The best long-term business loans will offer flexible repayment terms and competitive interest rates. These business loans can give you the cash on hand needed to grow your business and invest in success. Long-term business loans can be utilized for various business-related expenses and often offer lower monthly repayments and longer repayments terms than short-term business loans. Nonetheless, they might also be more challenging to qualify for. Even though you have bad credit, there are still various loan options available. When applying for a long-term business loan, you should consider multiple lenders to find the best deal.
Five best long-term business loans
If you have a profitable business and great credit, it is definitely worth turning to a bank for a long-term business loan. Banks across the country provide long-term financing; however, it can help to start with your local community bank. Local bankers understand their local economies well and might be on familiar terms with local small business owners. Provided you already have a relationship with your local bank, then they may be more inclined to trust you with a business loan. On the contrary, however, if you do not already have a relationship with a bank in place, you might consider Wells Fargo for long-term business loans.
Wells Fargo is an incredible small business-friendly bank- providing a variety of different loan products- the inclusion of traditional term loans and SBA loans. You might mainly consider their Advancing Term Loan, which provides $100,000 to $500,000 to be applied as working capital. This business loan is secured by your business assets and offers you up to a one -year draw (similar to a business line of credit), after which time the balance changes into a five-year term loan. Even though Wells Fargo does not specify the interest rates on this loan, their website does mention that rates on the unsecured loans begin at seven-percent, and vehicle loans begin a 5.5-percent- which offers you some insight into the kinds of prices you will see.
With that being said, as a bank lender, Wells Fargo will need you to meet top qualifications to access this financing. You will need to have at least two years in business, strong business financials, and a high credit score to qualif Though, all in all, Wells Fargo will be one of the best options for long-term business loans from the bank- providing the most affordable rates for highly qualified applicants.
Even though some businesses may be able to qualify for a bank loan, most will prefer the speed and less strict requirements of an alternative lender- in which case, you will want to begin with the next option on this list- Funding Circle. Of all the online lenders in the market today, Funding Circle can provide terms and rates similar to a bank; however, with the streamed processes, alternative lenders are known for:
- Repayment: Monthly
- Origination fee: 3.49 to 6.99 percent
- Interest rates: 4.99 to 22.99 percent
- Terms: Six months to five years
- Loan amounts: ranging from $25,000 to $500,000
Besides, Funding Circle can approve loans and send out an offer of less than one business day after all documents are received. On average, entrepreneurs and business owners get their loans within five days. Moreover, you can complete the application process online- and Funding Circle does not charge a prepayment penalty. With that being said, to be eligible for a long-term business loan from Funding Circle, you must have:
- Two years in business
- A personal credit score of not less than 620 or more (660 for sole props)
Contrarily to some other online lenders, Funding Circle does not have a minimum annual revenue qualification; however, if your business is profitable, you will be more likely to be accepted. Typically, Funding Circle is a great option for businesses looking for long-term and affordability, but do not want to wait or can not qualify for a bank loan.
With Fundation, you will find slightly higher interest rates and shorter terms; nonetheless, they have more flexible terms of business loan requirements. With that being said, Fundation provides long-term business loans with:
- from $20,000 to $ 500,000Repayment: Bimonthly
- Origination fee: Up to 5-percent
- Interest rates: 8-percent to 30-percent APR
- Terms: One to four years
- Loan amounts: ranges
Similar to Funding Circle, you can apply for a Fundation loan faster and easily and receive funding in less than one day and as many as thirty days. On average, Fundation funds businesses within five years. To qualify for a Fundation loan, you will require:
- At least two years in business
- A minimum of $100,000 in annual revenue
- A personal credit score of at least 600
- At least three employees (you can include yourself in this count).
- Generally, a business bank account with a minimum average bank balance of $2,000.
As you can see, with Fundation, the minimum credit score requirement is slightly less than Fundation’s, so even though they do not necessarily provide long-term business loans for bad credit, they certainly offer them for average credit. Generally, Fundation is a worthwhile online lender for long-term loans, mainly if your credit score is closer to 600. On the contrary, however, with a minimum qualification of three employees working at the business, Fundation may not be an ideal option for smaller businesses.
Opportunity Fund is somewhat different from Funding Circle and Fundation. Opportunity Fund (who also works with Lending Club) is a microlender that strives to provide long-term business loans to underserved entrepreneurs- including minorities in low-income communities and women. As a mission-focused microlender, Opportunity Fund will have more worthwhile options for various businesses.
- Opportunity Fund can offer:
- Repayment: Monthly
- Origination fee: 5.99 percent
- Interest rates: 5.9 to 29.5 percent
- Terms: One to five
- Loan amounts: ranging from $2,600 to $250,000
To begin the loan application process, you can call the Opportunity Fund directly, and you will work with a dedicated advisor to get everything in order. Typically, the Opportunity Fund can fund businesses in three to five days. To qualify for one of these long-term small business loans, you will need:
- One year in business
- $50,000 in annual revenue
Opportunity Fund does not come with a minimum credit score qualification and will possibly weigh your business financials over your credit, mainly if your credit is not great. Nonetheless, as we mentioned above, there are some restrictions linked to this microlender; they only work with businesses in particular states and industries- and thus, they may not be an option for everybody. If you can apply with Opportunity Fund, though, you will find that they can offer the closest option to long-term business loans for bad credit (more so than even Fundation), together with long-term business loans for a startup business.
Lastly, you might consider Credibility Capital as one of your best options for long-term small business loans. As one of the online lenders in this list, they provide terms on the shorter side: nonetheless, their business financing product is still very competitive with those we have discussed so far. Overall, Credibility can offer:
- Terms: One to three years
- Loan amounts: $25,000 to $350,000
- Repayment: Monthly
- Origination fee: starts at 3 percent
- Interest rates: 8 to 20 percent
Like many other options that we have reviewed, Credibility’s process is based online, enabling you to complete the loan application faster and quickly. Besides, Credibility has no prepayment penalty- they also allow you to use one of their loans to refinance existing debt. To be eligible for a long-term loan from Credibility Capital, you will need:
- To be currency generating revenue
- Strong personal credit
- Two years in business
Generally, these qualifications are somewhat vague- and thus, you may have some flexibility in qualifying with Credibility. For instance, if you have strong credit; however, your annual revenue is on the lower side, you might still be eligible. With that being said, generally, Credibility offers long-term business loans that are affordable and fast. Even so, you will want to bear in mind that the shorter terms of one to three years indicate, in comparison to some of our other options, your monthly payments will be on the higher side.
Generally, if you are looking to fund a larger financial need- such as a renovation, real estate investing, equipment purchase or debt refinancing- you will want to turn to a long-term business loan to fulfill your business need. Whether you get the loans from an alternative lender or a bank, they will be some of the most affordable options out there- besides, you will be able to pay back your debt over a lengthy period.
Of course, as we have outlined in some of the best options above, long-term small business loans might be challenging to qualify for, mainly for businesses with bad credit and startups. If you cannot access an SBA or a bank loan, you will want to look into some of the online lenders we have reviewed. On the other hand, if you can not qualify for any of these long-term business loan options, you might explore other business financing, such as asset-based financing, lines of credit, and short-term loans.