Fund projects and purchases that drive your business forward.
Mid-term business loans generally have repayment terms between one to five years and carry interest from 10% to 40% APR. These loans require a better credit score, higher revenues, and longer time in business than short-term loans. However, they also have lower APRs, longer repayment terms, and lower monthly payments. Plus, they can be funded in about one week.
Medium-term business loans are great for business owners that want quick capital and are willing to trade for fast approval, lower underwriting guidelines vs SBA 7a but the tradeoff is higher interest rates. Mid-Term loans are also a better choice than Short-Term Loans because for a little more work you can save a lot in financing
If your business has grown past the startup phase, a medium-term loan could be a great option. A medium-term business loan often has a lower APR and longer repayment term ― typically one to five years ― than a short-term business loan. These loans are a good way to finance equipment or growth capital for your business.
Two of the more popular lenders that provide medium-term alternative business loans are Fundation and LendingClub. Each has an easy online business loan application process and can get you funded in around one week.
Fundation is particularly great for businesses with strong EBITDA (growth). Not only that, but it is designed to be veteran friendly, providing better alternative lending options to businesses owned by veterans or family members of veterans. LendingClub is another great option for more established businesses that are looking to borrow larger amounts.
Large banks are starting to get into the mix with offering up to $100K, low doc, application only, medium-term bank loans for business owner with a 700 FICO score or better.
Traditional business term loans are a wide category of business financing, available both from traditional banks and alternative non-bank lenders.
Applying for a Mid-Term Business Loan
The application process for medium-term business loans is completed online through BitX Funding website. You will be prequalify for these loans in a matter of minutes and have the full application for the loan submitted in less than an hour. Approval typically occurs within two to three business days, and funding is generally received in a week.
Documentation requirements for all alternative lending options in this list vary and most have minimal requirements. When applying for a medium-term business loan, the lender will likely require documentation beyond your basic personal and business information. To complete your application, you can expect to turn in personal and business tax returns, bank statements, an income statement, also known as, profit & loss (P&L) statement, and your current balance sheet.
The documents you will need to submit along with your medium-term alternative business loan application are:
If you’ve been in business for more than 2 years, have a credit score of 650 or higher, and generate at least $250,000 in annual revenue, we recommend applying with BitX Funding for your next Mid-Term business loan.
The point of a Mid-Term business loan: to help you finance something big for your business that will require a longer ROI where a Short-Term loan would not support the goal.
Whether you need to make a specific equipment or inventory purchase, want more working capital, need to refinance other business debts, are looking to meet tax or payroll obligations, or something else entirely, a Mid-Term business term loan can help you out.
And as it turns out, there are few loan use restrictions, if any—though it’s best practice to spend that money creating more revenue for your business.
Since borrowing isn’t free, you want to come out of a loan with more money than you began with. It’s all in the planning ahead.
If used the right way, traditional term loans can help you push your business to the next level—introducing new equipment, locations, products, or marketing campaigns into your toolbox.
Plus, remember that a business term loan is predictable.
You should be able to figure out whether a term loan will help or hurt your business from the get-go. Just understand the calculations beforehand and plan the coming months or years of spending carefully.
You should know how much the financing will cost you no matter what type of financing you’re applying for.
Thankfully, the price tag of a business term loan is easy to figure out, and it tends to be affordable.
Let’s look at a cost example.
Example of a Mid-Term Business Loan
Let’s say you’ve qualified for a business term loan.
In this medium-term business loan offer, you’re borrowing $25K from a lender at a 18% interest rate and a 5-year term.
Given the longer length of that traditional term loan, you’ll most likely have a monthly payment of about $634.
That’s a predictable expense you can easily understand and plan your financials around.
Small business term loans, like other business loans, can also come with fees attached to the loan. These fees could be origination fees, packaging fees, prepayment fees, and so on.
Don’t overlook fees on your loan offer—be sure to factor any and all small fees you might have to pay in order to understand the true cost of your loan.
Rates and terms for medium-term alternative business loans vary. The general terms for these types of business loans include loan amounts up to $500,000, APR between 10% to 40%, and repayment terms of one to five years. The lender will likely charge an origination fee between 0% to 9%, and you can expect funding within one week.
The typical rates and terms that you will encounter with a medium-term alternative business loan are:
Example of a $25K, 5-year term Loan, 18% interest rate = $634 a month
Medium-term loans are business loans that are offered by BitX Funding, conventional banks, and alternative lenders. Medium-Term Loans typically possess fixed interest rates and flexible payback terms. Medium-Term loans usually last from one to five years.
Depending on the niche of the loan, you typically have the option to repay in monthly or bi-monthly instalments.
A medium-term loan could be a great solution to fuel up your upcoming or new business project. Finance your business with the amount of funds you need, and they lubricate your business growth if you need a large amount of capital and flexible repayment terms.
And if your small business has been operating for years then you can apply for medium-term loan with good personal credit and a profitable business. It is important to evaluate all the available options to determine the best loan for your business.
So, if you are going to apply for a medium-term loan, let things go the smoother way as Medium-term loans work similarly to short-term business loans and long-term loans. The main difference in medium-term loans falls within the repayment time frame
In addition to the time frame, medium-term loans vary in the interest rates and qualification standards.
If your business is in the need of cash and you are looking to solve business needs, then do not look to far as medium-term loans are a great funding option. Following are the steps to qualify for a medium-term loan,
● Your personal credit score must be in good shape which should generally fall in the 680+ range
● Your business should be profitable in the past and present.
● For some lenders, you might have to put down some collateral. Providing collateral on a medium-term loan is generally an exceptional case because some banks or online lenders acquire it.
● Your business should be operating for at least two years and it should be producing revenue.
Medium-term bank loans typically have a starting interest rates of 10%, while alternative short-term loans have interest rates as high as 30 percent. With a Medium-Term Loan, you can have access to up to $500,000 funds to spike up the growth of your business.
They occupy a sweet spot between short-term loans and long-term SBA 7a loans. As short-term loans aren’t enough to fulfil your business needs or maybe the other way can be a bit expensive for some long-term loans. But it is evidently clear that long-term loans require too much of a commitment.
● Larger and Fully Fledged Loan Amount- You can lubricate your business growth with a significant amount of funds, they usually offer funds up to $500,000.
● Repayment Terms- These loans have flexible repayment terms that usually last from 2-5 years.
● Lower monthly payments- You have a flexible
● Fixed APRs- Interest rates are fixed prior to any contact for medium-term loans.
●Longer Application Process- Medium-term loans ask for more paperwork and possess a longer turnaround than short-term loans. But in contrast to other loan terms specifically, long-term loans medium-term loans are still quick to get.
●Harder to Qualify- Qualification for medium-term loans that differ from lender to lender. And these loans ask for some sort of collateral and alongside there is still a long documentation process for your business to cover.
BitX Funding is your online marketplace for small business loans. From SBA, start-up lines of credit, short-term loans, mid-term loans, invoice financing to merchant cash advances and lines of credit, BitX Funding is where lenders compete for your business. Our top-rated lenders focus on real-life business data and cash flow, which means you can qualify for a loan even if your credit score isn’t perfect. What differentiates us from the competition is that with a brief questionnaire our highly trained loan consultant will listen to your needs and match you with the appropriate funding. You can go at it alone and spend hours online trying to find funding for your business or you can have a one stop experience with BitX Funding and our direct connection with the lenders.