Business Term Loans: Reliable Funding with Fixed Terms
Access capital with predictable monthly payments and fixed interest rates. Our AI matches you with the right term loan provider for your business needs.
Predictable Repayment Schedule
Fixed monthly payments make budgeting easier and help you plan for the future with confidence.
Lower Interest Rates
Competitive rates for established businesses
Longer Terms
Extended repayment periods up to 10 years
Build Business Credit
Strengthen your business credit profile
What is a Business Term Loan?
A business term loan is a traditional funding option that provides a lump sum of capital upfront, which is then repaid with interest over a fixed period of time. Unlike revolving credit options, term loans have a set maturity date and a regular payment schedule, typically with monthly installments.
Term loans are ideal for established businesses looking to make significant investments in growth, expansion, or major purchases. They offer the stability of fixed payments and interest rates, making them easier to incorporate into your long-term business planning.
Key Characteristics of Business Term Loans
- Fixed repayment schedule
Regular monthly payments over a predetermined period (1-10 years)
- Fixed or variable interest rates
Most term loans offer fixed rates, though some may have variable rates tied to an index
- Secured or unsecured options
Can be backed by collateral (secured) or based solely on creditworthiness (unsecured)
- Higher qualification requirements
Typically require stronger credit and longer business history than alternative funding
Term Loan Market Insights
Business term loans remain one of the most popular funding options for established businesses, with banks and online lenders originating over $600 billion in small business term loans annually in the United States.
7.5%
average interest rate
$350K
average loan amount
5 yrs
average term length
How Our AI Finds Your Perfect Term Loan
Lendec's proprietary AI technology analyzes your business profile and matches you with the right term loan provider.
Business Profile Analysis
Our AI analyzes your business financials, credit history, time in business, and industry to create a comprehensive profile.
Term Structure Optimization
Based on your funding needs and cash flow patterns, we determine the optimal loan amount, term length, and payment structure.
Lender Matching
We match your profile with lenders who specialize in your industry and have historically approved similar businesses.
Rate Comparison
Our system compares interest rates, fees, and terms across multiple lenders to find the most competitive offers for your business.
Types of Business Term Loans
Different term loan structures to meet your specific business needs and financial situation.
| Type | Term Length | Interest Rates | Typical Amounts | Best For | Time to Fund |
|---|---|---|---|---|---|
| Traditional Bank Term Loan | 3-10 years | 5-10% APR | $25K-$5M | Established businesses with strong credit | 2-4 weeks |
| SBA Term Loan | 5-25 years | 7-9.5% APR | $50K-$5M | Small businesses needing longer terms | 30-90 days |
| Online Term Loan | 1-5 years | 7-30% APR | $5K-$500K | Businesses needing faster funding | 1-7 days |
| Equipment Term Loan | 2-7 years | 6-15% APR | $5K-$1M | Businesses purchasing equipment | 1-2 weeks |
Which Term Loan Type Is Right For You?
Choosing the right term loan structure depends on your business's financial situation, funding needs, and timeline. Our AI technology analyzes these factors to recommend the best option:
- Choose a traditional bank term loan
If your business has been operating for 2+ years with strong credit and financials
- Choose an SBA term loan
If you need longer repayment terms and qualify as a small business under SBA guidelines
- Choose an online term loan
If you need faster funding or have less-than-perfect credit
- Choose an equipment term loan
If you're specifically financing equipment purchases that can serve as collateral
How Different Industries Use Term Loans
Discover how businesses in your industry leverage term loans to fund growth and expansion.
Manufacturing
- Equipment purchases and upgrades
- Facility expansion
- Technology implementation
- Inventory management systems
Professional Services
- Office expansion or relocation
- Technology infrastructure
- Hiring specialized talent
- Acquisition of competing firms
Retail
- Store renovations
- Opening new locations
- Inventory expansion
- E-commerce platform development
Restaurants
- Kitchen equipment purchases
- Dining area renovations
- Location expansion
- Franchise acquisition
Healthcare
- Medical equipment purchases
- Practice expansion
- Electronic health record systems
- Facility renovations
Success Story
"We secured a $250,000 term loan through Lendec's platform to expand our manufacturing facility. The 5-year term with fixed monthly payments allowed us to budget effectively and expand our production capacity by 40%. The AI matching found us a lender that specialized in manufacturing businesses, resulting in a rate that was 1.5% lower than other quotes we received."
— Michael R., Manufacturing Company Owner
Term Loan Eligibility Requirements
Understanding what lenders look for can help improve your chances of approval.
