Launching and maintaining a business takes significant time, energy, and resources. Many aspiring entrepreneurs have brilliant plans and the know-how to implement them.
Still, they need more capital to make their dreams a reality.
It is why 56% of small businesses use loans to grow their operations, investigate new opportunities, or purchase assets.
Among the different kinds of business loans out there, term loans are a common choice.
In this blog post, we'll explore some of the best business term loans available and help you decide which one to choose.
So buckle up, and let's dive in!
A term loan is a loan for an agreed-upon amount with a set repayment schedule and a fixed or variable interest rate.
Term loans are available in a variety of lengths, which usually correspond to the loan's duration.
1. A short-term loan is typically for businesses that need temporary working capital and lasts less than a year, though it can also apply to a loan of up to 18 months.
2. A medium-term loan typically lasts 2–5 years, and you repay it in monthly installments from the cash flow of the company.
3. A long-term loan has a tenure of 5 to 25 years, is secured by company assets, and demands monthly or quarterly payments from earnings or cash flow.
A small business term loan can provide the funds necessary to purchase inventory, update machinery, or broaden the company's reach.
These loans are available from various sources, including conventional banks, online lenders, and financial providers.
Learn more about the best business term loans, such as lines of credit, term loans, and equipment financing, as well as other options, by reading below.
Loan amount: €10.000 – 2.500.000
APR: Depending on your product score
Minimum credit score: /
Myos is an asset-based financial provider that provides inventory funding and growth capital for small ecommerce businesses.
Using an AI-powered system, Myos evaluates the value of your products on the market and provides an adequate loan.
Myos offers 2 types of financing, perfect for any ecommerce seller, no matter what platform you use:
1. Purchase financing allows you to obtain working capital and expand your growth with additional orders.
2. Stock financing uses your current inventory as a deposit for your business growth. Use the funds to launch a new product or to advertise.
How It Works
To apply for a loan, follow the simple steps below:
1. Create an account
2. Identify your funding requirements (stock, planned, and current orders).
3. Add products and provide sales data.
4: Enter account details (business information and legitimation).
5. Confirm your request, and within 72 hours, your project request will be reviewed.
After that, you can accept the offer.
One significant advantage of a flexible payment plan is that you can only make payments when your turnover is sufficient, eliminating concerns about slow months.
Furthermore, there are no penalties for early repayment of the loan. However, your monthly payments will be based solely on the outstanding capital amount, and your product score will determine the percentage fee you're charged.
To receive funding from Myos, you need to meet the following requirements:
Since a loan is based on your products, follow these points to ensure they are suitable:
✅ No personal guarantee, only goods as collateral.
✅ Less stringent loan requirements
✅ No excessive paperwork, 3-step online application
✅ Quick funding, up to 72 hours
✅ Confidental funding, you don’t have to notify your suppliers or customers
✅ Flexible payments without extra costs
✅ Always available customers supports, via email, chat or in-person
❌ Limited amount of funding may not be suitable for larger businesses
Loan amount: $1,000 to $150,000
APR: Start at 4.66%
Minimum credit score: 600
Fundbox is an AI-powered business lending platform that provides business term loans and credit lines. Its short-term loan lines are valued at up to $150,000, with repayment durations of 12 or 24 weeks and flexible qualifying restrictions, making it the finest for lines of credit.
Rather than charging traditional monthly interest, the lender assesses a fee, which is incorporated into your payment at the same time each week via a direct link to your accounting software and bank accounts.
Fees are only due once you have used your credit line.
The approval requirements are the following:
✅ Simple qualifying requirements
✅ Pricing transparency
✅ Rapid funding
✅ After you pay the loan off, you can reuse it.
❌ Required minimum revenue
❌ Weekly payments are required.
Loan amount: $5,000 to $250,000
APR: Start at 29.9%
Minimum credit score: 625
OnDeck provides term loans ranging from $5,000 to $250,000 with repayment durations of up to 24 months.
You can also get up to $100,000 through its line of credit, which has a 12-month repayment period that resets after each withdrawal.
OnDeck's same-day funding is one of its finest features.
For example, you can receive your funds before 5 p.m. if you borrow up to $100,000 and live in a qualifying state.
If you qualify, this lender also charges an upfront origination fee, which may be reduced or eliminated on subsequent loans.
Suppose you do not qualify for OnDeck's prepayment benefit and pay off your loan early. However, you must still pay 75% of the remaining interest based on the original loan agreement.
Payments are automatically deducted from your bank account daily or monthly.
✅ Same-day funding
✅ Credit score requirements are relatively low.
✅ Loyal customers receive discounts on future loans.
❌ You need to make payments on a daily or weekly basis.
❌ You need to pay the origination fee upfront.
❌ The same-day funding availability is limited.
❌ There is a possibility of a prepayment penalty.
Loan amount: $10,000 to $1,000,000
APR: Factor rate from 1.04 to 1.5.
Minimum credit score: Personal credit score of 650
SnapCap is a LendingTree company that provides short and medium-term unsecured business loans.
Unsecured loans don't require collateral. However, you need to provide a personal guarantee.
Loan amounts range from $10,000 to $1,000,000, with durations ranging from 3 to 36 months.
The approval method prioritizes income, cash flow, and client base over traditional loan parameters such as credit score.
The interest rate might also vary depending on various criteria, such as your recent business success, industry, loan length, and loan amount.
