Fixed-rate, lump-sum financing with predictable monthly payments. Ideal for growth initiatives, large purchases, and working capital that requires longer repayment terms.
A term loan provides a lump sum of capital upfront that you repay over a fixed period with regular installments. Unlike a line of credit, you receive the full loan amount at closing and make consistent monthly or weekly payments until the balance is paid off.
Term loans are best suited for one-time expenses or investments where you know exactly how much you need and can plan for structured repayment.
$50,000 to $2M+ depending on business size, revenue, and credit profile.
12 to 36 months typical. Longer terms available through SBA programs.
APR typically ranges from 8% to 35% based on creditworthiness and business performance.
Fixed monthly or weekly payments. Fully amortizing with principal and interest.
24-72 hours for approval. Funding typically within 3-7 business days.
Many lenders offer prepayment options with no or minimal penalties.
A retail business with $750k annual revenue needs $150,000 to expand inventory and launch a marketing campaign. They qualify for a 36-month term loan at 18% APR.
Actual terms vary based on credit profile and lender. This is for illustrative purposes only.
Short-term loans typically have terms of 3-18 months with higher monthly payments but faster payoff. Long-term loans have terms of 2-5+ years with lower monthly payments but more total interest. Short-term loans are better for immediate needs, while long-term loans are better for large investments. Learn more in our short-term vs long-term loan comparison.
Loan amounts typically range from $50,000 to $2M+ depending on business revenue, creditworthiness, and loan purpose. Lenders typically approve 10-30% of annual revenue. Larger amounts may require collateral or SBA backing.
Most lenders require a personal credit score of 650+ for term loans, though some alternative lenders accept 600+. Higher scores (700+) qualify for better rates. Business credit scores and revenue also factor into approval.
Most lenders allow early payoff, but some charge prepayment penalties. Check your loan terms carefully. Prepayment penalties are typically 2-5% of the remaining balance. Many alternative lenders don't charge prepayment penalties.
Alternative lenders typically approve term loans in 24-72 hours, with funding within 3-7 business days. Traditional banks may take 1-4 weeks. SBA loans take 1-4 weeks for approval. Faster approval requires complete documentation.
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