Getting a Business Term Loan in Springfield, IL
Business term loans are often referred to as “classic loans” because they are tested, tried, and true by many businesses throughout the United States. A term loan provides a stable and flexible way to get access to more capital, cover expenses, grow the business, and build a good credit score.
What is a business term loan and how does it work?
By definition, a business term loan
provides a borrower with a lump sum of money upfront and requires repayment at regular intervals over a set amount of time. The timeframe here is referred to as a loan term, and there are interest rates which can be fixed or floating.
Applying is free and will not affect your credit score.
Once you are approved for a term loan, you will receive the full amount of funds as a single payment, on which you will pay interest and other fees. The repayment schedule depends on your profile, credit history, and type of loan. Here, we have a couple of loan types including short-term, medium-term, and long-term loans.
The Benefits Of Term Loans
Business term loans are a common corporate financing option for many businesses. As such, they also bring a lot of benefits, including:
- Lower interest rates, compared to other types of business financing. Long-term loans are especially attractive in this manner, as they offer lower interest rates for longer repayment plans.
- Flexibility, which is seen in many ways. If you choose a business term loan in Springfield, you can use the money to expand your business, renovate, purchase new locations, buy inventory or equipment, hire new staff and refinance your debt.
- Stability and predictability, which are mostly seen through the set payment structure. With a business term loan, you will always know how much you owe each month and easily account for the loan.
- A chance to improve your business credit, where a strong history of on-time payments help you build your business’ credit score. This makes it easy to obtain other loans or financing in the future.
- An option to fund large investments, which is why many businesses decide to apply for long-term business loans. The long repayment period can provide a large amount of funds used for major investment opportunities.
Term loans are good for borrowers who have a one-time need for funds and are interested in getting a fixed rate and term where their payments don’t vary as much as they do with lines of credit. Borrowers who want to precisely know when the loan will be paid off without any worries about fluctuating payments mostly benefit from these loans.
Short-term vs. long-term loans
The standard structure of loans covers short-term, medium-term, and long-term loans. However, the general classification divides them between short-term and long-term loans. In that manner, short-term loans are ones that last anywhere from a couple of months up to a few years. Long-term loans are those with a repayment schedule of more than five years, up to 25 years. The subtype called medium-term loans has emerged because of the fact that most people want to repay their term loans between 1 and 5 years after the loan is approved, and hence, they are the most common type.
Interest rates are another important thing to mention here. As you would guess, any interest rate for business term loans in Springfield depends on the length of the loan, the type of lender, as well as the business’ details (credit score, revenue, length of time you’ve been in business, etc.). Here, the difference between the rates is high, which is why most lenders offer fixed interest rates as an incentive to the borrowers. However, in most of the cases, business term loans have variable interest rates to stimulate quicker repayment.
Which one to choose?
Choosing between short-term and long-term business loans is a dilemma for many. However, they have all been designed to match certain asset lives as well as business profiles. To determine the best business term loan in Springfield, IL that meets your needs, you need to evaluate the terms and select a loan structure that matches the asset you are financing.
For instance, if you are funding a new building or buying a piece of heavy-duty equipment, try to match the funding with the useful life of the asset. In our example, a 25-year commercial mortgage works for the building, and a 10-year term loan for a piece of machinery.
If you are a first-time borrower, it is important to maintain your business records and keep accurate track of your expenses and income. This is a good way to maintain your credit and be eligible for more loans in the future. Our advisors can help you determine which option is best for your business.
How to use a business term loan ?
If you are interested in applying for a business term loan in Springfield, IL, you can do it through a bank or an online lender. The latter is an easier option where you can get approved within 1-2 business days.
When it comes to using it, business term loans are set up to fulfill any business need, no matter how unique it is. The good thing is that you can leverage the loan for everything, whether it’s capital improvements or investing in new equipment, expanding or relocating your business, or hiring more staff.
Applying for a business term loan is easy when done online. At Business Loans Springfield, we introduce a very simple application process that can be found at the top of this page. As
experienced lenders, we will evaluate your credit score, time in business, collateral and any bank statements that show your revenue. We can also counsel you in effective
debt management and loan repayment strategies to help insure the loan we give you is beneficial to both your business and ours.