Business Term Loans: How to Get the Best Rates

A perfect credit score can’t hurt. But, there are other ways you can get the best rates on business term loans. Here’s one: consider working with a direct lender such as Fast Business Financial. Cut out “the middleman” and secure some of the best rates and terms by working with our financing experts!

“So, What Exactly is a Business Term Loan?”

It’s the “financing tool that built the nation.” A business term loan is quite possibly the longest-standing form of business financing in the world. Before there were bond markets — and possibly even brick-and-mortar banks — there were term loans.

A term loan essentially has two components: A set term (period of time) and a fixed interest rate over the length of the term. If you’ve ever financed a car, mortgage, or taken out a loan to pay for college then you’ve most likely encountered a term loan in the past. Of course, business term loans are much different than a predatory student loan you may have had (or more likely, continue to have).

The key features of a term loan generally include:

  • A lump sum
  • A fixed term (typically one to five years)
  • Regular repayment schedule (monthly, bi-weekly, etc.)

Why do term loans still remain popular among small businesses owners when there are other options available, such as SBA loans, short-term loans, revenue-based loans, unsecured business loans, and other non-traditional business loans.  Read on to find out.

Our Current Rates and Terms

By cutting out the brokerages, bankers, and all the non-essentials of lending, Fast Business Financial can help you get the best rates on business term loans.

Borrow from Terms Annual Percentage Rates (APR)
$25,000 to $1,000,000 1 year to 5 years 7% to 30%

When it comes time to tap into business financing to accelerate the growth of your operation, the direct lenders at Fast Business Financial are here to help. We offer conventional term loans for small businesses, as well as non-traditional business loans such as revenue-based business loans and unsecured business loans.

Reasons to Consider a Business Term Loan

With a business term loan, much of the anxiety and uncertainty of repaying the loan is wiped away. Term loans are the most predictable borrowing option. And, when applied the right way, a term loan can be one of the best decisions a business can ever make in investing in their own success.

Below, we’ve listed some of the top reasons a business owner might want to take a closer look at this perennial favorite of financing.

? Better interest rates.

Since term loans have an extended repayment period, you can expect better interest rates compared to other popular loan options, such as short-term loans and especially cash advances.

? Easy application process.

Applying for a term loan is a quick, stress-free process. With Fast Business Financial, the process is even faster. When you apply for a business term loan with Fast Business Financial, you will know within minutes whether you’ve been approved. (Compare this to the weeks or months you might have to wait to learn the status of your application through a traditional bank.) Fast Business Financial can approve and fund your loan in as little as 24 hours. How’s that for fast and easy?

? Receive funds in one lump sum.

Let’s assume you are a business owner. You are looking to take out a loan to finance equipment purchases and cover marketing expenditures. So, you are looking at several large investments. A business line of credit could theoretically perform the same function, but do you really want the bank calling every time you make a sizable withdrawal from your line of credit? By comparison, a business term loan is delivered in one large sum, allowing you to reinvest in your business right away.

? Structured payments.

There’s enough uncertainty in business to worry about whether your loan will include a balloon payment at the tail-end of the loan, or whether your rates will increase. With a business term loan everything is set in advance. The payments are structured, predictable, and easy to manage.

Get Funded Fast

How fast? How about next-day fast? When you apply for a business term loan through Fast Business Financial, you can get approved and funded for a business term loan just 24 hours. Now that’s fast!

Weighing the Pros and Cons

There’s “give and take” with every type of business loan. Here are some of the unique advantages and disadvantages that come with small business term loans:


  • No surprises. With business term loans, the repayment structure is set in advance, so you won’t have to worry about any surprises when it comes to making payments.
  • Easy monthly payments. The amount you pay each month to repay your term loan is fixed. And, compared to short-term loans, your monthly payments will likely be less.
  • Ideal term lengths. Term loans for small business entities strike that nice middle ground between short- and long-term loans. These are short enough to not fall victim to excess interest payments, yet long enough that repaying the loan will not be burdensome.
  • Can be used for a range of business purposes. While most businesses use term loans to invest in large, one-off investments, business term loans can be applied to virtually any kind of business activity.


  • Penalties for early payments. Since lenders expect a certain amount of interest to be paid on term loans, your agreement may include language on prepayment penalties. Check the agreement to avoid early payment penalties.
  • You may pay more in interest. These loans usually have a lower interest rate than short-term loans, but you may end up paying more in interest since term loans are generally longer in duration. Do the math before signing the loan agreement.

