A long-term business loan is the best option when you decide to expand your business or make a significant investment. Long-term business loans are available from online lenders and banks, with three to 10 years of repayment terms. But they can also go for 25 years.
The benefits of long-term business loans include more time to repay the borrowed amount and lower monthly repayments than short-term business loans. But, the challenge here is that it is challenging to qualify for such loans. Because you need an established business and strong finances.
A Short Overview of Long-Term Business Loans
A long-term business loan is a business financing option for an established business that needs capital. The best thing about these loans is their low-interest rates. These loans are appealing to most companies looking to invest in their business that will provide a great return over a long period.
The approval process for long-term business loans is convenient and straightforward. There are different types of loans available, but getting the right kind of loan will help you meet your business goals.
Similarly, if you contact the right company for the loans, they can also advise you on the best. BitX Funding is one of the best companies that offer these loans to their customers.
So, let’s jump right into and explore the types of long-term business loans.
Small Business Administration Loans
Small Business Administration Loans are perfect because of the market’s lowest rates and most extended repayment terms. Different banks and other online lenders offer these loans, and you have to qualify to get approval for them. You can get these loans for up to $5 million, and the typical repayment terms are also long for these loans.
For instance, the repayment term for working capital and equipment is ten years, while for significant assets like land and facilities, the repayment period is 25 years. These loans provide ease to the businessman as they have considerable time to pay back the loan amount, and they can focus on their business during this duration.
How can you Qualify for SBA loans?
SBA loans require that the business should have spent at least two years in the market and have solid annual revenue. Usually, you will also need an excellent personal credit score of 690 or higher. But, in some cases, the lender can ask you for the collateral.
Moreover, SBA loans also offer microloans distributed through nonprofit community institutions. These institutions work with underserved business owners, such as women and minority business owners.
Microloans have a term of up to six years, but they are available in amounts of up to $50,000, which is not ideal and perfect funding for large business projects.
Bank Loans
When you get a loan from traditional lenders, the repayment terms for long-term business loans are usually five to seven years. Banks offer lower interest rates, but your exact rate depends on your qualifications.
You can also apply for long-term business loans at your credit union and community bank, apart from the big banks.
How to qualify for Bank Loans?
You must have an established business with solid annual revenue to qualify for these loans. Moreover, it would be best to have a personal credit score to get a long-term business loan at a competitive rate. Some banks also require collateral.
Alternative Business Loans
If you cannot qualify for the SBA or bank loans and need fast funding for your business, you can consider getting long-term loans from alternative lenders. Furthermore, you can also contact some online lenders for this.
Many companies provide you with loans. Whether you choose online lenders or any other bank for the loans, the repayment terms are up to five years.
How to qualify for these loans?
Online lenders have fewer requirements than banks. When you take loans from an online lender, you don’t need to meet the minimum annual revenue to qualify, and credit score requirements may not be as high.
Some lenders can ask you for a personal guarantee but won’t require it when you are out your physical collateral on loan.
So, these are the major types of long-term business loans.
Reasons for Choosing Long-Term Business Loans
If you are looking for the reasons why you should take these loans, then the following are the main reasons;
Term Length
The term length for these loans is from three to ten years, but this can be up to 25 years in some cases.
Repayment Schedule
The repayment method is usually monthly repayment installments.
Borrower Requirements
It needs solid annual revenue, multiple years in business, and good credit history to qualify for the loans.
Funding Speed
This varies from lender to lender. Banks and SBA loans are slow to fund, but online lenders can offer capital in a few days.
Best For
Long-term business loans are best if you want to purchase equipment or real estate, renovate your business, expand your business to new locations, cover cash flow, and hire new employees for your company.
A Quick Wrap-Up!
To sum up all the discussion, we can say that long-term business loans are the perfect option when you need a large amount of funding. But, you should keep in mind that you should contact professionals for this. BitX Funding is a well-established financing company that offers these loans to clients. Moreover, our financial experts give advice and suggest the best loans that suit your business. In this way, you can fulfill your business requirements and meet the needs of your business.