Basic Requirements
- Time in business: 1-2+ years (varies by lender)
- Personal credit score: 600+ (traditional banks often require 680+)
- Annual revenue: $100,000+ typically required
- Debt service coverage ratio: 1.25+ (ability to repay)
- Profitability: Most lenders require positive cash flow
- Collateral: May be required for secured loans
Documentation Needed
- Business financial statements
Balance sheet, income statement, cash flow statement (2-3 years)
- Tax returns
Business and personal tax returns (2-3 years)
- Bank statements
Last 3-12 months of business bank statements
- Business plan
Detailed plan for how the loan will be used and repaid
- Legal documents
Business licenses, articles of incorporation, commercial leases
Understanding Term Loan Costs
Interest rates, fees, and other factors that determine the total cost of your term loan.
Interest Rates
Interest rates for term loans vary based on several factors:
• Traditional bank loans: 5-10% APR
• SBA loans: 7-9.5% APR
• Online lenders: 7-30% APR
Rates are influenced by your credit score, time in business, annual revenue, industry risk, and loan term.
Fees
Common fees associated with term loans:
• Origination fee: 0-7% of loan amount
• Application fee: $0-$500
• Guarantee fee (SBA loans): 0.25-3.75%
• Prepayment penalties: Varies by lender
Always calculate the APR including all fees to understand the true cost of borrowing.
Term Length Impact
How term length affects your loan:
- Shorter terms: Higher monthly payments, lower total interest
- Longer terms: Lower monthly payments, higher total interest
- Match term length to the useful life of what you're financing
Calculating Your Monthly Payment
Understanding your monthly payment is crucial for budgeting and ensuring the loan is affordable for your business.
Example Calculation:
For a $100,000 term loan with a 7% interest rate and 5-year (60-month) term:
- • Monthly payment: $1,980
- • Total payments: $118,800
- • Total interest: $18,800
Lendec's AI Advantage:
Our AI technology calculates the total cost of ownership for each loan offer, including all fees and interest. It also analyzes your cash flow to ensure the monthly payment is sustainable for your business, helping you avoid taking on debt that could strain your finances.
Term Loan Application Process
Our AI-powered platform streamlines the term loan application process for faster funding.
AI-Powered Matching
Our AI analyzes your business profile, financial statements, and credit history to determine which term loan providers are most likely to approve your application with favorable terms.
Document Preparation & Submission
Upload your financial statements, tax returns, bank statements, and business plan through our secure portal. Our system organizes your documents and helps identify any missing information.
Underwriting & Approval
Lenders review your application and conduct their underwriting process. This may include verifying information, checking credit reports, and analyzing your business financials. Our platform tracks the status of your application and provides real-time updates.
Closing & Funding
Once approved, you'll review and sign the loan agreement. Funding typically occurs within 1-7 business days after closing, depending on the lender. The funds are transferred directly to your business bank account, and repayment begins according to the agreed schedule.
Term Loans vs. Other Business Funding Options
When considering funding options for your business, it's important to understand how term loans compare to other financing solutions. Each option has distinct advantages and considerations that may make it more suitable for your specific situation.
| Feature | Term Loan | Line of Credit | Merchant Cash Advance |
|---|---|---|---|
| Funding Type | Lump sum upfront | Revolving credit line | Lump sum upfront |
| Repayment | Fixed monthly payments | Flexible, pay what you use | Percentage of daily sales |
| Cost Structure | Interest rate (5-30% APR) | Interest rate (7-25% APR) | Factor rate (1.1-1.5) |
| Term Length | Fixed (1-10 years) | Revolving | Variable (4-18 months) |
| Best For | Specific, one-time investments | Ongoing cash flow needs | Quick funding with fluctuating sales |
When to Choose a Term Loan
Term loans are particularly well-suited for businesses that:
- Need a significant amount of capital for a specific purpose
- Have been in business for at least 1-2 years with established financials
- Have good to excellent credit (personal and business)
- Prefer predictable monthly payments for easier budgeting
- Are making investments that will generate returns over several years
- Want to build business credit with a traditional financing product
The Future of Business Term Loans
The business term loan landscape continues to evolve with technological advancements and changing business needs. Key trends to watch include:
- Digital-first lending platforms reducing approval and funding times
- Alternative data sources for more accurate risk assessment beyond traditional credit scores
- Customized repayment structures that better align with business cash flow patterns
- Greater transparency in pricing and terms
At Lendec, we're at the forefront of these innovations, using advanced AI technology to match businesses with the most competitive term loan providers and terms available in the market. Our platform continuously learns and improves to ensure you get the best possible funding options for your specific business needs.
Ready to Apply for a Business Term Loan?
Let our AI match you with the right term loan provider for your business needs.
Get Matched NowFrequently Asked Questions About Business Term Loans
Get answers to common questions about term loans and how our AI-powered platform can help.
Related Resources
Term Loan Calculator
Estimate your monthly payments, total interest, and repayment schedule with our interactive term loan calculator.
Try CalculatorSBA Loans vs. Conventional Term Loans
Compare SBA-backed loans with conventional term loans to understand which option is best for your business.
Read ComparisonTerm Loan Success Stories
Read how other businesses successfully used term loans to fund growth, expansion, and major investments.
View Success Stories