A business term loan is the most straightforward business financing product: you borrow a fixed amount and repay it in equal installments (monthly or bi-weekly) over a defined term. Predictable payments make cash flow management simpler. For planned capital investments — expansion, equipment, hiring, marketing — a term loan is often the right fit.
How Small Business Term Loans Work
Term loans come in two flavors: short-term (6–24 months, typically from online lenders) and long-term (2–10 years, from banks and SBA lenders). Short-term products fund faster, require less documentation, and are accessible at lower credit thresholds — but carry higher rates. Long-term products have significantly lower rates and longer repayment horizons, but require stronger credit, longer operating history, and more paperwork.
Online lenders have transformed small business term lending. Products like those from established online lenders offer 12–60 month terms, fixed rates, and funding in 1–3 business days — compared to weeks or months at a traditional bank. The trade-off is cost: online lender term loans typically run 15–45% APR vs. 7–15% at banks.
Rates, Amounts & Terms
| Product Feature | Details |
|---|---|
| Amount | $10,000 – $1,000,000 |
| Term | 1 – 10 years (online: 1–3; banks: 3–10) |
| Rate Range | 7% – 45% APR (banks: 7–15%; online: 15–45%) |
| Repayment | Fixed monthly or bi-weekly payments |
| Collateral | Banks: often required above $50K. Online: typically unsecured |
| Speed | 1–5 days (online); 2–6 weeks (banks) |
Rates shown are typical market ranges. Actual rates vary by lender, creditworthiness, and business profile. Verify with lenders before applying.
Typical Qualification Requirements
| Requirement | Typical Minimum |
|---|---|
| Time in Business | 12 months (banks: 24+) |
| Monthly Revenue | $15,000+ |
| Credit Score | 600+ (online); 680+ (banks) |
| Annual Revenue | $180,000+ |
Best For
- Business expansion
- Equipment purchase
- Hiring and payroll ramp
- Marketing campaigns
- Debt consolidation at a lower rate
Not the Right Fit When
- Ongoing revolving needs (line of credit is more efficient)
- Emergency funding in under 24 hours
How to Apply
- Review the qualification requirements above. Confirm your time in business, monthly revenue, and credit score meet the minimums before applying.
- Prepare documents. Typically: 3–6 months bank statements, most recent tax returns (business and personal), and your business license. Some lenders require additional documents; the list is shorter for fast-funding products.
- Apply through our partner. Submit your information once, receive competing offers, and compare total repayment amount, APR, and payment structure before accepting.
Frequently Asked Questions
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Related: Sba Loans • Working Capital Loans • Business Line Of Credit • Equipment Financing
Written by the SBLT Editorial Team. This content is informational only and does not constitute financial or legal advice.
Advertising Disclosure: Small Business Loans Today receives compensation when you click links to our partner financing site. Rates and terms shown are typical market ranges — verify with lenders before making financial decisions. Not financial advice.
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