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Long-term business loans

When you're ready to grow your business, consider a 5 year loan to get your business the capital it needs.

Determining the right type of financing to expand your business can save you both time and money. Long-term loans often result in lower monthly payments that can ease the strain on your business’s budget – but smaller payments mean paying more in interest over the life of the loan. Compare the terms and requirements of long-term lenders to find the best option to help you invest in your business.

Long-term business loans

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
SharpShooter Funding Business Loan
Prime pricing from 9.00%
$500 - $250,000
6 - 120 months
$10,000 /month
100 days
Unsecured Term, Merchant Cash Advance, Invoice Factoring
To be eligible, you must have been in business for at least 100 days with a minimum of $10,000 in monthly deposits.

SharpShooter provides capital to small businesses that are underserved by banks and credit unions. It measures overall business health and potential rather than focusing strictly on traditional metrics. Fill out a simple application and get pre-approved in minutes. Receive your funds within 24 hours.
Swoop Funding Business Loan
4.00% - 25.00%
$1,000 - $5,000,000
3 - 60 months
$10,000 /month
24 months
Term, MCA, LOC & more
To be eligible, you must have been in business for at least 24 months and have a minimum of $100,000 in annual revenue.

Swoop partners with banks and alternative lenders to match your business with the right funding options. Register for free and browse your offers without affecting your credit score.
Loans Canada Business Loan
Prime Pricing from 9.00%
$2,000 - $350,000
3 - 60 months
$4,166 /month
100 days
Unsecured Term
To be eligible, you must have been in business for at least 100 days, have a credit score of 410+ and show a minimum of $4,166 in monthly deposits ($50,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $350,000. Complete one simple online application and get matched with your loan options.
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How do long-term business loans work?

Long-term business loans give you access to working capital for long-term expenses like new equipment, inventory, refinancing past business debt and investing in real estate.

  • Loan terms. Loan terms last anywhere from three months to 5 or 10 years, with some lenders offering terms as long as 20 or 25 years.
  • Loan amounts. Your business could borrow anywhere from $1,000 to $500,000, with some banks offering up to $1.25 million.
  • Eligibility criteria. Lenders determine your business’s eligibility by examining your revenue, time in business and personal credit score.
  • Documentation. You’ll need to provide quite a bit of documentation to back up your loan request including bank statements, cashflow statements and more.
  • Security. Business loans can be unsecured or secured with collateral. Though unsecured loans don’t require collateral, you may need to sign a personal guarantee holding you liable if your business fails to repay.
  • Repayment. Most long-term loans have a fixed monthly repayment schedule making it easy to budget years in the future.
  • Loan purpose. Some lenders want to know how you plan to use your funds, while others leave it open to whatever your business needs.

How long should my loan term be?

The length of your term is determined by you much your business can afford to pay monthly and in the long run. The longer the term, the lower the monthly repayments – but the more costly your loan will be.

5-year terms are best for:
  • New businesses
  • Owners with fair to good credit
  • Paying less total interest
10-year terms are best for:
  • Established businesses
  • Owners with good to excellent credit
  • Lowering monthly payments
25-year terms are best for:
  • Both new and established businesses
  • Businesses purchasing long-lasting equipment
  • Businesses purchasing real estate

What will borrowing a long-term business loan cost?

The cost of a business loan depends primarily on the interest rate and the length of your loan term. Other factors include your business and personal credit scores, collateral and the purpose of the loan.

Loan terms impact the amount you pay in interest over the life of the loan and your daily, weekly or monthly payment amounts.

Unfortunately, the cost of long-term business loans vary based on your business’s needs and financial situation, and can be hard to determine without applying first.

Calculating the cost of your loan

As an example, let’s say both you and your business have good credit. You’re looking for a $100,000 unsecured loan and a lender that’s willing to give you an interest rate of 5.50% or less.
  • 5-year loan term. Your monthly payment would be $1,910.12, and you’d pay a total of $14,606.97 in interest.
  • 10-year loan term. Your monthly payment would be $1,085.26, and you’d pay a total of $30,231.53 in interest.

Based on this, a five-year loan term would cost just over $800 more per month — which could strain your business’s finances — but it would cost you about $15,500 less over the life of your loan.

While other factors play a role, the total cost of interest for a long-term loan matters when you’re comparing financing options. A higher interest rate costs you more, no matter how long or short your loan term is.

What should I look for in a long-term business loan?

Look for lenders that are flexible and willing to negotiate payment terms. When comparing options, keep the following factors in mind to make your decision easier:

  • Lender reputation. You might have better luck with a lender you’re familiar with, but pay attention to online reviews — plenty of non-traditional lenders that are new to the market have glowing reviews.
  • Processing speed. Long-term loans usually take longer to process, and if you’re looking into a CSBFP loan, you should expect processing times to take a few weeks.
  • Competitive APR. By comparing lenders, you can find out who offers the lowest interest rates and determine how much your loan will cost in the long run.
  • Repayment term. Consider payment terms that suit your business’s revenue. Some lenders require bi-weekly, weekly or even daily repayments that can disrupt your cashflow — especially when business is slow. If you’d prefer to pay monthly, find a lender that offers this or consider negotiating with a lender.
  • Fees. Find out if lenders charge application or late fees for missed payments. If you think you could repay your loan early, check that it doesn’t charge a prepayment fee.

How do I apply for a long-term business loan?

Compare your options from our list of business loan lenders or research other options such as banks and credit unions. Start applying once you have your documents and a solid business plan outlining how you’ll use the money. Long-term loans may require more paperwork and time than loans with shorter terms, but the process is generally quite similar between lenders.

Lenders require you fill out an application and submit both personal and business documents. The underwriting phase may take anywhere from a few hours to a few weeks. If your business is approved for a loan, you’ll receive a loan agreement with the details of your loan, including the repayment schedule and interest rate. Once you agree to the terms, funding could take anywhere from a few hours to a few weeks.

Important documents and personal information

  • Bank statements. Lenders request your business’s bank statements to analyze cash flow from the past few months. This proves you know how to manage your finances and can afford to repay your loan.
  • Profit and loss statement. A profit and loss statement shows the actual profit of your business. This helps lenders determine how much your business makes and whether it can handle a loan.
  • Tax returns. Lenders use your business or personal tax returns to gauge how much you and your business make annually.
  • Credit report. Your personal and business credit report shows your overall score, payment history and whether you’ve defaulted in the past. This information helps lenders determine the risk of lending to you and your business.

Bottom line

When it comes to long-term business loans, there’s a lot to consider. You’ll want to carefully review how much capital you need and determine the repayments your business can handle before committing to a specific lender – but you could find a loan that can really make a positive impact on your business’s future. Just remember that a longer loan term often results in your business paying more in interest over the life of the loan. Take into account the fees, interest and loan term to get the best deal, and don’t forget to compare different business loan options to find the best option for your needs.

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