purposes as the SBA 7(a) loans, for working capital, buying equipment or expanding your business. You can also use the loan to refinance past debts, a smart move if you’re taking advantage of lower business loan interest rates. In contrast, Wells Fargo doesn’t provide SBA Express loans.

Choose Wells Fargo for SBA 7(a) loans

Wells Fargo may be your go-to choice if you need an SBA 7(a) loan specifically. Wells Fargo is a consistent leader for 7(a) loans, ranking as the fifth largest SBA lender by number of loans approved in 2023. It approved over 2,100 SBA 7(a) loans in fiscal year 2023, according to the SBA 7(a) and 504 Lender Report.

Wells Fargo is also a SBA Preferred Lender, giving it the authority to process loans efficiently without direct SBA approval in some cases. Its status could lead to faster SBA loan approvals than the norm. SBA loans tend to take anywhere from 30 to 90 days to finalize and receive funds.

Capital One is also an SBA Preferred Lender that offers more SBA loan types. But in practice, Capital One doesn’t service as many SBA loans as Wells Fargo. In 2023, Capital One approved about 75 SBA 7(a) loans based on data from the SBA’s weekly lending report.

Alternatives

If you’re looking for a bank lender with more conventional business loan options, you could go with Bank of America. It provides conventional term loans, equipment financing, commercial real estate and three business lines of credit. Like Wells Fargo, its line of credit options can serve businesses in varying stages from startups to established businesses needing high credit limits.

Yet, these traditional bank lenders aren’t known for quick business financing. Instead, you could opt for an online loan marketplace like Lendio, which offers a variety of business loans through its massive 75 lending partners. Its lending partners can approve loans in as little as 24 hours. You can even apply for bad credit business loans, like a merchant cash advance with no credit score requirement.

Business credit cards

Another alternative is to go with a business credit card, giving you the flexibility to reuse the credit as needed, similar to a business line of credit. While you typically need strong credit to apply, business credit card issuers don’t set revenue standards or require you to form a legal business entity. And they give you the added benefit of earning rewards for purchases, often redeemable for cash back or travel.

Bankrate insight

Capital One business credit cards can cover a lot of travel and short-term needs. Specifically, the lender offers the Capital One Venture X Business Rewards card designed for travelers looking for high rewards, statement credits and lounge access.

SBA loans

SBA loans are ideal business loan options for businesses that may not qualify for traditional business loans but need long repayment terms and favorable interest rates. Both Capital One and Wells Fargo are SBA lenders, but they don’t offer all SBA loan programs. You might consider other lenders for one of these loans:

• SBA CAPLines: The SBA’s version of lines of credit geared for specific work contracts, projects or seasonal expenses
• SBA microloans: Small loans offered through nonprofit lenders up to $50,000, typically geared for underserved communities, such as minority business owners

Bottom line

Capital One and Wells Fargo are both traditional lenders offering several loan options and in-person lending support. Choosing between these lenders comes down to the exact business loan you’re looking for. Capital One provides high loan limits and four SBA loan options, including Express loans and lines of credit that are rare to find elsewhere.

But Wells Fargo works best if you need a business line of credit with accessible loan criteria or an SBA 7(a) loan from a highly experienced SBA lender. It’s also wise to compare other small business loans to see how these lenders measure up to competitors.

Frequently asked questions

• Which bank is better: Wells Fargo or Capital One?

  Both Wells Fargo and Capital One are good banks for different reasons. For business loans, Wells Fargo provides flexible options for business lines of credit and is a top originator of SBA 7(a) loans. Wells Fargo also provides more branches than Capital One to get in-person support. But if you need an SBA Express loan or line of credit or an SBA loan with relaxed time in business requirements, Capital One is the better option.

• What credit score do you need for a business loan from Wells Fargo?

  Wells Fargo generally requires a strong personal credit score of 680 or higher to be considered for a loan.

• Is Wells Fargo good for small businesses?

  Wells Fargo is a good lending option for small businesses because it offers business lines of credit that cater to businesses at all stages of growth. But if you’re looking for a variety of business loan options or a no-fee business checking account, you’ll want to look at other banks.