Best 20 Year Business Loans for Good & Bad Credit

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How to Get a 20 Year Business Loan

A 20-year business loan would be considered a long-term business loan. Most traditional banks grant larger business loans with favorable terms and lower interest rates for business owners who have high credit scores, a strong cash flow, and a demonstrated history of profitability. A 20-year business loan is typically not granted to startups since they lack the operational history that an established business may have. However, a startup may be able to qualify for a 20-year business loan if they can secure the loan with assets. Either way, if you are a business owner, prequalifying for a business loan is the quickest and easiest way to know for sure what lenders are willing to offer you in terms of interest rates and lengths of loan repayment periods.

What can a 20 year business loan be used for?

Of course, for the most part, if you are a business owner and you qualify for a 20-year business loan, you can use the funds at your own discretion. However, there are some intelligent ways to put the funds from a business loan to work that can help you expand your business. Here are the six most intelligent ways a business owner can use an influx of cash to help their business thrive.

  1. Marketing: Using a business loan to launch a new product, service, or to develop a new marketing campaign is an intelligent use of the funds from a business loan. Investing in your brand positioning and image is always a productive use of funds. A successful marketing campaign can do wonders to support a product launch. 
  2. Working Capital: Sometimes a business simply needs cash on hand to pay for basic operations. This is often referred to as working capital. Having a strong cash reserve will help you cover the costs of day-to-day operations.
  3. Debt Consolidation: If your business has a large amount of high-interest business credit card debt, you could benefit from a debt consolidation loan that will cover all of your current debts but at a much lower interest rate than what you are currently paying. 
  4. Inventory purchase: Inventory is essential for many businesses whether you own a retail store or you have an online eCommerce store. A business loan can be used to make bulk purchases of inventory to allow you the ability to keep up with consumer demand. 
  5. Equipment purchase: Depending on the nature of your business, you may need to purchase essential equipment. Essential equipment could be anything from machinery, computers, and/or vehicles. If a particular piece of equipment is necessary for the function of your business, you could use a 20-year business loan to make the purchase. 

Business loans can be used for a variety of purposes. Above are five of the most intelligent uses of the funds from a 20-year business loan. Other uses could involve hiring additional employees and investing in human capital. Human capital is a vital part of any business. 

Why Would You Need a 20 Year Term  Business Loan?

The most productive way to utilize a 20-year business loan is to use the funds to help you expand your business. You could hire new staff, purchase inventory, purchase real estate, or purchase more of the necessary equipment that is needed to help your business grow. Once you have a business model that works, and the profit potential is there, a long-term business loan may be the best option for your business to receive the capital it needs to take it to the next level. 

Pros & Cons of a 20 Year Business Loan

As there are many benefits to a 20-year business loan, there are also downsides. You may want to be fully aware of both the pros and the cons of taking on a 20-year business loan. Here is a quick breakdown of some of the pros and cons of obtaining a 20-year business loan. 


  • A large infusion of cash: A large 20-year commercial business loan can give a small business the immediate funds that they need to make some large purchases, acquire new staff, and possibly pay to open new and multiple locations. Essentially, if expansion is the goal, a large amount of cash is needed to make it happen.
  • Maintain private ownership: By raising funds through selling shares of equity in your company, you are essentially relinquishing control. If you pursue funding through a commercial business loan, you can keep more control and decision-making power in the day-to-day operations of your business. 
  • Working capital: Irregular revenue streams can be a struggle for any small business. With a business loan, you can get the working capital you need to cover all your expenses even when revenues are down. Revenue could be down for seasonal fluctuations or a variety of reasons. Having a strong cash reserve gives you the working capital you need to keep the lights on. 


  • Minimal flexibility: Unlike a personal loan, a commercial business loan requires a business plan that lets the lender know how you expect to use the funds. Additionally, a business loan requires monthly payments that could potentially be difficult to make if your business is seasonal or it experiences “slow” times. 
  • What happens if you default: Often business loans may require an asset to be used to secure the loan. If you happen to default on the loan, you risk losing that asset. 
  • Complicated loan process: If you are seeking a business loan through a traditional financial institution, you may experience a long and complicated loan process that requires immense amounts of paperwork. Using an online lender can help to reduce some of the burdens, but for a 20-year loan, many lenders are going to want to feel that lending you the funds you are asking for is a giant risk. 

If you are looking to obtain a 20-year business loan, it may be in your best interest to explore all the advantages and disadvantages of taking on a significant amount of financing. 

Do you need good credit for a 20 year business loan?

Yes. A 20-year business loan is a significant loan that requires a good credit score, a strong cash flow, and a demonstrated history of successful business operation. Typically, if a business and a lender are entering into a loan agreement with a repayment term of 20-years, the amount of the loan will be substantial. This is why most lenders will have more stringent requirements to obtain the loan. 

What minimum credit score is needed to qualify for a 20 year business loan?

If you are looking for a 20-year business loan and you are using your personal credit score to qualify, you should have a minimum credit score of 680 or higher. If you have a credit score below 680, you may have a better chance of qualifying for alternative types of financing that are more short-term or that require assets as collateral. 

What is the interest rate on a 20 year business loan?

If you are looking for a 20-year business loan, you may find that interest rates can be typically lower than other types of financing. Currently, 20-year term loans have an average APR between 3% and 7%. 

How much of a business loan can I qualify for?

The average term loan for a small business comes out to be around $500,000. However, with a 20-year business loan, you may be able to qualify for more if you have good credit history and a strong cash flow. 

Where to Apply for a 20 Year Business Loan

Whether you are borrowing money for personal or business use, you will want to ensure you find the best loan offer. Borrowing money usually costs money and for that reason, you will want to keep the cost down. At PrimeRates you can shop business loan offers from top national lenders. Our lending partners can help small and large businesses find competitive business loans. Alternatively banks and credit unions can offer business loans but they usually have more strict requirements. Before committing to a business loan you should always compare your options.

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See the online credit card applications for details about the terms and conditions of an offer. Reasonable efforts are made to maintain accurate information. However, all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the issuer’s web site.

The offers that appear on this site are from third party advertisers from which PrimeRates receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). PrimeRates strives to provide a wide array of offers, but our offers do not represent all financial services companies or products.

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