Traditional-Term Business Loan
Everything you need to know about traditional term loans for your small business.
What a Traditional Term Loan Can Do For Your Business
Term loans are most appropriate for established businesses that can leverage their financial statements and provide a firm down payment to help minimize monthly payments and total loan costs.
Typically, these types of business loans have set repayment terms, fixed interest rates, and a principle value. The best uses for terms loans are: construction, capital improvements, equipment purchases, working capital, or business acquisitions.
Term Loan Rates
Loan Amount: $25,000 – $500,000
Loan Term: 1 – 5 years
Interest Rate: 7% – 30%
Payment Frequency: Monthly
Time to Funds: 1 – 4 weeks
Next Loan Product: Short-Term Business Loan
New borrowers will have to supply an application where underwriting will verify experience. You will also need to have the ability to pay back the loan and provide P&L statements from the past year.
What is a Traditional Term Loan?
A term loan is a like a “normal” business loan. Generally, term loans provide a fixed payment over 1 to 5 years and are normally backed by collateral such as a car or another tangible asset. They can also be used for a wide range of business purposes.
What Types of Businesses is it Good For?
Term loans are forms of debt financing. Business owners can use them to acquire or fund expansions, cover working capital expenses, gain financial assistance or improvement, and a wide range of other business activities. These types of loans are provided by both traditional banks and non-traditional lenders. Any business that has been in operation for more than two years with good credit can utilize a term loan.
What are the Minimum Requirements?
Generally, most lenders will consider your credit score, time in business, and collateral to determine whether or not the business owner will be able to get the loan. It is in the best interest of the business owner to have excellent credit, bulletproof P&L statements, and a record of its bank statements.
How Much Will a Traditional Business Loan Cost?
Term loan rates range from seven to thirty percent. Typically, these loans have fixed interest rates and fixed monthly payments. This structure provides the same payments over the life of the loan and you will know exactly when the loan will be paid off.
- You will have stable monthly payments.
- Flexible options for a variety of business purposes.
- Improve your credit with fixed rates.
- Some loans may require collateral.
- You may need to provide personal and business tax returns.
Why Use Lendio?
Lendio’s mission is to empower your business by making small business loans simple through options, speed, and trust. Whether you are looking for an acquisition loan or startup loan, Lendio offers hundreds of different loan products from a variety of lenders. Finding out which business loan is best for you is why we’re here.
Lendio makes the whole process incredibly simple. Our technology instantly sifts through all loan types and lenders, then we match you with the right small business loans, and other business financing options.
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