Term Loans
Little-Known Facts About Term Loans for Your Business… Including How to get up to 500K in Financing for Your Business from Online Lenders and up to 1 Million from Banks
(Flexible, Reliable Solution for Business Funding)
Term loans are what we tend to think of when we have bank loans in mind. A term loan provides borrowers with a lump sum of cash upfront in exchange for specific borrowing terms. Term loans are normally meant for established small businesses with sound financial statements. In exchange for a specified amount of cash, the borrower agrees to a certain repayment schedule with a fixed or floating interest rate. Term loans may require substantial down payments to reduce the payment amounts and the total cost of the loan.
Fast Facts on Credit Suite Term Loans
APPROVAL AMOUNT
Varies
Credit Quality
GOOD
Collateral
Expect to provide collateral; the type will vary
Necessary Financials
Will depend on lender but expect to provide some documentation
Why You Need Term Loans
- Simple application process
- Receive an upfront lump sum of cash
- Specified payments (variable or fixed rate)
- Often lower interest rates than many other financing options
How Does It Work?
4-STEP PROCESS
Step 1
Step 2
Step 3
Step 4
If you are NOT approved, you’ll find out why, as well as what you can do to get approved.
How to Qualify for Term Loans
Below are the requirements to qualify for Term Loans:
- Business financials as requested, including financial statements
- Need 1 or more year in business
- Collateral as needed
- Information about your personal investment in your business
- Must have a business bank account
- High FICO
- Provable cash flow showing your business can pay back the loan
This program may require a Personal Guarantee from you or your credit partner if you use one.
Fundability Factors Needed for Qualification
- Application submission
- Foundation
- Personal Credit History
- Business Financials
- Collateral (as needed)
See what you qualify for today
Terms That Can’t Be Beat
This program offers interest rates of 5.5% – 8% for banks and about 9% – 99% for online lenders.
How Much Does It Cost?
If you don’t get approved – you don’t pay
Multiple Finance Options All In One Place
Wondering if Term Loans are right for you? Find out now, and if it isn’t the best fit, we have multiple other options with easier qualifications and better terms. Find out how much you qualify for Term Loans today with our Business Finance Blueprint Qualifier and let our team help you find the best option for your situation.
FAQ
What are Term Loans and Features?
A term loan provides borrowers with a lump sum of cash upfront in exchange for specific borrowing terms. In exchange for a specified amount of cash, the borrower agrees to a certain repayment schedule with a fixed or floating interest rate.
How Do Business Term Loans Work?
Longer-term loan payments may be set up monthly. Shorter-term loans may require a daily or weekly payback structure.
Often, business term loans offer you higher funding amounts, more extended repayment periods and lower interest rates than many financing alternatives.
What are Long Term Loans?
These loans last anywhere between 3 – 25 years. They use company assets as collateral and require monthly or quarterly payments from profits or cash flow. These loans can limit other financial commitments the company may take on, including other debts, dividends, or principals’ salaries. They may require an amount of profit set aside specifically for loan repayment.
What are Short Term Loans?
These types of term loans may be offered to firms that don’t qualify for a line of credit. They generally run less than a year. But they can also refer to a loan of up to 18 months.
What is the Difference Between a Term Loan vs Line of Credit?
A business line of credit is a flexible loan for businesses that works like a credit card. Companies draw money from their credit lines as needed, only paying interest on the portion of money borrowed. As they repay the amount borrowed, this replenishes the funds available. Funds are often accessed using a business checking account, credit card, or mobile app.
A business line of credit is a type of revolving credit; a business can withdraw funds whenever the need arises, as long as the credit limit isn’t exceeded. Interest then accumulates on the funds that are drawn, usually at a variable rate. For these reasons, a business line of credit can be useful for small-business owners looking to cover short-term needs.
What is a Term Loan Repayment Schedule?
A small business loan is a lump sum of money given with a fixed interest rate and paid back through fixed monthly payments. Loan payments start immediately, whether a business uses the money right away or not.
Do Term Loans Have Higher Limits than Lines of Credit?
Yes. Borrowing limits are often lower on a line of credit than on a business loan. However, some lenders offer secured lines of credit, obtained by providing collateral, that offer higher limits.
When Trying to Get Term Loans from Banks, What Do Banks Look For?
In general, banks will want to understand your business’s cash flow, to determine what your capacity is. That is, whether your business has the wherewithal to repay the term loan.
Banks also want to look at personal credit scores to see if you are in the habit of paying your bills. Banks will want collateral, but they may also want a personal guarantee from you.
What are Balloon Payments?
Both short- and intermediate-term loans may also be balloon loans and come with balloon payments. This means the final installment swells or balloons into a much larger amount than any of the previous ones. Balloon payments tend to be at least twice the amount of the loan’s previous payments.
What is a Typical Term Loan Rate of Interest?
Term Loans tend to have either a variable interest rate or a fixed one. A fixed interest rate is often tied to the Prime Rate, with the most creditworthy borrowers getting the best rate. Variable or floating interest rates are tied to a benchmark rate or index that changes. The Secured Overnight Financing Rate is one such benchmark.
