The term “long term business loan” refers to a lump sum of money provided to a business that then uses the capital for a business opportunity purpose. Such purposes may include working capital, equipment purchases, business expansion or renovation, and an abundance of other business needs. Business owners rely on funding options to fuel these business needs for growth and success.

Long term business loans are generally defined as a specified loan amount with a repayment schedule that exceeds 2 years in duration up to 25 years, has either a fixed or adjustable principal and interest rate, and a monthly or bi-monthly payments deducted from a business bank account. These loans are often for well-established and healthy businesses with sound financial statements and credit histories.

These products are offered by banks, alternative lenders, and brokers. Additionally, the Small Business Administration offers SBA business loan products that are sold and serviced by approved lenders. Due to their long repayment period, the qualifications are fairly strict. Solid credit histories, time in business, and other factors will play an integral role in the qualification process.

Long-Term Business Loan Uses

  • Working capital
  • Business expansion
  • Improvement or remodel of existing facilities
  • Business acquisition
  • Purchase of commercial vehicle or vehicles
  • Equipment
  • Inventory or supplies
  • Hire new employees
  • Refinance existing debt

What are the Pros and Cons of Long Term Business Loans

Long term business loans can be used for a wide range of needs, but there are some important factors to weigh before deciding if long term loans are right for you.


  • Lower Interest Rates
  • Lower Origination costs
  • Longer terms in years which provides for lower payments
  • Monthly payments
  • Access to more Capital than short term loans


  • Qualifications are more difficult to get approved than short term business loans
  • Poor credit may hinder your choices
  • Lengthy Paperwork required
  • Longer Processing times
  • Not flexible when it comes to drawing capital

Types of Long-Term Business Loans: Long-Term Small Business
Lending Options

Long-Term Business Loans

You can find these financial products from both traditional avenues such as banks and online alternative lenders like AdvancePoint Capital. This is great news for business owners who now have more opportunities and choices to deliberate when it comes to finding the right financing solution they need. These loans have the longest repayment period of any loan of up to 25 years, however, they also require substantial credit histories and time in business lengths.

Product Overview:

Loan Size: $30,000 to $250,000

Processing Times: Prequalify in 5 minutes, funding as fast as 2 days after application completion

Interest Rates: Fixed Rates from 6.99% to 26.99%

Loan Duration (Term): 2 to 5-year repayment terms

Prepayment Penalty: None

Payment: Monthly payments are debited from checking account

Fees: Origination fee 3% and up with $200 to $300 for closing costs

Security: Lien on business assets, no minimum requirement for the value of assets


Personal Credit Score

  • Minimum 650 FICO, with good to excellent credit score history

Public Records

  • No bankruptcies or foreclosures in the past 3 years
  • No outstanding tax liens

Cash Flow

  • Business bank statements show cash flow to support loan payments

Basic Eligibility

  • 2+ years in business
  • The owner must be U.S. Citizen(s) or lawful permanent resident
  • Acceptable industry

Use of Proceeds

  • Working capital
  • Refinance existing business debts
  • Equipment purchase

Document Requirements:

  • 1-page simple application
  • Two years business tax returns
  • Year to date profit and loss and balance sheets
  • Accounts receivable/accounts payable reports
  • 6 months of business bank statements

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SBA Working Capital | SBA 7(a) Loan

The Small Business Administration (SBA) offers funding solutions that mitigate risk in order to empower small businesses and their growth. SBA loans are not easy to qualify for and require top of the line borrower history and profitability to obtain. SBA loans have great interest rates because they are guaranteed by the Small Business Administration, which gives lenders security with their investment. However, SBA loans require solid credit histories and time in business — and are not easy to qualify for if you’re a struggling business.

Product Overview:

Loan Size: $30,000 to $350,000

Loan Description: SBA 7(a) loan

Interest Rates: Prime rate plus 2.75% to 3.75%

Use of Proceeds: Working capital, debt refinance, new equipment purchases

Processing Times: Pre-qualify in 5 minutes, funding as fast as 7 days after application completion

Loan Duration (term): 10 years term

Pre-Payment Penalty: None

Payment: Monthly payments

Fees: 4% referral and packaging fee

Security: A blanket lien on business assets, personal guarantee by all 20% owners


Personal Credit Score

  • A minimum personal credit score of 650 FICO, with good to excellent credit score history

Public Records

  • No bankruptcies or foreclosures in the past 3 years
  • No outstanding tax liens
  • No outstanding collections
  • No recent 30+ day late payments

Cash Flow

  • Sufficient business and personal cash
  • Business bank statements show cash flow to support loan payments

SBA Specific Criteria

  • No felonies
  • No delinquencies and/or default on government loans

Basic Eligibility

  • Two years (or more) in business
  • Owner must be U.S. Citizen(s) or lawful permanent resident
  • Acceptable industry

Use of Proceeds

  • Working capital
  • Refinance existing business debts
  • Equipment purchase

Document Requirements:

  • 1-page simple application
  • Two years of business tax returns
  • Year to date profit and loss and balance sheets
  • Accounts receivable/accounts payable reports
  • 6 months of business bank statements

The fast, convenient and straightforward way to get the money you need for your business – now!
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Frequently Asked Questions

Why is long-term financing difficult to obtain?

It is difficult to obtain this funding option because the lender is typically offering attractive interested rates over a longer duration of repayment. This puts the lender’s money at risk to collect for extended periods of time than a business line of credit or shorter-term business loans. It comes down to risk. To minimize the risk of long-term business financing, business lenders will look for higher credit rating standards and require a lot of financial statements to review business health.

