Business Term Loans — Fixed Payments, Flexible Amounts

Business Term Loan at a glance

Typical amount

$25,000 – $2,000,000

Typical term

1 – 10 years

APR

7% – 30% APR

Minimum time in business

1 year

Minimum credit score

600+

Common uses for a Term Loan

• Expansion
• Equipment
• Hiring
• Marketing campaigns

How LendWorks matches you with a Term Loan lender

1. Apply in about two minutes — no credit-score impact.
2. Our AI underwriting engine grades your file and matches you with a dedicated advisor.
3. Your advisor presents vetted Business Term Loan offers side by side — you choose or walk away.

Business Term Loan FAQs

What is a Business Term Loan?

A business term loan delivers a fixed lump sum repaid over a set schedule with predictable monthly payments — the classic business funding structure.

How much can I borrow with a Term Loan?

Typical funding amounts range from $25,000 – $2,000,000. Your exact offer depends on revenue, time in business, credit profile, and business performance.

What are the rates for Business Term Loan?

Business Term Loan typically runs 7% – 30% APR. Your actual pricing depends on revenue, time in business, credit profile, and term — your advisor breaks down the real cost and total payback before you commit, so there are no surprises.

How long does it take to get funded with Business Term Loan?

Funding timelines vary by product and lender — some options fund within a few business days, while larger or government-backed programs take longer. Your advisor gives you a realistic timeline for Business Term Loan based on your documents and lender fit.

What do I need to qualify for Business Term Loan?

Most lenders look for at least 1 year in business and a 600+ credit score. Your advisor will assess your full profile.

Is Business Term Loan right for my business?

Business Term Loan fits best when you need expansion or equipment and can work with a 1 – 10 years term. If your timeline is longer or you can wait for a lower rate, your advisor may recommend an alternative — the goal is the right fit, not just the fastest approval.

How does LendWorks match me with a Term Loan lender?

LendWorks runs your profile through AI underwriting to match you with a real advisor — not a lead form. Your advisor reviews your situation and presents options from our vetted lender network.

Does applying for Business Term Loan hurt my credit score?

Checking your options with LendWorks does not impact your credit score. We use a soft pull to assess eligibility. A hard pull only occurs when you move forward with a specific lender offer.

Frequently asked questions

What is the difference between a short-term and a long-term business loan?

Short-term business loans (3–24 months) are typically offered by alternative lenders with streamlined underwriting. They feature faster approvals and funding but carry higher interest rates — often 15–50% APR. Long-term business loans (2–10 years) are offered by banks, credit unions, and SBA-approved lenders. They require more documentation, have longer approval timelines, but offer significantly lower rates — often 6–15% APR for qualified borrowers. The right choice depends on the urgency of your need, your borrower profile, and how long the funded asset will generate return.

How are business term loan interest rates calculated?

Business term loan rates can be expressed as simple interest (annualized), a factor rate, or an APR. Simple interest is the most transparent — a 12% annual rate on a $100,000 12-month loan means roughly $6,622 in total interest using standard amortization. Factor rates (common with alternative lenders) are simpler: multiply the factor by the principal. APR includes all fees and costs in the calculation, which is the most apples-to-apples comparison method. Always ask for the APR and total repayment amount before accepting any term loan offer.

Can I get a business term loan with bad credit?

Yes — alternative lenders offer term loan products to businesses with credit scores as low as 580–600, though you will pay higher rates. Some non-bank lenders focus entirely on revenue and cash flow rather than credit. If your personal credit is below 600, consider whether a revenue-based product might be more accessible, or whether it is worth taking 6–12 months to improve your credit profile before applying for a larger facility. An experienced broker can match you with lenders whose credit criteria fit your actual profile.

What is an origination fee and should I worry about it?

An origination fee is a one-time charge assessed at closing, typically ranging from 1–5% of the loan amount. It is deducted from your proceeds (e.g., a 2% fee on a $100,000 loan means you receive $98,000 but repay the full $100,000 plus interest). Origination fees are common across alternative and bank lenders and are not inherently a red flag — but they should be factored into your total cost calculation. Ask for the APR with all fees included to compare offers accurately.

What documents do I need to apply for a business term loan?

The documentation requirements depend on the lender type and loan amount. Alternative lenders typically require 3–6 months of business bank statements, a one-page application, and basic business information. Bank and SBA lenders require 2–3 years of business and personal tax returns, YTD profit & loss statement and balance sheet, a business plan (for SBA and larger loans), accounts receivable and payable aging reports, and a personal financial statement. Having a clean, organized submission package significantly speeds up the approval process with any lender.

Is a personal guarantee required for a business term loan?

Most lenders — alternative and traditional — require a personal guarantee from all owners with 20%+ equity stake in the business. A personal guarantee means the owner is personally liable for the debt if the business defaults. Some lenders also take a UCC-1 blanket lien on business assets as additional security. Unsecured term loans (no personal guarantee, no UCC lien) exist but are rare and typically available only to businesses with very strong credit profiles and revenues.

Can I pay off a business term loan early?

Prepayment policies vary by lender. Many alternative lenders allow early payoff without penalty — and if the loan uses simple interest, you will save money by paying early. Some lenders charge a prepayment penalty (often 1–5% of the remaining balance) if you pay off within the first 6–12 months. Bank loans and SBA 7(a) loans have specific prepayment penalty rules set by the SBA or the bank. Always confirm the prepayment policy before signing — especially if you anticipate refinancing or expect the business to have surplus cash within the first year.

How does a business term loan affect my business credit?

Many business lenders report loan activity to commercial credit bureaus including Dun & Bradstreet, Experian Business, and Equifax Business. On-time payments build a positive business credit history, improving your Paydex score (D&B) and making future financing easier to obtain at lower rates. Derogatory marks from missed payments or defaults can remain on your business credit report for 6–7 years. Using a term loan responsibly is one of the most effective ways to build the business credit profile needed for larger bank facilities down the road.