Business Term Loans

How It Works —

A term loan is debt capital that has a schedule of repayment that pays back over time. In our personal lives, we see this in mortgages – a large sum of capital that is paid back based on agreed-upon rates. Lenders offer these in short time increments as small as 3 months and as large as 5 years.

Example —

You receive $1M to be paid back in equal monthly increments plus interest for 3 years.

You Might Be A Fit If —

• Your business is comfortable with committing to make fixed payments to pay back the financing.
• Your company is profitable or someone is willing to guarantee the loan.

Why You Would Use This —

• Designed to finance projects or areas of the business that take some time to see results. 

• Companies can easily budget for the loan because of the predictability in a set repayment schedule.

What TO WATCH OUT FOR —

• Some lenders may want to check your personal credit or even ask for a personal guarantee to mitigate risk. 

  • Be aware of the impacts that the debt could have on your personal financial situation.

• Lenders will often ask for covenants that ensure companies continue to have business performance. 

  • Evaluate that the covenants work for the business throughout the life of the loan and won't keep the business from achieving its goals.