Yes, the SBA offers loan terms ranging from 10 to 25 years. The 10-year loan term is more commonly seen when financing working capital expenses while the 25-year loan term is typically reserved for fixed assets, like real estate.
$5,000,000
11.5% variable, 13.5% fixed*
Up to 300 months
The SBA (7)a loan is a form of general business financing offered by the Small Business Administration (SBA). It can be used for anything from covering working capital costs to purchasing equipment or refinancing debt. That flexibility, plus its capped interest rates and high maximum loan amount, make it a popular choice among business owners, especially those who may not be able to qualify for a traditional bank loan.
Still, these loans are not the right fit for everyone. Not all businesses can qualify for SBA funding and the Administration’s approval and funding times can be much longer than what you might expect directly from a bank or online lender.
Read our full SBA (7)a loan review.
In order to qualify, you’ll need to meet the SBA’s criteria of:
$5,500,000
Approximately 3.00% of the loan amount
Up to 300 months
If you’re looking for a commercial loan, you may want to consider the SBA CDC/504 loan. Although this loan can only be used to build, purchase or improve major fixed assets – meaning mainly real estate and large equipment – it has a lot of benefits. For one, the interest rate is typically only equal to 3.00% of the loan amount. For another, its available loan amount extends to $5,500,000.
That said, like the SBA (7)a loan, the SBA CDC/504 loan has its limitations. Loan approval and funding times are long. Plus, only certain types of businesses are eligible for this financing.
Read our full SBA CDC/504 loan review.
In order to qualify, you’ll need to meet the SBA’s criteria of:
$100,001+
Not disclosed
24 to 84 months
As a rule of thumb, you might be able to qualify for a larger loan amount if you’re okay with the idea of using collateral to secure your loan. PNC Bank’s secured loans are no exception. Its secured loan amounts start at over $100,000 and generally require equipment or real estate as collateral. Plus, the lender boasts physical branches for those who prefer an in-person element to their lending experience.
However, as a traditional bank lender, PNC might have stricter eligibility criteria than alternative lenders. What’s more, PNC isn’t very transparent about its qualifying requirements, so it can be hard to tell if you’re a good fit.
In order to qualify, you’ll need to meet PNC Bank’s criteria of:
$25,000 to $500,000
7.49%
6 to 84 months
Funding Circle’s standout benefit is its fast funding. Borrowers can receive financing in as little as two business days. In addition, the lender provides every applicant with a dedicated account manager, who can answer your questions and assist you through the application process.
Yet, it has a longer time-in-business requirement than some other lenders on this list and it doesn’t disclose its annual revenue requirements, which means it may not be a good fit for some borrowers. Not to mention that its maximum loan amount is much lower than some of our other lender picks, and it requires a blanket lien.
Read our full Funding Circle business loan review.
In order to qualify, you’ll need to meet Funding Circle’s criteria of:
Up to $5,000,000
4.99%
12 to 300 months
iAdvance Now is one of the only lenders on this list to offer the opportunity to prequalify for one of its loans, which means you can see what business loan interest rate you qualify for without harming your credit score. Plus, if you have a high score, this lender offers affordable interest rates on loan amounts up to $5,000,000.
But, at the same time, its minimum annual revenue requirement is fairly high at $240,000 and its minimum time in business requirement extends to two years. Together, this means that iAdvance Now is likely only going to be a fit for established businesses. Additionally, the lender may charge an origination fee, which can add to your total costs.
In order to qualify, you’ll need to meet iAdvance Now’s criteria of:
$5,000 to $250,000
8.49%
12 to 60 months
Accion Opportunity Fund could be a smart pick for minority entrepreneurs. This nonprofit lender offers startup loans at affordable rates, as well as business coaching and mentoring services to help business owners get their projects off the ground. As a result, its eligibility requirements are much more lenient than you might find with a traditional lender.
Since the fund is dedicated to upending racial and gender inequities in business, it’s likely going to be a good choice for minority entrepreneurs. However, since it’s geared toward those who are just starting out, you may not be able to access as much funding as you may find elsewhere.
In order to qualify, you’ll need to meet Accion Opportunity Fund’s criteria of:
$20,000 to $500,000
8.49%
Up to 144 months
For businesses that can meet the lender’s eligibility requirements, BHG Money has plenty of benefits. Its interest rate is fairly affordable and its loan terms extend all the way to 12 years. What’s more, you don’t have to put up any personal collateral to secure the loan, so you won’t be on the hook for repayment if your business defaults.
With that in mind, though, BHG Money is likely going to be the best fit for established businesses. At $1 million, its annual revenue requirement is pretty high and you have to have been in business for at least two years.
In order to qualify, you’ll need to meet BHG Money’s criteria of:
Once you have a few small business loan offers in hand, make sure you’re using similar metrics to compare them against one another. Here’s a look at what to consider:
Even a one-point difference in an interest rate can make a huge impact on how much you’ll pay.
For example, if you take out a $50,000 business loan with a 10-year repayment term, a 14% interest rate will cost you $31 less each month and $3,642 less over the life of the loan than a 15% interest rate.
Plus, if you can afford to put some extra money toward your loan each month, you’ll be able to pay it off much faster and save even more. For this example, if you put that additional $31 a month towards the 14% loan, you’d pay it off 9 months early and save an additional $3,921.
All numbers are rounded to the nearest dollar.
| 15% Interest Rate | 14% Interest Rate | 14% Interest Rate With Additional Payments | |
|---|---|---|---|
| Monthly Payment | $807 | $776 | $807 |
| Total Interest Charges | $46,802 | $43,160 | $39,239 |
| Total Repayment | $96,802 | $93,160 | $89,239 |
| Time to pay off loan | 10 years | 10 years | 9 years and 3 months |
| Pros | Cons |
|---|---|
Unlike short-term business loans, long-term loans tend to have monthly repayment schedules, which can be easy to budget around. The required payments on long-term loans tend to be smaller than short-term loans. Choosing a term loan can help you build credit over time. | You’ll likely pay more interest over the life of the loan than you would on a loan with a shorter repayment term. Due to their length, the eligibility requirements for long-term loans may be more stringent than other types of business funding. The funding times on long-term loans may be longer than with other forms of lending. |
Yes, the SBA offers loan terms ranging from 10 to 25 years. The 10-year loan term is more commonly seen when financing working capital expenses while the 25-year loan term is typically reserved for fixed assets, like real estate.
The biggest benefit of long-term loans is that they can help you keep your monthly payment amount low by allowing you to spread the cost out over time. This can be especially helpful when you need to purchase expensive assets, like property, vehicles or machinery.