This post was originally published on On Deck
Business term loans are one of the most popular ways to secure funding for your business. Whether you’re looking to expand, purchase new equipment, or simply cover cash flow gaps, term loans can provide the financial flexibility you need.
But how do they work, and are they the right choice for your business?
Let us guide you through business term loans: benefits, drawbacks, alternatives and what’s required to qualify.
What is a business term loan?
A business term loan provides you with a lump sum of money that you repay over a fixed period of time, or “term.” Your scheduled payments are typically monthly or weekly and include a portion of the loan principal, interest and any fees the lender charges.
Term loans are often used for long-term investments, such as growing operations, acquiring equipment, or purchasing real estate.
Because this type of business financing usually comes with a fixed interest rate, term loans offer predictable repayment schedules, making financial planning easier for small business owners.
Lenders that offer term loans include traditional banks, credit unions, and online lenders.
How does a business term loan work?
Here’s how a business term loan typically works.
Applying for a business term loan.
— Read the rest of this post, which was originally published on On Deck.
