Term Loans
Business term loans provide a lump sum of capital with fixed repayment schedules. They offer predictable monthly payments, longer terms than MCAs, and typically lower rates for qualified borrowers. The middle ground between fast MCAs and slow SBA loans.
What You Need to Know
Business term loans sit in the sweet spot between the speed of merchant cash advances and the low rates of SBA loans. You receive a lump sum, typically $25,000 to $500,000, and repay it in fixed weekly or monthly installments over a set period, usually 1 to 5 years. Interest rates from online lenders range from 7% to 30% APR depending on your creditworthiness, time in business, and revenue. For qualified borrowers (660+ credit, 2+ years in business, $100K+ revenue), rates on the lower end are achievable. The application process is straightforward: most online lenders require bank statements, tax returns, and a simple online application. Decisions come within 1-3 business days, with funding in 3-7 days, much faster than banks but slightly slower than MCAs. Term loans are ideal for specific growth investments like equipment purchases, hiring, inventory, or expansion where you know exactly how much capital you need and want predictable payments. The fixed payment structure makes budgeting easy, and many lenders offer early repayment discounts. Unlike MCAs, term loans report to business credit bureaus, helping you build your business credit profile for better rates in the future.