Fund Costly Expenses or Investments
When you’re ready to make a significant investment in the future of your business, you need a way to fuel it financially. A business term loan is a predictable financing solution that won’t strap your business for cash.
At Fast Capital 360, you can compare term loan offers from multiple lenders and choose the best option for your business.
What Is a Term Loan for Business?
Business term loans provide borrowers with a one-time infusion of capital they pay back over a set repayment term.
Fast Capital 360’s lending partners offer unsecured term loans, meaning you’re not required to pledge specific collateral to get the loan, though you might have to provide a personal guarantee.
Business term loans can be used for long-term investments, equipment, debt refinancing and commercial real estate. You might also fund office renovation projects, purchase inventory, hire employees and more. The choice is yours.
How Does a Term Loan Work?
Business term loans work in the following way: Longer term loan payments may be set up monthly or even weekly, while shorter term loans may require a daily or weekly payback structure. Variables such as the loan amount, term length, risk factors and business preference help determine this structure.
Typically, business term loans offer higher funding amounts, more extended repayment periods and lower interest rates than many financing alternatives.
How Long Are Business Loan Terms?
At Fast Capital 360, our business term loans have repayment periods ranging from 1-5 years. Compare this to short-term loans with terms that culminate in a maximum of 18 months.
Needless to say, longer term business loans give you more time to pay off your debt. With more time to repay, you can expect lower payments than you’d find with a shorter term loan.
When Does a Business Term Loan Make Sense?
With so many business financing options, it can be difficult to know which one to pursue. Here are a few reasons you might choose a business term loan over another type of financing.
Seeking Competitive Interest Rates
Business term loans often have lower interest rates compared to other financing options. Businesses that qualify for term loans usually have strong credit histories and have been in operation for at least a year. These factors increase your likelihood of obtaining lower loan rates.
Prefer Extended Repayment Terms
With longer term loans, you’ll repay the borrowed funds and interest in monthly or weekly installments in 1-5 years. In contrast, shorter-term financing requires weekly or sometimes daily payments over a shorter period of time.
Want Flexibility in Use of Funds
Some financing options limit how you can use the funding (e.g., equipment financing, certain SBA loans). At Fast Capital 360, our business term loans can be used for any business endeavor. These might include hiring or acquiring another business or purchasing property or equipment.
What Does a Term Loan Cost?
Due to their favorable interest rates, business term loan costs are lower than many other lending products. At Fast Capital 360, business term loan rates start at 7%. In addition to the interest rate, some lenders may charge one-time upfront fees, which could be based on the loan amount, rate or term.
Business Installment Loan Example
Let’s say you were approved for a $50,000 term loan. Your interest rate is 8% and your loan term is 3 years, or 36 months. Using our business term loan calculator, this would equate to a monthly payment of $1,567 or a weekly payment of $392.
If you were to multiply $1,567 X 36 months, this would give you a total of $56,412. You’d pay $6,412 in interest costs over the loan term.
How to Qualify for a Business Term Loan
What Our Lenders Evaluate
Our lenders evaluate your credit score, revenue, cash flow and time in business.
Your personal credit score is an essential variable in qualifying for a business loan. The higher it is, the easier it will be to qualify for the best business term loan rates and the amount you want.
Lenders also want to make sure you can afford your loan payments, so they’ll consider how long you’ve been in operation and if you’re cash-flow positive. They’ll evaluate your income and expenses by reviewing recent bank statements.
Fast Capital 360 Minimum Qualifications
Business term loans offered by Fast Capital 360’s lending partners have the following requirements:
- 1+ year in business
- $200,000+ in annual revenue
- 600+ credit score
Term Loans Through Fast Capital 360
What Sets Us Apart
Over the years, thousands of small businesses have trusted us with their financing needs and it shows in our ratings:
We know your time is valuable, so we’re committed to finding you the right offer for your business fast.
How to Apply for a Term Loan
Fast Capital 360 brings together some of the best lenders through one straightforward application.
Applying for a term business loan online is fast, easy — and most importantly — you can get preapproved without impacting your credit.
All it takes is 3 steps:
- Tell us about yourself and your business
- Attach recent bank statements
- Get multiple loan offers
Once you pick the offer that works for you, your term loan could be funded within a day of approval.
Term Loans: Frequently Asked Questions
At Fast Capital 360, when we refer to term loans, you might think of them as medium-term loans with repayment terms that can extend up to 5 years. Additionally, these loans are typically repaid through monthly or weekly installments.
A short-term loan can be thought of as a type of term loan. However, short-term loans usually reach maturity in a year or less, though some terms can extend up to 18 months. This type of financing is well-suited to business owners with bad credit. Repayment frequency is often accelerated, with borrowers required to remit daily or weekly payments.
In contrast, long-term small business loans can run from 5 years to 25 depending upon the specifics of your loan agreement, your business’s financial health and the intended use of loan proceeds. A company’s assets are often used as collateral to secure this type of term loan.
It’s wise to use a longer term loan to make investments into your business that will stand the test of time. For example, you might use funds from an extended term loan to expand to another location, renovate your place of business or buy costly equipment.
In contrast, short-term loans are best spent borrowing capital to fund temporary needs, such as inventory purchases, cash-flow shortages or emergency expenses.
Unfortunately, because applicants must have at least 1 year in operation, start-ups and newer businesses are ineligible for term loans. (However, alternative financing in the form of a merchant cash advance is eligible to business owners with at least 4 months in operation.)
Additionally, because business term loans provide significant funding amounts, applicants have to meet higher standards to be approved for financing when compared with certain other financing products.