But long-term business loans are the way to go when you have an extra-large expenditure, such as a major piece of equipment or real estate. With a longer repayment period comes lower monthly payments, making large investments easier to afford. They are also a good option if you have an established business with strong finances. To qualify, you need solid personal credit, strong annual revenue and cash flow and, depending on the lender, collateral. Here are a few of the best lenders for long-term business loans and the qualifications for each.
2) You have at least $75, 000 in annual revenue
Typical borrower profile
Apply on SmartBiz’s secure site
SmartBiz provides SBA loans that have a 10-year repayment term, which means monthly payments are much smaller than those of other loans. Borrowers apply through SmartBiz’s online lending platform, which aims to streamline the often months-long traditional SBA application process. SmartBiz partners with banks to provide loans ranging from $30, 000 to $350, 000.
you’ll find among online alternative lenders, which makes them a great option for buying or renovating real estate, or refinancing high-cost debt. There’s no prepayment penalty for repaying the loan early.
- Your business needs to have been in operation for at least two years.
- You must have no outstanding tax liens, and no bankruptcies or foreclosures in the last three years
- You must have no recent charge-offs or settlements.
- You must be current on government-related loans.
Since the SBA requires its lenders to take a lien on your business’s assets and requires owners who own more than 20% of their business to sign a personal guarantee, this could make you personally liable for repaying the debt. Because these loans are backed by the U.S. Small Business Administration, more .
Although SmartBiz doesn’t have minimum revenue or credit score requirements, the typical SmartBiz borrower has revenue of $1 million and a personal credit score of 705.
The bottom line: Long-term business loans
Long-term business loans can give you the cash you need to invest in your company’s future. Before choosing a loan, carefully compare the qualifications required by each lender, APRs, length of the repayment term, and whether there is a prepayment penalty.
Find and compare small-business loans
NerdWallet has created a comparison tool of the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged them by categories that include your revenue and how long you’ve been in business.
Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.
To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans tool. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.
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- Business tax returns (last two years)
- Personal tax returns (last two years)
- Evidence of business property insurance
- Evidence of general liability insurance, such as a homeowner’s insurance policy
- Business entity certifications (like articles of incorporation)
- Business assets list
- Corporate resolution to borrow
- Photo of driver’s license
- Deed(s), title polic(ies) or lease agreement(s) for all real estate owned or used by the business. Lease agreement would include a subordination release from your landlord.
- Home mortgage statement
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