Business term loans deliver a lump sum of capital repaid over a fixed schedule — ideal for planned investments in growth, equipment, real estate, or debt consolidation.
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Short-Term vs. Long-Term Business Loans
Short-term business loans (3–24 months) from online lenders fund quickly (24–72 hours), accept lower credit scores, and carry higher rates (18–80% APR). Long-term loans (2–10 years) from banks and SBA lenders offer lower rates (7–15% APR) but require stronger financials and take weeks to close. The right choice depends on the purpose: short-term for urgent working capital or bridge financing; long-term for major investments where interest savings justify the application effort.
Term Loan Qualification
Online lenders typically require: 620+ credit, 1+ year in business, USD 100,000+ annual revenue. Bank term loans require: 680+ credit, 2+ years in business, USD 250,000+ annual revenue, and audited or reviewed financials. For amounts over USD 500,000, lenders often require collateral. We match you with lenders across all tiers so you can see actual offers for your financial profile without affecting your credit score.
Frequently Asked Questions About Business Term Loans
What documents do I need for a business term loan?
Typically: 3–6 months of bank statements, 2 years of business tax returns, a completed application with business and personal information, and sometimes a business plan or financial projections.
Can I pay off a business term loan early?
Many lenders allow early repayment, but some charge prepayment penalties (typically 1–5% of remaining balance). Always check the prepayment terms before signing.
What is a typical business term loan interest rate?
Online lender rates range from 18–80% APR. Bank term loans range from 7–15% APR. SBA 7(a) loans range from 10.5–15.5% variable.
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