What is a Business Term Loan?
In Business Term Loans, the business owner borrows a lump sum amount from a lender, commits to make recurring payments, and agrees to repay the principal amount along with interest over a set period of time, or ‘term’.
They are generally used to finance the purchase of assets needed by the business, like land, equipment, and vehicle. They are also used for covering working capital needs, hiring additional employees, opening new business locations, and for other similar purposes.
The precise repayment term is ascertained by the useful life of the underlying asset for which the loan is used. You also need to secure these loans with collateral.
Confused about which Business Term loan to apply for?
Advantages of Business Term Loans
Why should you apply for a Term Loan for your Business?
- Low Interest Rates: Business term loans are typically available at lower interest rates than other borrowing options due to their longer repayment terms.
- Flexibility: Lenders may offer a range of loan repayment terms to choose from. You can then select the term that best fits your timeline and budget for repayment.
- Longer Terms: Business term loans can run anywhere from 2 to 30 years, depending on their purpose, giving enough time to the borrower to repay the loan.
- Predictable Payments: With a Business term loan, your repayment schedule is clear once you sign your offer. So, you don’t have to worry about unexpected payments.
Who qualifies for a Business Term Loan?
Personal Credit Score
Time in Business
Over 2 years
Registered in the US
Documents Required to apply for a Business Term Loan
- Your personal identification
- Certificate or license for the business
- Proof of business ownership
- Business financials, including bank statements
- Voided Business Check
- 2 years of Personal Tax Returns
- 2 years of Business Tax Returns
- YTD Balance Sheet
- YTD Profit & Loss Statement
- Debt Schedule
Business Term Loan Calculator
You can use the calculator below to see how much your business term loan will cost you!
Types of Business Term Loans
The term ‘Business Term Loan’ actually includes a lot of different varieties of loans that follow the term structure. Let’s know about the types of Business Term Loans based on the length of their repayment period.
- Short-term Loans: Short-term loans mostly have repayment periods of one year or less. These loans are usually issued by online lenders, have the most flexible qualifications, and are the fastest to fund. They are also typically the most expensive.
- Medium-term Loans: Medium-term loans have repayment periods of 1 to 5 years. These loans are available from online lenders, banks, and credit unions. They’re much more affordable but can have higher requirements and be slower to fund.
- Long-term Loans: Long-term loans are those with terms longer than five years. These loans require top borrower qualifications and are slow to fund, but also offer the lowest interest rates. These are mostly issued by traditional lenders.
Business Term Loan Application Process
With Global Connect Pro Financial
Firstly, you need to fill out our online application form giving us basic details of your loan requirements.
Our Financial Adviser will call you to discuss your qualifications, loan options, and help you prepare for your loan application.
Once all the documents are ready and qualifications are met, we’ll move on to the actual loan application with the lender.
Our Financial Advisers and Agents will keep in touch with the lender to ensure that your loan is approved at the earliest.