The Most Common Type of Business Loan with Set Interest Rate & Term.
A Term Loan is the most common type of loan and likely what most people think of when they think of business loans.
Term loans are most suited to established small businesses with sound financial statements, good owner credit, and the ability to make a substantial down payment to minimize both the monthly loan payment and the total cost of the loan.
With a Term Loan, a business borrows a predetermined amount of money with a set interest rate, which may be fixed or variable, and then re-pays the loan over an agreed-upon amount of time in a specified interval and payment amount.
Term loans are classified into two types:
Because of the application, collateral, and credit score requirements associated with traditional Term Loans, many businesses prefer Revenue Based Loans where the risks are reduced since no collateral or personal guarantee are required. Also, since less paperwork is required and owner credit score does not prevent approval of a Revenue Based Loan, it makes qualification much quicker and easier.
There are typically few restrictions on use of funds for a Term Loan, however, they're typically used to fund larger purchases and best used to create more revenue for the business such as for marketing and business expansion. However funds can also be used for things like purchasing new supplies & equipment and emergency needs such as the ability to meet payroll, pay taxes, or make rent.
Low Interest With Set Rate & Term Make Calculating ROI Easy!
For those that are willing to deal with a little more paperwork and have the required collateral and credit score, a Term Loan may be the best option. The benefits of Term Loans include:
Get The Help You Need!
At CyoGate, because our success is based on your success, we are always happy to help. Our professional team of Business Funding Specialists are available to help you find the best business loan and credit card processing options available.