The 5 Best Long Term Business Loan Companies
If you're running a business and need some extra capital, you might turn to a long-term business loan. A long-term business loan has a term of at least 5 years but can run as long as 10 or 20 years. Because long-term loans are spread across a much longer period of time, the monthly repayments are a lot lower than for short-term loans. This makes a long-term loan a good choice if you're looking to expand, make a large investment, or need a big lump sum to fund major business strategy.
APR rates on long-term business loans average around 5.5% to 30% from online lenders, which is slightly lower than for short-term loans. The best long term business loans are great for well-established, small businesses with a good amount of collateral. The most appropriate situations for getting a long term business loan include construction, large investments like heavy machinery, working capital, or taking over an existing business, and major capital improvements. However, if you’re using a long-term business loan to finance the purchase of machinery and equipment, you should consider carefully the cost of depreciation and compare that to leasing.
What to Look for When Choosing a Long Term Business Loan
- Flexible rates: When you’re shopping for the best long-term business loan, you want as much flexibility as possible along with good interest rates. Beware of unscrupulous loan providers who hide their extremely high interest rates by highlighting the monthly payment amounts. Because spreading your payment out across a longer period of time brings down each monthly payment, you might not notice that the total amount of interest you pay across the entire term of the loan is overly high.
- Read the small print: As with all business loan lenders and aggregators, it’s important to read the small print to check whether the interest rates are fixed, variable, or change after a certain period of time, hidden fees and extra charges like origination charges, personal check processing charges, and late payment charges. The best long term business loans will have some flexibility in the timing of your payments each month and early repayment.
The 5 Best Long-Term Business Loan Providers:
- Borrow from $2,000 to $100,000
- APR from 5%
- Three months to 15 years
LendingTree is a leading loan provider marketplace which connects businesses in need of a loan with reputable lenders. Since it's a marketplace rather than a direct lender, LendingTree can't say exactly what your APR rates will be; those will be determined by the final lender. The advantage of using LendingTree is that by completing just one application, you'll be able to access loan offers from a number of different lenders. Applying is done online with a basic questionnaire about your business history and financial stability, with applicants receiving initial pre-approved offers within a few minutes before going on to complete the application process with the lender directly.
LendingTree connects you to a range of possible lenders, so you can choose between different options. There’s no fee to arrange the loan and no minimum credit score. Businesses with a range of years in business and credit standing can succeed because credit score and business history requirements vary between different lenders. However, all applicants need to have been in business for at least 12 months and have $8,000 or more in monthly revenue.
- Borrow from $1,000 to over $1,000,000
- APR from 5% to 30%
- Loan term from one month to 5 years
Lendio is a loan aggregator that provides pre-approved loans from its stable of over 75 trusted lenders to businesses of all sizes. It's hard to say what your APR rates will be since they are determined by the direct lender. Lendio has one of the lowest requirements for long term business loans since it only asks for six months in business, and has very high standards of customer service.
To apply to Lendio, you'll complete a simple online questionnaire that matches you to a loan provider who'll then ask you for a more detailed application. You'll usually need to show a signed loan application, six months of business statements, and a mortgage or landlord verification, if relevant. There's no minimum credit score, but you do need to show average monthly revenue of over $10,000 for the past six months. There are fees for the loan, but those are set by the individual lender.
- Borrow from $5,000 to $575,000
- APR rates are not listed
- Repayment terms are not listed
Torro is a loan provider marketplace which helps old and new businesses find funding for a whole variety of purposes. It’s particularly supportive of startups and new businesses that are looking for startup capital as well as established businesses that are looking to expand. Torro connects businesses to a wide range of lenders which increases the chances of successfully finding funding. To apply to Torro online, you'll just be asked for your basic personal and business details, monthly gross revenue, and monthly credit sales, if relevant. You’ll then receive an email from Torro suggesting suitable lenders and you can carry on the application process with a lender directly once you’ve chosen which suits you best.
Torro’s fees are all levied by the loan provider, so they’ll vary depending on who you borrow from. Unlike most lending marketplaces, Torro doesn’t have a fixed set of requirements because it depends on which lender you go with. There's no minimum time in business or credit standing, but you will be asked to show an average monthly revenue of $15,000.
- Borrow from $5,000 to over $1,000,000
- APR rates are not listed
- Multiple term options which aren’t listed on the site
Leaders Funding is a direct online loan provider which specializes in offering business loans and merchant cash advances backed up to new and old businesses. The biggest pro to Leaders Funding is its flexibility in responding to every business’ situation with appropriate rates and term offers along with its fast turnaround in providing the funding. You can apply to Leaders Funding over the phone or online using the short and simple application form which has just seven questions, although you’ll be asked for more details and documents further along in the process.
Because Leaders Funding has so much flexibility, it doesn’t display its average APR rates or repayment terms on the website, although it does promise to keep interest rates as low as possible and offer a range of term options. To qualify for a loan through Leaders Funding, you'll need to have been in business for at least 12 months and have an average monthly revenue of $10,000, although there is no minimum credit rating.
- Borrow between $5,000 to $350,000
- APR rates from 7% to 30%
- Term is up to 25 years depending on the purpose of the loan
Lendza works as a bridge between small businesses looking for funding and loan providers. Using Lendza has the advantage of helping small businesses to access multiple serious lenders who provide many different business loan options with one application form. You can choose your type of business loan from business line of credit, merchant cash advances, startup loans, or traditional business loans of varying lengths. To apply to Lendza, fill in the short online application with your personal and basic business details. Lendza matches the applicant to appropriate providers who then get in touch directly and continue your application process.
Because Lendza isn’t a direct lender, it doesn’t directly charge any fees. But, the actual loan provider could charge you various fees, so borrowers need to be aware of this possibility. Your payment schedule is also determined directly by your lender. To apply for a loan through Lendza, you need to have been in business for at least 12 months and have an average of $12,000 or more in revenue each month, although different loan providers will have different specific requirements. There's usually no minimum credit requirement.
Long-term business loans can be the best way to free up capital for large investments or purchasing equipment. Each of the five loan providers we’ve reviewed here can offer you competitive and flexible long term business loans.