Small Business Loans: Compare Term Loans for Your Business
A small business term loan provides a lump sum you repay over a set period with regular payments. Banks, credit unions and online lenders offer them with a wide range of amounts, terms and costs, so comparing the total cost is essential.
Common uses
- Business expansion or a second location
- Inventory or supplies
- Hiring and marketing
- Refinancing higher-cost debt
General qualification criteria
| Criteria | General expectation |
|---|---|
| Personal credit | Often 600–700 or higher; stronger credit generally means lower cost |
| Time in business | Commonly 6 months to 2 years, depending on the lender |
| Revenue | Annual or monthly revenue minimums that vary by lender |
| Cash flow | Revenue that comfortably covers payments, often a coverage ratio around 1.25 |
| Collateral | Varies; secured loans may require business assets, unsecured loans often require a personal guarantee |
| Documents | Bank statements, tax returns and financial statements |
These are general, commonly cited guidelines and not guarantees. Each provider sets its own requirements, and meeting them does not ensure approval.
What providers typically look for
- Time in business and annual revenue (minimums vary by lender)
- Personal and business credit profile
- Recent business bank statements and tax returns
- Business formation documents and ID
Requirements vary by provider.
Pros
- Predictable payments
- Fixed amount for a defined purpose
- Wide range of lenders
Cons
- Origination and other fees can add to cost
- Faster options can cost more
- Personal guarantees are common
Compare lenders
Offers SBA loans, term loans and business lines of credit. Compare terms and requirements.
View SmartBiz LoansBusiness funding provider. Submitting its form shares your contact information with the company.
View Big Think CapitalOffers term, SBA, equipment and credit line options. Compare terms and requirements.
View South End CapitalOffers unsecured personal loans and business loans. Personal loans create personal liability, so review rates, fees and terms carefully.
View loan optionsAffiliate links: we may earn a commission if you apply or are approved, at no extra cost to you. Approval is not guaranteed. Review each provider’s terms and fees before accepting an offer.
Related comparisons
Best business loans for startups
Frequently asked questions
What can I use a business term loan for?
Most lenders allow general business purposes. Some restrict uses, so check the loan agreement.
How do I compare offers?
Look at APR, fees, total repayment amount, payment frequency and prepayment terms, not just the interest rate.
Will applying affect my credit?
Some lenders use a soft pull to pre-qualify and a hard pull when you formally apply. Ask before you submit.
Other financing options
SBA Loans · Business Lines of Credit · Equipment Financing · Business Credit Cards
Epic Capital Solutions is not a lender, broker or issuer and does not make credit decisions. Information is general and not financial, legal or tax advice. Rates, fees and terms are set by providers and may change.