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Funding Amount

Term

Payback

What Is a Term Loan?

Term business loans are a standard debt financing facility with standard payments (usually monthly) with a maturity and amortization schedule, ranging from anywhere in 6 months to 10 years in length (depending on use). Term loan sizes for small and medium-sized businesses can be as small as a few thousand dollars, and can range up to $5,000,000. Term loans are usually collateralized with the borrowing company’s assets such as land, equipment, accounts receivable, & cash flow

BENEFITS

Here are five top benefits of a Term Loan

AFFORDABILITY

Because they have a longer term, they tend to be more affordable than other, shorter-term small business loan options.

RATE

Term loans tend to have lower rates and more generous payback terms, especially when compared to other small business loan options like merchant cash advances or lines of credit.

AMOUNT

FLEXIBILITY

Because they’re more affordable, you can typically qualify for more money than you could with other, less-affordable lending options.

PAYMENT PLANNING

Because payments are predictable, it’s much easier to plan for payments. This is especially true in comparison to variable rate or variable payment products.

Term loans are flexible: the loan’s duration, amount and interest rate are all negotiated before the loan is granted. The better the business’ and business owners’ credit scores, the more flexible and advantageous these terms are likely to be.