Summary
Business financing. Short term loans and long term loans.
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In this article you will find information about short term loans and long term loans, the deffinition and how they work. 

If you are ready to apply now and don’t need more information so just fill in the form below. Or continue reading.

A term loan is a loan from a bank that is repaid at fixed intervals (weekly, bi-weekly, monthly) over a set period of time (or “term”).

Does your business need to buy new equipment, renovate office space or make a similar type of investment? A term loan is the most common form of business financing.

Usually range in size is from $2,000 to $5 million, with annual percentage rates ranging from 6% to 99%.

If your business requires immediate capital when you expect future cash flows, read about asset-based lending.

Types

First, let’s understand what is the difference among types:

  • Short term are 6-12 months loans
  • Intermediate term  are 1-3 years loans
  • Long term are 3-20 years loans

When choosing the length of a loan, you should calculate how long it will take for the asset being financed to provide a return, and to choose the type of loan accordingly.

  • short-term loan is more often an unsecured amount that you must pay off in 6-12 months. Sometimes you make daily payments. Because these are easier to be approved and have higher interest rates than longer-term, you should only apply for short-term funding for expenses you will immediately return this investment
  • Intermediate-term loans are usually taken for opening a new location, hiring new stuff, purchasing equipment, and refinancing debt. Usually, intermediate-term are payed off every 2 or 4 weeks. Intermediate-term loans allow time for an investment to begin to increase revenue. Repayment is often tied directly to the useful life of the asset being financed.
  • Long-term loans are always collateralized by a business’s assets and typically require quarterly or monthly payments. They are most appropriate for undertaking large construction projects and purchasing capital equipment, buildings, or other businesses.

Benefits of Short Term Loans and Long Term Loans

1YOU CAN USE MONEY FOR ANY PURPOSE OF YOUR BUSINESS. Term loans give the borrowing business the ability to use their cash flow in other areas, while the loan provides the funding needed for larger investments in the business.

2SET PERIODS OF PAYMENT. It is important especially for small businesses. You can plan your budget.

3 SIMPLE AND FAST APPLICATION. You don’t need to go to the bank and wait several days to get/not get approval. Just fill in a simple form below:

4BUSINESS EXTRAS. Term loans are tax-deductible. So every year you wll receive some extra cash. Moreover, you improve your credit score which can allow you to take loans in future with lower interest rates.

5If to speak about long term, so repayment terms can make big investments more affordable and help your business to grow a lot.

  • Term loans offer lower interest rate than credit cards
short term loans and loan term loans for business
business loans

How Does Term Loan Work?

In general, mechanics are simple: you get the hole sum upfront (minus any fees charged by the lender). You’re then responsible for repaying the amount in full over the period of the term, plus interest.

If your business requires immediate capital when you expect future cash flows, read about asset-based lending.

Where to Apply for Term Loans

Loans through banks and credit unions usually provide the lowest rates, but the tradeoff is that you’ll need good credit and strong business finances to get approved. Also it may take longer than you can wait to get cash in your bank account.

Loans through online lenders are typically faster to fund and have looser business and personal credit requirements, though they usually have higher rates.

But if you have already decided to make an investment in your business so apply now!

If your business requires immediate capital when you expect future cash flows, read about asset-based lending.

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