Business term loan

A business term loan is an all-encompassing phrase that covers any type of business loan that gets paid back in increments and with interest to the lender. Funding amounts typically range from $5,000 all the way up to $1 million. The payment terms are either short-term, normally 3 to 5 years,² or long-term, which can be 5 years² and up. And the payment frequency is generally daily, weekly, or monthly.

This is different from other forms of business financing, like a business line of credit, which is revolving debt. With revolving debt, the amount available for you to borrow is replenished as you pay it back. While you don’t need to re-apply to get funds from the same line of credit, with a business term loan, you’ll need to apply from scratch for additional financing once you pay the principal and interest back on the original.

If you’re comparing your options of getting a term loan vs. offering equity in your business, one advantage of term loans is that you’ll get to keep control of your company and all decision-making. This is one of the reasons business term loans are popular choices for financing when it comes to large initiatives.

Business term loans help companies by providing benefits like:

• Flexible financing that can be used for almost any business purpose
• A lump sum of cash up front
• Larger amounts of cash flow compared to most business credit cards and lines of credit
• Reasonable interest rates
• A predetermined payback period with no surprises

If you need to cover payroll or repair equipment, there are business term loans for that. If a competitor is selling and you want to buy them out, you can take a business term loan and get a bid in quickly. This type of financing can also be used to secure a lease or bridge a large gap in cash flow to make a real estate deal. This flexibility is what makes them so appealing.

If you’re ready to apply for a business term loan, we’re ready to help. Click here and enter information about your business needs and you’ll see your best financing options in seconds.

The business term loan that you can get with our financing partners can be used to cover any short- or long-term expenses, depending on the loan agreement you sign.

For example, if a machine breaks down, you could get a working capital business loan to cover the costs of repairing equipment and renting a temporary replacement so that your business can continue to operate. Meanwhile, a long-term business term loan would be the right choice for investments that don’t bring revenue back as quickly. For example, if you’re doing new construction on an office building where you’ll need tenants and time to recover the costs, this long-term financing is better built for your success.

Other uses for a business term loan include:

• Buying and leasing equipment or vehicles
• Acquiring a company or expanding to new locations
• Covering operating expenses (from integrating point of sale terminals and their software systems to managing payroll and buying regular supplies)
• Buying inventory or raw materials for manufacturing
• Purchasing a building or real estate

In any case, there are times when a business term loan may not work as well for your situation. When you can make payments back before interest is due, or when the cost would be less than the total payments over the loan term, options like business credit cards, business lines of credit, and merchant cash advances may be better.

If you want a customized solution for your immediate or long-term needs, click here and we’ll match you with a financial partner that specializes in funding for your industry.