Business Term Loans
A business term loan provides a lump sum of capital that you repay with interest over a set schedule, usually with fixed payments.
It typically fits established, profitable businesses funding a defined project such as expansion, hiring, a large purchase, or refinancing higher-cost debt.
Term Loans quick facts
These are the typical terms for term loans. Your actual terms depend on underwriting.
| Typical amount | $25,000 to $2,000,000 |
|---|---|
| Typical term | 1 to 5 years |
| Typical funding speed | Typically 3 to 14 business days |
| Typical minimum requirements | 2+ years in business, $25,000+ monthly revenue, 650+ credit |
| Cost structure | Fixed or variable interest rate, plus possible origination fee |
Term Loans: good fit or not?
This option works well for some situations and is a poor match for others.
Good fit
- Growth projects with a clear cost and return
- Refinancing higher-cost short-term funding
- Businesses with two or more years of solid financials
- Owners who want predictable payments
Not a good fit
- Short-term or recurring cash flow gaps
- Businesses with less than two years of history
- Owners who need funds within a day or two
Documents usually needed
Having these ready typically speeds up review. A funder may request additional items.
- Completed application
- Most recent 6 months of business bank statements
- Two years of business tax returns
- Year-to-date profit and loss statement and balance sheet
- Debt schedule listing current business obligations
- Driver license for each owner
Term Loans: how it works
The process typically follows 4 steps from first conversation to funding.
Share your financials
Send your application, bank statements, and tax returns.
Compare offers
We review amount, rate, term, and fees from available funders.
Underwriting
The selected funder verifies financials and may request more information.
Close and fund
Sign loan documents and receive funds by wire or ACH.
Term Loans vs. SBA Loan
The main difference comes down to structure, cost, and timing. Here is how they typically compare.
| Feature | Term Loans | SBA Loan |
|---|---|---|
| Typical speed | 3 to 14 business days | 30 to 90 days |
| Typical term | 1 to 5 years | Up to 10 years (25 for real estate) |
| Paperwork | Moderate | Extensive |
| Cost | Moderate | Typically among the lowest available |
Typical characteristics. Terms vary by funder and file.
Term Loans FAQs
What can a business term loan be used for?
Common uses include expansion, hiring, marketing, inventory, equipment, and refinancing existing business debt. Funds must be used for business purposes.
Are term loan rates fixed?
Many are fixed, though some funders offer variable rates. Your rate depends on credit, revenue, time in business, and underwriting.
Is collateral required?
Some term loans are unsecured with a personal guarantee and a general UCC lien. Larger loans may require specific collateral.
Is there a prepayment penalty?
It depends on the funder. Some charge a prepayment fee and some allow early payoff without penalty. We point this out when comparing offers.
Can I get a term loan with less than two years in business?
Some funders consider businesses with one year or more of history, usually with lower amounts or shorter terms.