Term loans are one of the most common types of business financing options. However, just because they’re popular doesn’t mean that everyone understands how they work. If you’re trying to figure out what type of loan is right for you and your business, our team at TB Capital Partners is ready to offer clarity and support throughout the process.
Below, we’ve responded to some frequently asked questions about term loans, providing additional clarity for anyone who’s thinking about applying for a term loan. If you have any more questions for our team, please don’t hesitate to contact us today.
- How do term loans work? Term loans are simpler than many other business financing options. With a term loan, you are paid a lump sum agreed upon in the details of the loan. Then, you pay off the loan for a set length of time with predetermined payments. You can often lower the amount of interest you pay if you make higher payments than what is required.
- What are they used for? While some types of business loans are for specific purposes, term loans can be used towards a wide range of purposes, including initial business startup expenses, equipment costs, and even payroll.
- How long do term loans cover? The details of each term loan can vary greatly from one business owner to the next. For instance, some term loans can be as short as six months, whereas others may be paid out over several years. The length of your loan will depend on the amount you need to borrow, your credit score, your predicted income, and other factors.
Business financing can often be difficult, and selecting the right type of loan can be overwhelming to handle on your own. If you have any questions about the process or would like to learn about other options available to you, please call us today to discover how we can support your small business.