Business term loans to grow your business.

The classic way to boost your small business with monthly payments and access to funds in as little as 24 hours.


LOAN AMOUNT

$5,000-2,000,000

TIME TO FUND

As soon as 24 hours

LOAN TERMS

6 months – 10 years

INTEREST RATE

As low as 8.49%

Is a term loan right for you?

Pros of a business term loan

Term loans can help grow your business by providing a predictable payment schedule, lower interest rates, and longer term lengths. With term loans, you can plan your finances more effectively, make accurate projections, and budget accordingly.

Check eligibility

Cons of a business term loan 

While term loans can be a great boost for your business, the eligibility requirements can be more strict than other types of business financing. Lenders typically expect a solid credit score and a proven business track record.

Check eligibility

How can I use my loan?

Small businesses can use term loans to cover working capital costs and invest in business expansion.

You can use your loan to: 

Fund a business acquisition

Purchase or upgrade equipment and software.

Hire new employees.

Cover payroll gaps.

Remodel your property.

Refinance debt.

Check eligibility

Business term loan comparison.

We carefully select the lenders we work with and then work with you to find the best loan for your situation. 

Lender/funder*Loan/financing amountMin. time in businessLoan/financing termMin. credit scoreTime to funds
(After approval)
Funding Circle$25,000-$750,0002 years6 months-7 years660As fast as 3 days
Bankers Healthcare Group (BHG)$25,000-$500,0002 years12 years700As fast as 3 days
Avana Capital (Lend Thrive)$25,000-$150,0002 years5 years675As fast as 24 hours
Camino Financial$5,000-$150,00018 months2 to 5 years620As fast as 2 days
Dreamspring$35,000-$250,000Any2-6 years600As fast as 1 day
Fundation$15,000-$250,0001-3 years1-4 years6801-3 days
Lighter CapitalUp to $4 million12 monthsUp to 3 yearsNoneAs fast as a few days
Salaryo$5,000-$500,0002 years6 months – 3 years680Same-day funding

Minimum requirements for a business term loan.

If your business doesn’t match some of the qualifiers below, qualifying for a term loan may be more challenging.

CREDIT SCORE

600 or higher

MONTHLY REVENUE

at least $8K

TIME IN BUSINESS

1 year or more

1. Tell us about your business.

Answer a few simple questions and complete the application in minutes.

2. Submit your application.

We’ll put your application in front of 75+ lenders. Applying is free and won’t impact your credit score.

3. Compare offers.

Find the funding option with the terms that best fit your small business goals.

4. Get funded.

Once you accept, funding can hit your bank account in as little as 24 hours.

12+ years of serving
small business.


$15+ billion in SMB funding


75+ lenders in our network


400,000+ total loans funded


“The Lendio process was amazing.”

Sterling Hannemann
Co-Owner of Seven Brothers

“Lendio literally saved my business.”

Chloria Chandler
Owner of Bobbee O’s BBQ

Business term loan FAQs.

A term loan provides a borrower with a lump sum of money upfront that is then repaid at regular intervals over a set amount of time, also referred to as the loan term. Interest rates on term loans can be fixed or variable.

  

One of the best things about a term loan is that it can be used for a variety of funding needs. Here are some examples of how you can use your term loan:

Payroll gaps

You can use a small business term loan to cover a payroll gap you’ve got to cover. You might have one because your business is seasonal. Or you might have one because you had a rush of business and had to bring on new employees to help cover it all. Either way, you can use a term loan to pay.

Adding another business location

If you’ve got one brick-and-mortar business location that’s thriving, the opportunity to open another might be too good to pass up. You could use a term loan to help you cover the startup costs of your new location. Renovations, rent, and materials for running your business all cost money a term loan could help provide. 

Marketing

Word-of-mouth advertising is great, but it only gets your business so far. You likely need to market your business at times and term loan funding can help you do that.

Acquiring another business

Another way term loans could help your business is if you’ve got the chance to acquire another business. If there’s one that comes on the market and would be the perfect addition to your existing business, don’t miss out. You can use a term loan to help acquire it.

