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Long-term business loans

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When you’re ready to grow your business, consider a 5- to 10-year loan to get your business the capital it needs.

Determining the right type of financing to expand your business can make the difference between paying high fees and spending more money. Long-term loans often result in lower monthly payments that can ease the strain on your business’s budget. But smaller payments mean owing more in interest. Compare the terms and requirements of long-term lenders tp find the best option to help you invest in your business.

Funding Circle Business Loans

Funding Circle Peer-to-Peer Business Loans

Small business loans of up to $500,000 made easy with this established peer-to-peer lender.

  • Minimum Loan Amount: $25,000
  • Faster than a typical bank loan.
  • Solid customer service.
  • Requirements: Must be in business at least two years and have a 620+ credit score

    Top 5 long-term business loans

    While the best loan depend on your business’s unique circumstances, these lenders could help businesses facing all types of financial need.

    1. Funding Circle

    A peer-to-peer business lender that offers a range of repayment terms to meet most budgets.

    • Term length: 0.50 year to 5 years
    • Loan amount:$25,000 to $500,000

    Get a Funding Circle business loan

    2. SmartBiz

    An SBA lender that also offers non-SBA bank term loans at affordable rates.

    • Term length: 10 years to 25 years
    • Loan amount: $30,000 to $5,000,000

    Get a SmartBiz business loan

    3. Capital One

    A big-name bank that may have strict requirements, but affordable repayment terms.

    • Term length: 1 year to 5 years
    • Loan amount: As low as $10,000

    Read our Capital One business loans review

    4. Chase

    A popular bank for business loans that offers SBA loans, lines of credit and other financing types.

    • Term length: $5,000 to $500,000
    • Loan amount: 1 year to 7 years

    Read our Chase business loans review

    5. National Business Capital

    A lender and connection service that could match you with a variety loan types to get the long term you’re looking for.

    • Term length: 0.25 year to 25 years
    • Loan amount: $10,000 to $5,000,000

    Get a National Business Capital business loan

    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 one to 25 years, though most loans are somewhere in the five- to 10-year range.
    • Loan amounts. Your business could borrow from $5,000 to $500,000. For well-qualified businesses, loans can be over a million dollars.
    • Eligibility criteria. Lenders determine your business’s eligibility by examining business history, cash flow and credit score. Established businesses generally qualify for longer loan terms at better rates.
    • Documentation. You’ll need to provide quite a bit of documentation to back up your loan request, and even five-year loans require you to be in business at least a few years and have good to excellent business credit.
    • 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. Other’s leave it open to whatever your business needs.

    Compare more business loan options

    Rates last updated October 23rd, 2018
    Unfortunately, none of the business loan providers currently offer loans for these criteria.
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    Credibly Business Loans
    Funding to cover business expenses with daily or weekly repayments.
    $5,000
    $250,000
    At least 6 months in business, average $10,000 in monthly deposits.
    Lendio Business Loan Marketplace
    Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
    $500
    $5,000,000
    Must operate a business in the US or Canada, have a business bank account and have a personal credit score of 560+.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $50,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    Lending Express Business Loan Marketplace
    $5,000
    $500,000
    At least 3 months in business and $10,000+ in monthly revenue. Your business might also qualify if it's been in business at least 6 months with $3,000+ in monthly revenue.
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
    LendingTree Business Loans
    Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

    Compare up to 4 providers

    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, however you’ll pay back more interest overall.

    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.

    Which lenders offer business loans with 5-year terms?

    LenderLoan amountBest for
    LendingClub$5,000–$300,000Businesses that need large loan amounts to be repaid quickly.Go to site
    Fundation$20,000–$500,000Small businesses that want the speed of an online lender with the underwriting process of a bank.
    Wells Fargo$10,000–$100,000Businesses looking for a smaller loan with a well-known bank.

    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 impacts the amount you pay in interest over the life of the loan and your daily, weekly or monthly payments amounts.

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

    Calculating the cost of your loan

    For example, let’s say your business has good credit. You’re looking for a $100,000 unsecured loan and a lender that’s willing to give you an interest rate of 4.50% or less.

    • 5-year loan term. Your monthly payment would be $1,864.30, costing $11,858.12 in interest.
    • 10-year loan term. Your monthly payment would be $1,036.38, costing $24,366.09 in interest.

    Based on this, a five-year loan term would cost about $800 more per month — which could strain your business’s finances — but it would cost you about $12,000 less over the life of your loan.

    While other factors play a role, the total cost of interest for a long-term loan matter 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 lenders new to the market have glowing reviews.
    • Processing speed. Long-term loans usually take longer to process, and if you’re looking into an SBA loan, you should expect processing times to take many weeks.
    • Competitive APR. By comparing lenders, determine who has the best interest rates and how much your loan costs in the long run.
    • Repayment term. Consider payment terms that suits your business’s revenue. Some lenders require weekly or daily repayments that can disrupt your cashflow — especially when business is slow.
    • 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 bank options. 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 days 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 repayment schedule and interest. Once you agree to the terms, funding could take up 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 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 if you’ve defaulted in the past to determine the risk of lending to 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 the payments your business can handle before committing to a specific lender, but you could find a loan that can really make an impact on your business’s future. Just remember that a longer loan term often results in your business paying more for interest. 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 that can help your business grow.

    Frequently asked questions

    Picture: Shutterstock

    Kellye Guinan

    Kellye Guinan is a writer and editor with finder.com and has years of experience in academic writing and research. Between her passion for books and her love of language, she works on creating stories and volunteering her time on worthy causes. She lives in the woods and likes to find new bug friends in between reading just a little too much nonfiction.

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