Business
Term
Loan
Flexible Funding Solutions for Your Short-Term Business Needs
Short Term Business Loan Overview
Average Loan Amount
$25K - $500K
Approved within?
&
Less Than
24 hours
What is a Business Term Loan?
A Business Term Loan is a type of financing designed specifically for business needs, where funds are repaid in fixed installments over a predetermined period. These loans can range from one to ten years and may extend up to 30 years in special cases. Typically associated with variable interest rates, Business Term Loans can lead to different total repayment amounts.
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Primarily utilized for small business financing, Business Term Loans are ideal for both newly established businesses and those looking to expand. They provide a reliable source of capital that businesses can use to enhance their operational capacity and profitability over time. Whether it's investing in new equipment, expanding facilities, or increasing inventory, Business Term Loans offer a strategic way to boost business capabilities and growth. This form of credit is crucial for companies aiming to leverage business loans for small business, apply for a business loan, or secure small business capital to scale operations and drive long-term success.
How to Apply for a Business Term Loan
STEP 1
Get Pre-qualified
To get pre-qualified for an Business Term loan, click the "Apply Now" button and enter general information about your business.
STEP 2
Await Approval
Once processed, one of our Business Advisors will contact you to discuss the available options for which you qualify.
STEP 3
Receive Funding
Once approved and the offer is accepted, the funds will be directly deposited into your bank account, allowing you immediate access to capital
Documentation and Qualifications for Business Term Loans
Documentation Needed:
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Application
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Debt schedule
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Business and Personal Tax Returns
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3 Months of Business Bank Statements
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Business Profit & Loss Statements
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Business Balance Sheet
Qualifications:
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$100,000 in annual revenue
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1+ years in business
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Minimum 600 credit score
Securing a Business Term Loan requires specific documentation and qualifications to ensure eligibility and demonstrate financial stability. Applicants must submit a complete loan application, along with a debt schedule that outlines existing financial obligations. Both business and personal tax returns are necessary to assess the financial health and tax compliance of the applicant. Additionally, the last three months of business bank statements are required to verify recent cash flow and business activity.
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For further financial analysis, lenders will also request the business's profit and loss statements, which provide a clear view of operational profitability, and a business balance sheet, which offers a snapshot of the company's financial standing in terms of assets, liabilities, and equity.
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Regarding qualifications, businesses need to have a minimum of $100,000 in annual revenue and at least one year of operational history to apply. A minimum credit score of 600 is also required to qualify, ensuring that the business has a history of managing credit responsibly. These criteria help lenders evaluate the risk and determine the business's capability to repay the loan efficiently.
Short Term Business Loans
Business term loans are traditionally a bank product. If you’re applying to a term loan from a bank, you can expect a longer application process with many documents required; which isn't always appealing.
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Plenty of businesses can qualify for a traditional term loan, as long as you’ve been in business for a minimum required period of time, have a good credit score, and are currently generating revenue.
Capital Infusion offers a variety of repayment plans for your desired term loan. Commonly, you may choose to pay off your debt in even amounts, or the amount you pay will gradually increase over the loan period. If you expect that you will be more financially able to repay in the future, causing an incremental increase may help you and save you interest.
Business Term Loans: Pro Vs Cons
Term Loan advantages
Business term loans provide fixed repayment schedules, making financial management more straightforward as businesses know the exact monthly payment amounts.
Receiving funds as a lump sum through term loans offers businesses immediate capital for major investments or growth initiatives, enabling significant operational enhancements.
SBA loans offer versatile options for how businesses can use the funds, from augmenting working capital to purchasing real estate or equipment.
Term loans often feature competitive interest rates, especially for secured loans, making them a cost-effective option compared to revolving credit lines or high-interest credit cards.
Term Loan disadvantages
Securing an SBA loan involves a detailed and lengthy application process that requires extensive documentation, adding complexity to securing funding.
Secured term loans require collateral, putting business assets at risk in cases of non-repayment. This adds a layer of financial risk that needs careful consideration.
The qualification criteria for term loans can be stringent, including thorough credit checks and financial assessments, which may limit access for newer businesses or those with less established credit histories.
Managing long-term debt requires robust financial planning, as it can become a burden, especially if the business experiences a downturn in revenue, potentially impacting its financial stability.
Alternative small business term loans options
Working Capital
Loan
Keep your business moving with continuous capital flow.
Revolving Line of
Credit
Always prepared, always available—unlock flexible funding with every draw.
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Equipment
Financing
Modernize and expand with dedicated equipment financing solutions.
SBA
Loans
Unlock your business potential with SBA-backed support.
Best Practices for Managing a Business Term Loan
Effective Strategies for utilizing a business term loan
Align Loan with Business Goals:
Use the loan for strategic investments that align with long-term business objectives, such as expanding operations, purchasing significant assets, or entering new markets. This ensures that the business term loan directly supports your company's growth strategy.
Consider the Full Cost:
When planning the use of the loan, factor in the total cost including interest, fees, and any other charges to ensure the investment is still profitable after these expenses. Calculating the full cost is crucial for maintaining business financial health.
Debt Scheduling:
Schedule your debt in a way that matches your business's cash flow patterns. This might involve choosing a loan with a repayment plan that aligns with your revenue cycle, helping to avoid cash crunches and enhance financial management.
Leverage for Growth:
Focus on using the loan to finance activities that directly contribute to business growth and revenue generation, ensuring the loan not only pays for itself but also contributes to business expansion. Effective use of a business term loan can be a significant factor in scaling your operations.
Common missteps when utilizing a business term loan
Overextending Credit:
Avoid borrowing more than what the business can realistically repay. Misjudging repayment ability can lead to financial distress and affect the business’s creditworthiness, crucial for future business lending opportunities.
Ignoring the Terms and Conditions:
It’s crucial to fully understand all the terms of the loan, including penalties for late payments or prepayment. Sometimes, these terms can significantly impact the overall cost or flexibility of the loan, important in small business financing.
Neglecting Interest Rate Impacts:
Be aware of whether your interest rate is fixed or variable. A variable rate can increase the total amount of interest paid if rates rise in the future, affecting your business's financial strategy.
Using Loans for Operating Expenses:
While tempting, using term loans for routine operating expenses can be a risky strategy as it may mask underlying financial problems instead of addressing them with more sustainable solutions. This practice can jeopardize business liquidity and long-term viability.