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Best Long Term Business Loans

Whether you’re looking to buy new materials or make large equipment purchases, it’s likely at some point you’ll need to take out a loan to benefit your business operations. When evaluating the vast array of loans that are available to small businesses, you’ll want to consider your personal credit score, the number of years you have been in business, your company’s annual revenue and your company’s needs.

Short Term vs Long Term Business Loans

Long term loans are ideal for businesses with excellent credit, multiple years in operation and extensive financial histories. This type of loan can come with repayment terms ranging anywhere from just one year to 25 years for a large quantity. These can be used for recurring expenses, large expenditures such as equipment or property purchases, or long term investments. APRs typically range between 4% and 30%.

While long term financing often has lower interest rates than short-term loans, they are best suited for borrowers with excellent credit scores, so may be more difficult to obtain if your credit hovers around or below 650.

If you’re just starting a business and haven’t established a longstanding financial history, short-term loans might be a good option to help meet your immediate financial needs. This type of loan often comes with three- to 18-month terms and requires daily or weekly payments. Annual percentage rates for this type of loan usually range between 8.5% and 80%. Due to their relatively high cost, are best for managing one-time expenses.

>>>Read more about short term business loans

Pros and Cons of Long Term Business Loans

Let’s take a look at some of the benefits and potentially negative aspects of taking out a long term business loan:

Pros:

  • Potential for low interest rates
  • Good for long term investment
  • Long repayment terms
  • Monthly, instead of daily or weekly payments
  • Good option for large equipment or property purchases

Cons:

  • New businesses and borrowers with low credit may have trouble getting approved
  • Risk of losing collateral in the event of default, if collateral was offered
  • Repayment terms might outlast the lifespan of the investment

Long Term Business Loans Up to 10 Years

Loan Amount:$30,000 - $350,000
APR Range:9.7% - 11.04%
Time To Fund:As soon as 7 days
Loan Term:10 Years
How To Qualify:675+ Personal Credit Score
$100,000+ Annual Revenue
Great Option For:Borrowers With Good Credit
SBA Loans

Click “Check Rates” to apply to SmartBiz

» MORE: SmartBiz SBA Loan Review

Best For: A SmartBiz loan could be a good option for you if you’re looking to expand your business, purchase real estate or refinance your debt. Their loan amounts start at $30,000, with a maximum of $350,000.

Pros:

  • Relatively low interest rates
  • Easy, online application process
  • Long repayment terms

Cons:

  • Can take several weeks to fund
  • Difficult for applicants with credit scores below 675 to qualify

Interest Rates: This lender offers loans with APRs ranging between 9.7% and 11.04%.

How To Qualify: To qualify for a SmartBiz loan, you should have a credit score above 675 and your business should have at least two years of operation under its belt and a minimum of $50,000 in annual revenue.

Loan Example: If you borrow $200,000, with a 10.5% APR and repayment term of 10 years, your minimum monthly payment will be $2,698.70.

Long Term Business Loans Up to 5 Years

Loan Amount:$5,000 - $300,000
APR Range:9.77% - 35.71%
Time To Fund:As quick as 2 days
Loan Term:One to five years
How To Qualify:620+ Personal Credit Score
$50,000 Annual Revenue
Great Option For:Good Personal Credit
Works With All Entities Including Sole Proprietors

Click “Check Rates” to apply to LendingClub

» MORE: LendingClub Business Loan Review

Best For: LendingClub’s long term business loans are ideal for smaller investments, equipment and material purchases and emergency expenses. Their loans start at $5,000 with a maximum amount of $300,000 and have repayment terms ranging between one and five years.

Pros:

  • Quick approval, with just one to 30 days to receive an application decision
  • Fixed interest rates

Cons:

  • Higher rates than a traditional bank
  • Difficult to qualify for, even for businesses with excellent credit and established financial histories

Interest Rates: LendingClub’s interest rates start at 9.77% and go up to 35.71%.

How To Qualify: To qualify for a LendingClub loan, you should have a personal credit score of at least 620, no recent bankruptcies or tax liens, and you must own 20% or more of the business. Your business should also have an annual sales revenue of at least $50,000, at least one year of operation under its belt.  

Loan Example: If you borrow a $20,000 loan with a three-year repayment term and 22.3% APR, your minimum monthly payments will be $766.92.

Loan Amount:$25,000 - $500,000
APR Range:4.99% - 26.99%%
Time To Fund:10 days on average
Loan Terms:One to five years
How To Qualify:660+ Personal Credit Score
No Minimum Annual Revenue
Great Option For:Established Businesses, Not Sole Proprietors

Click “Check Rates” to apply to Funding Circle

» MORE: Funding Circle Business Loan Review

Best For: With large amounts ranging between $25,000 and $500,000, a Funding Circle loan is ideal for a large investment such as a new machinery or equipment purchase, or property expansion. This peer-to-peer lender is best for businesses with excellent credit that have more than two years in operation. Small businesses should also be able to repay the loan within a five-year term.

