What is the difference between a term loan and a line of credit?

A term loan gives you the full amount upfront which you repay over a set schedule. A line of credit gives you access to a pool of funds to draw from as needed.

Are interest rates fixed or variable?

Some term loans have fixed rates and others have variable rates. The provider's offer documents should state the rate, payment schedule, and any adjustment terms.

Will I need to provide collateral?

It depends on the provider, amount, and business profile. Some term loans are unsecured, while others may require a blanket lien, guarantee, or specific business assets.

Are there prepayment penalties?

Prepayment terms vary by provider and agreement. Some offers have no fee, while others may charge a fee or use a structure where early payoff does not reduce the total cost as expected.

How often are payments made?

Payments may be monthly, weekly, or biweekly depending on the provider and product structure. Confirm the schedule before accepting an offer.

What documentation is required?

Providers may request bank statements, tax returns, financial statements, and details about use of proceeds. The exact checklist depends on the provider and application.

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Business Term Loans

A lump sum of capital that you repay with regular, fixed payments over a set period. Predictable financing for specific investments.

Maximum shown$500K

Repayment Term1 - 10 years (provider dependent)

Interest Rate7% - 30% APR shown; quoted terms vary

Overview

A business term loan is a lump sum of capital that you borrow and repay on a set schedule with a fixed interest rate. It's the most traditional form of business financing.

Term loans provide a predictable repayment schedule, making it easy to budget. They are ideal for specific, one-time investments that will generate a return over the life of the loan.

Key Features

Lump Sum

Get all your funds upfront for immediate use.

Fixed Payments

Some term loans use predictable monthly or weekly payments; the provider sets the schedule.

Set Terms

A stated repayment timeline depends on the provider agreement and product structure.

Lower Rates

May carry lower rates than some short-term or alternative products; compare each offer.

Build Credit

Consistent payments help build your business credit profile.

Versatile

Use of proceeds depends on the provider agreement and business purpose.

Common Use Cases

Business Expansion

Open a new location or hire additional staff.

Equipment Purchase

Buy long-term assets that will generate revenue.

Refinancing

Consolidate higher-interest short-term debt into one payment.

Major Renovations

Remodel your storefront or upgrade your facilities.

Frequently Asked Questions

Loan Details

Loan Amount$25,000 - $500,000 (provider dependent)
Repayment Term1 - 10 years (provider dependent)
Interest Rate7% - 30% APR shown; quoted terms vary
Time to FundOften 2 - 7 days after approval; varies

Common lender guidelines

These are common provider screening guidelines, not guaranteed minimums. Eligibility, credit standards, documentation, collateral, and final terms vary by provider.

1-2 years in business is a common provider guideline
620+ personal credit is a common provider benchmark, not a universal requirement
$100,000+ annual revenue is a common provider guideline; thresholds vary
Providers commonly review cash flow history and business deposits

How to Apply

1
Submit 5-min form
2
Review matches
3
Provide documents
4
Receive funds

Timing expectations

After a completed application, quotes are typically provided within 24–72 hours. After acceptance, funding may be same day or within 24 hours, subject to provider approval, required documents, and bank processing.

SBA loans may take up to 60 days. All timelines are estimates and vary by product, provider, application, and banking process.

You might also consider

Working Capital

Fast, accessible capital to cover everyday business expenses. Short-term financing designed to keep your operations running smoothly.

SBA 7(a) Loan

The gold standard for small business funding. Long terms, low rates, and government backing make this ideal for major investments.

Merchant Cash Advance

An advance based on your future credit card sales. Repayment adjusts with your revenue, making it perfect for businesses with fluctuating sales.

More resources

Startup business loans guide Construction & real estate funding Professional services funding

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