 

The interest rates for term loans tend to be lower than other kinds of quick financing. The exact rate will vary by lender and the loan terms. Don’t forget to add any origination fees or application fees to the total cost of the loan.

Term loans are best used for one-off expenses like investing in equipment, real estate, or working capital. Because term loans can be approved relatively quickly, they are a great way for businesses to fund essential projects or expansions to grow their business long-term. If you need money for a big project with solid ROI potential, a term loan can be a good option.

Well-established businesses with a solid history of strong financials and healthy revenue are a good match for term loans. Lenders are looking for borrowers who can demonstrate reliable income and repayment through strong credit and financial history. 

Newer businesses or startups with less than two years in business are unlikely to be a good match for term loans—they simply don’t have the financial history yet to prove they are a safe bet for lenders.

Term loans have advantages and drawbacks—which loan is right for you will depend on your own business goals and how well you meet eligibility criteria. Weigh the pros and cons carefully to understand if a term loan is right for you.

Pros of term loans.

Predictable payment schedule

Term loans are lump sum funds with a set repayment schedule, which means you’ll always know when payments are due and how much is owed. This predictability makes it easier to plan your finances, make more accurate projections, and budget accordingly. 

Lower interest rates

Long-term loans typically have lower interest rates compared to other financing options, making them a more affordable option for businesses. Additionally, because the loan is spread across a longer period, the monthly payments will generally be lower, resulting in less impact on cash flow from month to month. Plus, interest on term loans is tax deductible, putting more savings into your pocket. 

Versatile short- or long-term financing options

Term loans offer flexible financing options for businesses, from short-term funding up to 18 months to longer terms anywhere from a few years to a decade or more. 

Cons of term loans.

Inflexible payment schedule 

The predictability of term loan payments can also be a disadvantage. Term loans have fixed repayment schedules and often have strict policies on early repayment. This means you must pay on time every month with little to no exceptions. And short term loans may have more frequent repayment deadlines with weekly or even daily payments. This can put a strain on a business if its cash flow is unpredictable. 

Strict eligibility requirements

Because term loans typically deal with significant sums of money, lenders have stringent eligibility criteria. Borrowers should have an established business with strong finances and a good credit score. 

Be prepared to share:
 

  • Credit history
  • Personal and business cash flow
  • Annual business revenue
  • Business plans

New businesses don’t have a long-established financial history to demonstrate secure cash flow and practices, so they are less likely to get approved. 

Term loans are generally classified into short-term loans and long-term loans. 

Short-term loan

These short-term loans have a fairly self-explanatory name. They’re short-term, generally meaning they are repaid over 18 months or fewer. 

Medium-term loan

These are like short-term loans but with a longer repayment period, usually between one to five years. They’re great if you need a bit more cash and more time to pay it back.

Long-term loan

These are the big ones! They’re for larger amounts and have terms that can last anywhere from five to twenty-five years. They’re perfect for big investments like buying a new building or launching a new product line.

Business term loans are similar to personal loans. Let’s say you’re approved for a loan – you’d get a lump sum of cash upfront. Then, you’d pay it back over a set period, or “term,” with interest.

The great part? You can use this loan for any business expense. Need to buy equipment? Absolutely. Looking to expand your operations? Go for it. It’s all about helping you grow your business.

  1. Know your needs: First things first, you’ve got to understand what you need the loan for. It could be anything from expansion plans to inventory purchases. The key is to have a clear idea of why you need the loan and how much you need.
  2. Check your credit score: Lenders will look at your personal and business credit scores to assess your risk level. If it’s low, don’t worry. There are still options out there for you.
  3. Gather your documents: You’ll likely need to provide financial statements, tax returns, and a business plan. Make sure you’ve got all your paperwork in order.
  4. Compare lenders: Don’t just jump at the first offer you get. It’s important to shop around and compare terms from different lenders.
  5. Apply: Once you’ve chosen a lender, go ahead and submit your application. They’ll review it and make a decision.
  6. Close the deal: If approved, you’ll receive an offer. Review it carefully, ask any questions you might have, and if it all looks good – sign on the dotted line!

Remember, we’re here to help you through every step of the process. You’re not alone in this journey, and together, we’ll find the best solution for your business.

*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (November 28, 2022). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.

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