Pros:

  • Low interest rates
  • High ceiling for loan amounts, with a maximum of $500,000
  • Fast approval, with a decision made within five to 15 days
  • Does not require business to be profitable

Cons:

  • Difficult for businesses with scores below 660 to qualify
  • Must be in business for at least 24 months

Interest Rates: This lender has some of the lowest interest in the industry, with rates starting at just 4.99% and ranging up to 26.99%. Payments are made on a monthly basis.

How To Qualify: To qualify for a Funding Circle loan, you should have a personal credit score above 660 and at least 24 months in business.

Loan Example: If you borrow $300,000 for your business, at an annual percentage rate of 12.5% and with a loan term of four years, your minimum monthly payments will come out to $7,974.

Loan Amount:$5,000 - $2 million
APR Range:6.00% - 24.00%%
Time to Fund:As early as same day
Loan Term:One to five years
How To Qualify:620+ Personal Credit Score
$120,000+ Annual Revenue
Great Option For:Equipment Financing
Competitive Interest Rates

Click “Check Rates” to apply to Currency Capital

» MORE: Currency Capital Business Loan Review

Best For: With a network of lenders offering amounts starting at $5,000 and ranging up to $2 million, Currency Capital’s affiliates have a large enough variety of products to satisfy any number of financial needs, from one-time supply purchases to acquiring multiple pieces of equipment.

Pros:

  • Several partner lenders
  • Wide range of loan amounts
  • Fast, online application
  • Quick to fund
  • Competitive interest rates for well-qualified borrowers

Cons:

  • Difficult for applicants with average or poor credit to qualify
  • Online lenders may be more expensive than a traditional bank
  • Origination fees and prepayment penalties

Interest Rates: This lender’s APRs are on par with the industry standard, starting at 6% and ranging up to 24%. Repayment terms are between one and five years.

How To Qualify: To qualify for a Currency Capital loan, your business should have annual revenue of at least $75,000 and a minimum of six months in operation. You also shouldn’t have any recent bankruptcies, and should have a minimum credit score of 585.

Loan Example: If you borrow $500,000 with a 15% APR and three-year repayment term, your minimum monthly payment will be $17,332.66.

Long Term Business Loans Up to 3 years

Loan Amount:$10,000 - $350,000
APR Range:8.00% - 25.00%%
Time to Fund:Typically 7 days
Loan Term:Up to 3 years
How To Qualify:680+ Personal Credit Score
$250,000+ Annual Revenue
Great Option For:Borrowers With Good Credit
Short & Medium-Term Financing

Click “Check Rates” to apply to Credibility Capital

» MORE: Credibility Capital Business Loan Review

Best For: With amounts ranging from $10,000 to $350,000, Credibility Capital loans are best for businesses with established financial histories and high credit scores who want to finance large investments such as equipment or property.

Pros

  • Competitive interest rates
  • Quick to fund, with an average of seven days to disbursement
  • Will match borrowers who don’t qualify to lenders that may be more likely to approve their application

Cons

  • Not available in Nevada, North Dakota, South Dakota or Vermont
  • New business owners or owners with poor credit may have difficulty qualifying
  • Loans require a UCC-1 filing

Interest Rates: APRs with this lender start at 8% with a maximum of 25%.

How To Qualify: To qualify for one of their loans, your business should have a minimum annual revenue of $250,000 and at least 18 months of operation under its belt. You should also have a personal credit score above 680, be a U.S. citizen and have no commercial or personal bankruptcies within the last five years.

Loan Example: If you borrow $100,000 with an APR of 9% and repayment term of two years, your minimum monthly payment will be $4,568.47

Qualifications For a Long Term Business Loan

There are a few major factors that lenders look at when evaluating your long term business loan application.

Cash and credit: Lenders will consider your annual revenue, as well as your financial and business credit history.

Insurance: Having proper disaster or other insurance for your business can increase your chances of approval for a long term loan.

Business Plan: By looking at your business plan, lenders can better understand the sustainability of your business as well as your financial goals.

Conclusion

Taking out a loan for your business needs can be immensely helpful if you are looking to expand or make major purchases. While making your decision on which loans fit your needs and qualifications, it’s important to look at your credit score and company’s financial history. One of the biggest factors in making a decision on a loan is evaluating the affordability of the repayment term. Depending on the amount that you want to borrow, a repayment term of three to five years might be more ideal than a 10-year term. As you research and figure out which option is right for you, make sure to compare multiple lenders’ offers and thoroughly understand each aspect of your agreement.

Compare Business Loans

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