Keep in mind that a business term loan can vary from lender to lender. The length of the term, the sum, and interest rate you are offered will be heavily influenced by your time in business, historical revenues, and borrowing history. And, since this type of loan is repaid for a longer period than, say… a short-term business loan, your FICO® score will factor heavily into your interest rate. Working with a direct lender may be a better option for term loans as they pay more attention to revenue growth than just credit score metrics.

Need help deciding which type of loan will work best for your business goals? Call Fast Business Financial. Our lending specialists have an encyclopedic knowledge of all the loan options out there (even non-traditional loans and revenue-based business loans). When you’re ready, you can apply online for rapid financing through Fast Business Financial. The process is fast and easy.

How to Qualify for a Term Loan

When you apply for a term loan for your small business, there are a few things lenders want to see in your portfolio. Knowing in advance what lenders look for in deciding credit applications can help you secure favorable rates and terms. Here are a few of the top loan qualifiers:

Credit score. Yes, with virtually any type of loan, the lender wants to be certain that you can repay it, and past borrowing history is a fairly accurate indicator of determining how smart a borrower is with their money and how likely they are to repay the loan. There are several basic components of a FICO® score. These include your borrowing and repayment history, utilization of revolving credit, as well as the duration and type of any outstanding loans you may have (this includes business and personal loans).

Direct lenders such as Fast Business Financial are more forgiving when it comes to FICO® scores. By and large, we want to see that your business has revenue increases each year. So, even if you have bad credit, business loans through a direct lender can still be viable options in building working capital.

Business longevity. No matter how great a business looks on paper, no one can predict how successful a business will be until it becomes established — and that means putting your business plan to the test and allowing the market to decide where your business fits in the grand scheme of things.

Solid revenue growth. Lenders want to make sure they aren’t “watering rocks.” As they look through your loan application they want to see solid gains in terms of profits and revenue. A business that brings in money is a business that can cover its loans. For your application to be taken seriously, traditional banks want to see annual revenues of at least $300,000.

If you do not qualify for this type of loan due to the limited time you’ve been in business, a short-term business loan might provide you with the working capital necessary fuel your business’ growth.

Need Financing… and FAST?

When you apply for working capital through Fast Business Financial, you will know within moments whether your loan application has been approved. And, in most instances, businesses can apply and tap into working capital within 48 hours.

Apply Now

What We Look for in a Borrower

Fast Business Financial assesses applications on a case-by-case basis. In general, there are some factors we want to see before we approve an application. Most applicants approved for a term loan will have the following:

Revenues Year Established Credit Score
$180,000 (or more) in annual revenue Over two years (or more) in business 600 or higher

Please note: we may still be able to help you if you currently fall short of one or more of these general qualifiers. Contact us for more details.

Business Term Loans vs. Lines of Credit

Many business owners find themselves choosing between business term loans and lines of credit. If you’re in a similar situation, we have an analogy that might help you decide which is the better borrowing option for you. You can call this the “couch analogy” (bear with us for a moment).

A couch has a few basic components. There is the frame which gives the couch support and makes it a functional piece of furniture, then there are the cushions. Cushions don’t make it a couch, they make it comfortable. Are you catching on yet?

Business lines of credit should never be used to build a business; they exist to make a business operate more comfortably.

In case we lost you with that analogy, let’s summarize:

  • Choose a business term loan when you need working capital to make large investments essential to your operation (property, machinery, vehicles, etc.)
  • Choose a line of credit to give your business a cushion against unexpected financial shortages (covering payroll, replenishing stock, etc.)

Go with a Direct Lender and Cut Out the Middleman

You may enjoy the complimentary hard candies and lukewarm coffee at your local bank, but here’s why you should consider working with a direct lender. Direct lenders offer a better borrowing climate for small businesses. By skipping “the middleman,” we can offer rates and terms that are more in tune with the everyday realities of running a small business. And, direct lenders give you the option to explore non-traditional borrowing options such as revenue-based financing.

At FBF, we cut out the brokers, bankers, and all the non-essential features that do nothing but add to the cost of getting a loan. This ensures ensuring clients receive some of the most competitive rates and terms. We’re fast, too. In most instances, we can process your application and make funds available in as little as 24 hours.

Ready to grow your business?

Get the funding you need, today!