Banks offer many different types of small business financing, but it is often difficult to locate a bank and financing type that is right for you. One of the best types of small business financing that a bank may offer is known as a business term loan. A business term loan is not so much a type of business loan, as it is the definition for the length of time a business loan is fixed or amortized over. Business term loans tend to be short-term in nature (3 months to 5 years), have fixed payments, and are used for working capital, or other immediate capital needs. Banks are a great resource to obtain a business term loan, but where should you start?
Isn’t Bank Financing Hard to Get?
It is generally thought that bank financing is only reserved for the best borrowers with the strongest businesses and the highest credit scores, but this is not always the case. There are many banks that provide affordable and surprisingly fast financing to borrowers with less than perfect credit, or other barriers to financing. Historically, banks aren’t great about publicizing the non-conforming benefits of their business loan programs. For starters, banks don’t want to put out the impression that they aren’t lending to the best borrowers, and their marketing isn’t usually as aggressive as non-bank lenders causing them to be overshadowed in on-line searches.
Locating the Right Bank Business Term Loan
Utilizing a bank term loan provider such as SmartBiz, that has provided over $1 billion in bank financing to small business owners is a great place to start. Because of SmartBiz’s experience and reputation in the small business loan marketplace, it has been able to cultivate relationships with the top bank business term loan lenders that aren’t easily accessible to borrowers. Additionally, SmartBiz utilizes proprietary technology which makes an antiquated bank loan process fast and efficient.
SmartBiz’s bank term loans are a viable short-term financing option for those business owners looking for capital, but who need funds quickly or do not yet meet the eligibility requirements for a longer term SBA loan. Loan proceeds can be used for working capital, debt refinance or equipment purchase. Additionally, SmartBiz has located the banks offering the most flexible guidelines and that can qualify more borrowers. Below is a brief overview of SmartBiz’s bank term loan program:
- Loan sizes from $30,000 to $200,000 nationwide
- 2 to 5 year loan terms
- Fixed interest rates from 6.99% to 26.99%
- No prepayment penalty
- Monthly loan payments
- Funding in as little as 2 business days
- Time in business as short as 2 years
- Business owners must be US citizens or legal permanent residents
- Minimum personal credit score of 640
- No bankruptcies or foreclosures in the last 3 years
- No outstanding tax liens
Another benefit of working with SmartBiz is that in addition to making bank term loans easier to get, it has also streamlined and automated the SBA loan process. SmartBiz offers a simple and fast online application that will help identify whether a bank term loan or a small SBA working capital loan is the best fit for you (getting pre-qualified with SmartBiz will not affect your credit score). Both loan options offer competitive terms and can get you fast access to capital even if you have no hard collateral.
Bank Term Loan Alternative
Unfortunatley, even with SmartBiz’s flexible guidelines and efficient application and approval process, not every business owner will be eligible for a bank term loan. If you are seeking affordable small business financing with bank like terms, then our recommended alternative business term loan lender OnDeck, may be the best fit for you. OnDeck offers easy, lighting fast business term loans, affordable rates, and doesn’t require hard collateral or tax returns. Below is a brief overview of OnDeck’s business term loan program:
- Receive funds in as little as 24 hours
- Term loans from $5,000 to $500,000
- No collateral required
- Rates as low as 9% simple interest
- Terms from 3 to 36 months
- Minimum of 1 year in business
- $100,000 minimum gross annual sales
- 600 preferred minimum credit score (lower considered case-by-case)
- 5+ deposits to your business checking account required each month
- Over 700 eligible industries excluding adult entertainment, drug dispensaries, firearm vendors, government and non-profits, horoscope/fortune telling, gambling/gaming, money services, religious or civic organizations, rooming & boarding houses, vehicle dealers, used goods dealers and auction houses
Applying for a business term loan with OnDeck is simple, the application is short and your credit score will not be affected. Just because you aren’t eligible for a bank term loan, does not mean you can’t quickly obtain affordable capital that can help your business grow.
Bank business term loans offered through a firm like SmartBiz can be an affordable and flexible avenue to quickly access capital for your business. Even borrowers with less than perfect credit scores or other barriers to financing, may still be able to borrow at a cost comparable to an SBA loan but receive funds in as little as 2 business days. Business owners that don’t qualify for a bank term loan can utilize a lender like OnDeck to access fast and affordable business capital. Whether you are eligible for a bank business term loan or an alternative business term loan, knowing that your financing has a fixed rate and a predictable repayment schedule will give you piece of mind.