Long-Term Business Loans

How a Long-Term Loan Works

Long-term loans are the traditional choice for businesses, offering predictable payments over a longer period, typically up to 10 years. These secured loans require collateral, providing the lender with added security. Business owners use long-term loans for various purposes, such as building credit, strengthening their financial foundation, or preparing for uncertain times.

Once approved, the loan is deposited into the business's checking account, and the company repays the loan amount plus interest over the agreed-upon term. This stable financing option helps businesses achieve long-term goals, invest in growth, and weather financial storms.

Qualifications

  • Minimum Credit Score: 650 (or equivalent) to ensure the borrower has a strong credit history and ability to repay the loan.

  • Business Age: At least 2 years (or 3 years) in operation to demonstrate stability, growth, and a proven track record.

  • Annual Revenue: Minimum of $250,000 (or $500,000) to show sufficient income to support loan repayment over an extended period.

  • Debt-to-Equity Ratio: A ratio of 1:1 or less (or 3:2 or less) to ensure the business has a healthy balance of debt and equity.

  • Cash Flow Coverage: A minimum of 1.25 (or 1.5) times the loan payments to ensure the business has sufficient cash flow to cover loan repayments.