You can expect to receive your funds within 48 hours if your loan gets approved, which can happen the same day you apply.
Repayment lengths range from 3 months to 3 years, daily or weekly, using withdrawals from your business bank account.
The application process is quick and easy, utilizing a basic questionnaire.
Any company entity can get a loan, including sole proprietorships, corporations, and partnerships.
Furthermore, you can use these loans for various business purposes, including equipment financing, payroll, location refurbishment, invoice factoring, etc.
✅ Available to business owners with poor credit.
✅ Loans of up to $1 million are available.
✅ Options for short- and medium-term repayment
✅ Several loan options
❌ Annual revenue requirement that is somewhat restrictive
❌ You need to make daily or weekly payments.
❌ You may need to pay an origination fee.
❌ Lack of transparency on fees
Loan amount: £1,000 to £25,000
APR: from 12%
Minimum credit score: /
Barclays Bank is a global financial institution that offers a variety of loans for small and medium-sized enterprises that require financial investment to expand and develop their operations.
Small business loans are unsecured loans with a flexible repayment schedule ranging from 1 to 10 years.
They have fixed interest rates and the option of taking a six-month repayment break.
However, interest will continue to accrue throughout these times.
Medium-sized business loans last up to 20 years.
Additionally, they also have fixed or variable interest rates and the option of 12 months of interest-only repayments.
You can use any asset as collateral for secured loans to cover payments if you cannot make them.
If you apply for a small business loan online, you will get a decision within a few days, and the funds will be in your account within 24 hours.
Different factors determine the interest rate, such as the amount you apply for, the period of the loan, your credit score, and your income.
If you decide to apply for a Barclays Bank business loan, the following information will be required:
Also, you must meet the following personal requirements:
✅ There is no requirement for a minimum turnover or trading history.
✅ Competitive representative APR from 12% (fixed)
✅ Loan lengths of up to ten years
✅ There is no setup cost (for loans of less than £25,000).
✅ Make overpayments or pay them off in full without penalty.
❌ It is possible that you need to provide a personal guarantee.
❌ For less established companies, matched finance may be used
Loan amount: £1,000 to £25,000
APR: from 12%
Minimum credit score: /
Loan amount: £500 to £15,000,000
APR: from 12%
Minimum credit score: /
Tide is a challenger bank aimed at small and medium-sized businesses that offers a selection of business loans and cash flow possibilities.
Tide business loans include start-up loans, business financing, and invoice factoring.
In addition, they provide merchant cash advances, equity loans, and grant financing.
To assist you in finding the right loan, Tide's Cashflow Insights tool can examine your finances and show you how much you could borrow and your options.
Tide will then give you customized credit choices utilizing its open banking technology.
For example, business loans are among the most common choices and necessitate a personal guarantee.
Tide partners provide these fixed or variable-rate loans rather than the bank.
Still, they may use the same simple method within their APP.
You can receive between £500 and £15,000,000, and the term is from 1 month to 6 years.
Also, there is no minimum turnover or time limit for trading.
To apply for a Tide business loan, link your business bank account to Tide. Tide will then use open banking to determine which loans you are qualified for.
Note that it has no bearing on your credit score.
You can see your credit options and apply once you are connected.
To apply for a business loan, you will typically need to be:
✅ Swift application process and funding
✅ No hidden fees or charges
✅ Smaller loans are available with a soft credit check and no personal guarantees
❌ Relatively new service without relevant user experience reviews
Term loans might be an excellent way to fund your business's growth plans and give you a sizable one-time sum.
You can apply for a term loan through a bank, credit union, or online lender.
If you acquire a fixed-rate loan, your interest rate will remain constant during the loan term.
In contrast, your interest rate will fluctuate on a variable-interest loan.
Still, you should remember that the interest rate is not your sole cost when you obtain a loan.
Origination, processing, and prepayment fees are all reasonable expenses that you must be aware of when calculating the total cost of a loan.
In conclusion, business term loans are a highly sought-after source of commercial funding for various reasons. Whether you require a loan for a brief or extended period, you have many options, including online lenders and traditional banks.
It's critical to find a loan that suits your budget, so take the time to research and compare various loan offers from multiple lenders before deciding.
But, when you need money quickly for things like rapid expansion or increased production, asset-based loans can provide it much faster than other types of loans.
The most apparent benefit of asset-based loans is their accessibility.
Thus, borrowers with less-than-perfect personal or business credit can nonetheless qualify for adequate funding. In addition, a good credit score, substantial financial history, a manageable debt-to-income ratio, and other factors are not as important when securing an asset-based loan as a bank loan.
If you use an asset as collateral for a loan, the lender will know it will get its money back even if you default.
Recognizing that identifying the appropriate loan can be a daunting task, we've outlined the key features of Myos financing:
So, get a free,o-obligation proposal today and discover why Myos is the top pick for countless online sellers!
Business term loans can be used for various purposes, such as purchasing equipment, expanding the business, or refinancing existing debt. However, lenders may have restrictions on how you can use the funds.
Business term loans provide a lump sum of money that you can use for long-term investments, and the repayment schedule is usually fixed, making it easier for businesses to plan and budget. Additionally, interest rates for term loans are typically lower than other types of financing, such as credit cards.
Business term loans usually require collateral, which can be risky if the borrower defaults. Additionally, the approval process can be lengthy, and you may need to provide detailed financial information.
Finally, you are responsible for making regular payments, which can strain cash flow if the business experiences financial difficulties.
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