Business Term Loans

Most businesses can qualify, but it depends on your credit score, financials and how long you’ve been in business what your term length, loan size, and interest rate will be.

Term loans, traditionally, come from a bank. The application process from a bank will be longer and several physical documents. For an online lender, like Kabbage or Funding Circle, the application process is much easier and convenient. They all require the same information, but online lenders off a more streamlined input process.

Some lenders may charge prepayment penalties or other fees.

Apply using FaaSfunds online application and we’ll connect you to the top business term loan lenders, and get you approved in as little as a day.

Business Term Loans are the most common form of loan out there, and they’re pretty straight-forward.

• You get a set loan amount, usually for larger purchases.
• You have a set interest rate, which varies depending on your lender and your business.
• You have a set repayment term, which also varies.
• They might require collateral depending on your business financials, and you could lose that collateral if you can’t repay it.

There are some other details you should know before applying, however.

Your only options for business terms loans come from either banks or online lenders. These are the two “types” and their tradeoffs.

• Banks – offer the lowest rates, but you need to have good credit and strong financial history. These traditional loans also take longer to apply for and receive.
  • If you have no collateral, getting these traditional business term loans are also hard if you have no collateral to secure them with.
• Online lenders – offer quicker access to funds. They’re easy to apply for and have looser credit and business financial history requirements, but typically have higher rates.

What are the Costs of a Business Term Loan?

Business term loans are one of the simpler funding methods to figure out, but they can still have very complex terms. Here’s a run-down of how the repayment works.

Business Term Loan Uses 

Business term loans are usually used for large business investments, such as:

• Equipment
• Real estate
• Production
• Marketing campaigns

The goal of getting a business term loan is to come out of it with more money than you spent on it, so it takes a lot of planning and calculation to make sure you’re going in the right direction for your business.

If you’re trying to purchase new furniture for your restaurant, you need a loan to make that large, one-time purchase. After you’re approved for and receive a $30,000 business term loan and you purchase the furniture, you’ll most likely have to start paying monthly payments. Those monthly payments will include 13% interest over a seven-year period. If the interest is on the principal amount borrowed, your monthly payments will be about $403 per month. This all depends on the loan stipulations and how the interest is compounded, but it can give you a basis of how business term loans work.