How to Get a Mid-Term Business Loan
What is a Medium-Term Loan?
Medium-term loans are business loans offered by banks and BitX Funding. They typically offer fixed interest rates and flexible payback terms between one and five years. Depending on the loan, you typically have the option to repay in monthly or bi-monthly installments with no penalty for prepaying. While generally no need for collateral, lenders may request a personal guarantee to secure the loan.
When is a Medium-Term Loan Beneficial?
Medium-term business loans are useful when your business is past the startup phase, and you need capital to fund an acquisition or other expansion project.
In comparison, short-term loans usually provide a quick injection of working capital and must be repaid within a year. Two popular examples of short-term financing are merchant cash advances and business lines of credit.
With long-term loans, the recipient will repay the loan over a longer time.
Medium-term loans, on the other hand, may take one to three weeks to secure but offer longer repayment periods. Typically, lenders offer medium-term loan amounts up to $500,000 with average interest rates ranging from 6 percent to 20 percent APR.
In addition, the lender may also charge an origination fee. Since repayment terms can be extended up to five years, the project you are funding has time to mature and generate the cash flow you need to pay off the loan.
What are BitX Funding’s Rates/Term for a Mid-Term Loan:
- Prime + 2.75%
- 10 years with no pre-payment penalties
- 25 years on CRE purchase
Mid-term Business Loan Requirements:
- Credit Minimum is 670
- Profitable year over year
- Minimum Revenue per Year $250,000
- Minimum Time in Business 2 Years
- No change in ownership within 2 years
Mid-term Business Loan Uses:
Mid-term Business Loans differ from bank loans because the lenders leave it up to the borrowers to know how they can strategically use the funds for growth. There is great flexibility with the terms of mid-term business loans. Thus, business owners can use the capital for various projects. Some of the most common uses are:
- Marketing Campaigns
- Replenishing Stock/Inventory
- Upgrading Equipment
- Day-to-Day Cash Flow
- Safety Net for Emergencies
- Cover Operating Expenses
- Purchasing Software
- Hire a Business Consultant
BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and are passionate about helping your company reach its full potential.