What are short term loans?

Short-term loans cost more and have shorter terms compared to their counterpart. Unlike longer options may have terms ranging 2-5 years or even 2-25 years, they are easier to qualify for than long-term loans due to the higher cost and shorter-term, so it probably is a great alternative when you can’t get approved a longer solution. Credit requirements may vary depending on the solution you’re looking for, however, the credit requirements will often time be much less than the long term alternative.

How many years can you finance a long-term loan?

Depending on the loan product and your qualifications, it is possible to get up to 25 years in terms of the SBA CRE program, but more often than not, terms are from 2 years to 10 years in duration.

What is a good interest rate on long-term funding?

An important distinction between short and long-term loans is that you are charged an interest rate which is principal and interest, unlike short term loans which are based on factor costs. Typical rates start at prime or treasury index plus 2.00% an up. Typical interest rates as of 2020 are 6.50% up to 28.99%. That is a big range and is dependent on business loan products and your qualifications.

How long are business term loans?

Well, this depends on the type of funding product you’re talking about. Short term loans have a repayment period of around 3 to 18 months. While long options are much longer, ranging from 2-25 years. However, more often than not, the terms for a long term loan are around 2 – 10 years.

What are the benefits of long-term business loans?

These are beneficial to business owners because the longer length in term provides for lower payments than shorter-term loans. They also tend to have lower interest rates and origination costs. With the extended terms, that also means that larger amounts can be lent to the small business as well for those large product or project purchases such as business expansion. While these are great benefits, they do require solid credit histories and other fairly hefty requirements to obtain.

What are the drawbacks of long-term business loans?

With a long-term comes extended commitment as well. Long-term business loans do not operate like a business line of credit that you can draw cash at any time for any quick cash needs or working capital needs. The flexibility is not available with a long-term loan and the only way to get more money after consummation is by either refinance or applying for a business line of credit or alternative business lending product.

Who qualifies for long-term business loans?

As a general rule, healthy businesses, more than 2 years old in operation, are the ones who qualify for long-term business loans. If your business is struggling with low daily balances in your business bank account or your credit score is not good or excellent than getting long-term financing will be a challenge. You have to have your financial house in order with timely filed tax returns, up to date financial statements such as profit and loss statements, balance sheet, accounts receivable, and accounts payable reports. The better the credit score the better the rate and terms you will get for your long-term business loan as well.

Can I qualify for a long-term loan if I have a bad credit score?

The short answer is no. If you have a bad credit score, then long-term business loans are not for you. Your credit score typically has to be above at least 650 and you must have a long history of handling large debts like mortgages or auto loans as well as the ability to manage multiple credit cards. Remember it’s not just about the FICO score but also the multiple trade lines of credit you manage over a longer than 3 year time period.

Can I get a long-term business loan if I am a start-up business?

The Small Business Administration (SBA) offers SBA loans through Micro-loan programs for start-up businesses but be forewarned as the process can be intense. Many documents will be required and the process as a whole will take weeks to learn your fate. The Small Business Administration’s micro-loan program offers small businesses anywhere from $500 to $50,000 in the capital. The average SBA micro-loan is $13,000. Credit will still play a role, so that’s important to remember.

SBA Micro-Loan

Maximum Loan Amount: $50,000

Loan term: Up to 6 years in term

Interest Rates: 6.99% to 13.99% (based on US Treasury index + interest)

Repayment terms vary according to several factors such as loan amount, planned use of funds, requirements determined by the intermediary lender, and the needs of the small business borrower

What term lengths can I get with a long-term financing option?

They range from 2 years to 25 years. However, the most common terms are 2 years to 5 years in length. The term business loans will vary based on the product you are approved for. However, typical SBA loans are up to 2-5 years.

What are the interest rates for a long-term loan?

Long-term business loan rates vary depending on your qualifications and the long-term business loan product you were approved for and can range from as little as 6.99% up to 28.99% principal and interest. Always compare and contrast offers from multiple lenders when making any decisions on rate, term, and fees.

How much will long-term business loans cost?

Outside of interest rates, most long term business loans will have origination, application, underwriting, or some type of processing fees. Standard fees can be as little as 1% of the funding amount and up to 5% in fees. Always ask for disclosures outlining all fees associated with your long-term business funding offer.

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These are the best financing that is available to small businesses. Unfortunately, they are not easy to obtain and have high credit score standards and a lengthy financial disclosure of the business. It’s worth the effort if you can get one of these loans and it’s important to work with a knowledgeable provider who can steer you through the prequalification and approval process. This provider should have the experience and knowledge so that you are offered all available long-term options that are available in the market place. You don’t want to end up wasting your time on a product you were not qualified to get from the beginning. Not a good feeling for sure. The risks of approval should be disclosed upfront. Make sure that you have knocked out the basic requirements of a long term loan so that you’re not spending all of your time and energy on a goal that’s unreachable. Make sure your credit is up to par and finances are in order.

How to Apply for Long-Term Business Loans?

Check out how to find the best small business loans to weigh all the benefits and evaluate the decision to get funding for your business.Start with this online form

Applying for a loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short application page, wait a few hours for your approval, and then get your money!

AdvancePoint Capital offers an easy business loan experience. Our customers love the fast, streamlined process and high approval opportunities that come from working with us. All credit scores are considered.

The fast, convenient and straightforward way to get the money you need for your business – now! Get your Quote Today by filling out our simple form.

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.