Long-Term Business Loans
A fixed amount of capital ideal for funding business growth, refinancing existing debt, or making large purchases like real estate or equipment.
Last updated Dec. 18, 2024
Long-Term Business Loans at a Glance
Loan Term3 to 10 years (sometimes 25)
Interest RatesStarting at ~6%
Funding SpeedAs fast as 1 day
Max AmountUp to $10 million
How much do you need?
No cost to you
Your credit score won't be impacted
Compare multiple lenders with one application
How a Long-Term Business Loan Works
A long-term small business loan is usually characterized as any loan with a repayment period of three to 10 years, occasionally reaching up to a 25-year term (for some SBA loans).
Because they have longer repayment terms, these loans typically have lower interest rates than some other business loans. They are ideal, then, for funding business growth, refinancing existing debt, or making large purchases like real estate or equipment. Although the specifics vary based on the individual product and business lender, long-term loans generally require collateral in some form. You may need to secure the loan with real estate or other physical business assets. If your long-term loan comes in the form of equipment financing, then the equipment itself typically serves as the only physical collateral you need to pledge. Even if a lender doesn’t require collateral, however, it will likely place a UCC lien on your business and/or require you to sign a personal guarantee.
Long-Term vs. Short-Term Business Loans
The most obvious difference between long-term business loans and short-term business loans is the length of the repayment period. But here are some additional points of comparison to consider if you’re wondering which type of loan is a better fit for your business.
Long-Term Business Loans
Best for long-term investments.
Generally requires good or excellent credit.
Generally requires a few years in business.
3- to 10-year term (up to 25 years in some cases).
Monthly payments.
APR starting around 6%.
Short-Term Business Loans
Best for one-off expenses.
Lower credit accepted.
Younger businesses accepted.
3- to 24-month term.
Daily or weekly payments.
APR starting around 10%.
Where to Get a Long-Term Business Loan
SBA Lender
The U.S. Small Business Administration (SBA) partially guarantees a variety of loan types that are designed to encourage SBA lenders to fund small businesses. Lenders that issue SBA loans are often banks (both large and local) and credit unions, but some online lenders also offer SBA loans.
The SBA has a particular set of requirements for business operations, size, and location as well as credit score, time in business, and revenue requirements. It also stipulates that to be eligible to apply, you must first have tried and failed to secure funding from other sources.
An SBA loan of any term length is one of the toughest business loans to qualify for—but don’t let that discourage you! If you can meet the qualification standards of an SBA lender, this will be one of your strongest long-term loan options.
Bank or Credit Union
Traditionally, banks and credit unions have been the go-to lenders for small business loans. They remain one of your strongest lender options, particularly for a long-term business loan.
While these lenders have strict qualification standards (typically, a personal credit score of 700+, a minimum of two to three years in business, and at least $100,000 in annual revenue), their reward for passing those qualifications are the most competitive interest rates on the market and long repayment terms.
You’re even more likely to get a great deal on rates and terms from a bank or credit union if you already bank with the institution, so a great place to start your long-term business loan search is the bank where you have an active personal or business account.
Online Lender
If you’re struggling to qualify for a loan from a bank, credit union, and SBA lender—or if you’re unable to wait the weeks to months it can take to receive funding from those lenders—then an online or alternative lender can likely help you with a long-term loan. These lenders often have more flexible eligibility requirements and can be an option for startup businesses or those looking for bad credit business loans.
Online lenders can often tell you within hours of applying whether you qualify for a loan, and once you sign an agreement, they’ll typically fund your account within two to three business days (sometimes faster).
Of course, you’ll pay for the convenience of a speedy approval and funding process alongside more flexible qualification requirements with interest rates that tend to be much higher—sometimes up to 99%—than those charged by SBA lenders and banks.
When to Consider a Short-Term Business Loan
A long-term business loan has many applications, including:
- Expanding your business.
- Purchasing real estate or vehicles.
- Financing business equipment.
- Hiring staff.
- Refinancing debt.
Qualifying and Applying for a Long-Term Business Loan
Once you’ve determined you have a business need for financing and that a long-term loan is the best type of loan to fit that need, you’ll want to get a clear understanding of your qualifications.
Most lenders will focus on a few key factors in addition to your business financials: your personal credit score, how long you’ve been in business, and your average annual revenue. It’s helpful to know where you stand on each of those factors before you begin comparing loans and lenders.
Once you’ve narrowed your search to a few lenders with requirements you can meet, it will be helpful to gather some info and documents that most lenders will require during the application process:
- Basic personal and business information, including an ID, business check, proof of business ownership, etc.
- Personal and business bank statements.
- Business financial statements.
- Personal and business tax returns.
- Credit score.
At this point, you’re ready to apply for a business loan. You’ve got this! (But if you want some help…)
Fundera Is Here for You
We partner with SBA lenders and online lenders that offer long-term business loans.
You can answer these few questions—with no impact to your credit score and free of obligation—to see which long-term loans you qualify for. One of our trained sales associates will personally advise you through the entire loan process, from comparing options to signing your agreement.
Let’s get you funded!
How much do you need?
No cost to you
Your credit score won't be impacted
Compare multiple lenders with one application