A term loan gives you the full amount up front. You repay it in regular instalments of principal and interest over an agreed term, so you know exactly what each payment will be and when the loan will be paid off.
Rates can be fixed, so payments never change, or variable, moving with the lender’s prime rate. The term is usually matched to what you’re financing: shorter for working capital, longer for equipment or property.
What lenders review
- Time in business and the consistency of your results
- Revenue and cash flow, usually from recent business bank statements and financial statements
- Personal and business credit history
- What the funds are for and how they help the business earn or save money
- Existing debt, so the new payment fits comfortably
Larger loans are usually secured by business assets such as equipment or property, and many lenders ask owners for a personal guarantee. We explain every condition before you sign.