How much can I borrow with a term loan?

Qualified businesses can borrow up to $5,000,000 with a term loan. Most approvals fall between $50,000 and $500,000 based on monthly revenue.

How long does funding take?

Most term loans fund in 2–7 days from application to wire. Larger loans ($500k+) may take 7–14 days.

Are there prepayment penalties?

Some lenders charge prepayment penalties (typically declining over the first 1–2 years). No-prepayment-penalty options are available — ask before signing.

Is a personal guarantee required?

Yes, on virtually all small-business term loans. Owners with 20%+ equity typically sign.

Can I use the funds for anything?

Yes — use of funds is flexible. Most lenders ask the use case for underwriting purposes but don't restrict spending.

What credit score do I need?

600+ FICO is the typical minimum; 680+ FICO unlocks lowest rates.

Can a startup get a term loan?

Most term loans require 12+ months in business. Startups can use personal-credit-based stacking or equipment financing as alternatives.

What documents are needed?

1-page application, 3 months of business bank statements (4 in NY/CA, 6 in Canada), EIN/SSN, and sometimes tax returns for amounts over $250k.

Do payments report to credit?

Many term-loan lenders report to business credit bureaus (D&B, Experian Business). Personal credit reporting varies.

Can I refinance my term loan later?

Yes. As your business strengthens, you can refinance into lower-rate term loans or SBA loans.

Is interest tax-deductible?

Generally yes — business interest is deductible. Confirm with your CPA.

Term Loan

Business Term Loan

Fixed-rate financing for major investments.

A business term loan provides a one-time lump sum repaid in fixed monthly installments over 1 to 5 years. Simply Approved Business Loans offers term loans from $25,000 to $5,000,000 with competitive rates starting at 8.99% APR for qualified borrowers in the US and Canada.

Apply now

Amount

$25,000 – $5,000,000

Term

1 – 5 years

Speed

Funded in 2–7 days

Best for

4 use cases

Best for

Expansion, renovations, or buildouts
Acquiring another business
Refinancing higher-cost debt
Large equipment or inventory purchases

Key features

Fixed weekly payments
Rates from 8.99% APR
Terms 12 to 60 months
No prepayment penalty options
Use of funds is flexible

How Term Loan works

A term loan is a traditional installment loan: you receive a lump sum and repay it in fixed monthly (sometimes weekly) installments over a set term. Each payment includes principal and interest until the loan is paid in full.

Rates are quoted as an APR. Approval depends on time in business, monthly revenue, profitability, and credit. Established borrowers with 2+ years in business and 680+ FICO see rates 8.99–14%; newer or thinner files run 14–24% APR.

Term loans are best for one-time, well-scoped uses — expansion, acquisitions, refinancing high-cost debt, or large capex — where fixed weekly payments fit your cash-flow planning.

Qualifications

Time in business	12+ months
Min monthly revenue	$25,000
Min FICO	600
Documents	Application + 3 months bank statements

Pros

Lowest cost outside SBA (8.99% APR floor)
Predictable weekly payment
Builds business credit when reported
No prepayment penalty options available
Up to $5M for qualified borrowers

Cons

•Slower than MCA (2–7 days vs 24 hours)
•Higher credit and revenue thresholds
•Fixed payment doesn't flex with seasonal sales
•Personal guarantee typically required

Common mistakes to avoid

Choosing too short a term
A 12-month term keeps interest low but stresses cash flow. Match term to the use case — buildouts often need 36–60 months.
Refinancing low-cost debt with a higher-rate term loan
Always compare APRs net of fees. Sometimes existing debt is cheaper than it looks.
Ignoring origination fees
Origination fees of 2–5% reduce your net proceeds and increase your effective APR. Confirm net funding amount before signing.

Real-world scenarios

$300k restaurant expansion

A 3-location operator added a 4th unit funded by a $300k 48-month term loan at 11.5% APR, paid back from new-unit cash flow.

$150k debt consolidation

A retailer consolidated three MCAs (effective 65% APR blended) into a single 36-month term loan at 14% APR, freeing $9k/month in cash flow.

When another product is a better fit

SBA Loans →
If you can wait 30–60 days for the lowest rates and longest terms.
Business Line of Credit →
If you need ongoing access rather than a one-time lump sum.
Merchant Cash Advance →
If you need 24-hour funding and have weaker credit.

How to apply

01
Complete the secure online application
02
Submit 3 months of bank statements (4 in NY/CA, 6 in Canada)
03
Underwriter reviews and issues approval
04
Sign and receive funds via ACH or wire

Term Loan vs. other funding options

Side-by-side comparison of Term Loan against the most common alternatives. Use this to decide which structure fits your business stage, cash flow, and use of funds.

Product	Amount	Term	Speed	Best for
Term Loan This page	$25,000 – $5,000,000	1 – 5 years	Funded in 2–7 days	Expansion, renovations, or buildouts
SBA →	$50,000 – $5,000,000	5 – 25 years	Funded in 30–60 days	Real estate purchases
Line of Credit →	$10,000 – $1,000,000	Revolving	Approved in 1–3 days	Managing cash flow gaps
Equipment →	$10,000 – $5,000,000	1 – 7 years	Funded in 3–7 days	Trucking & fleet purchases

FAQs about Term Loan

Business term loan rates at Simply Approved Business Loans start at 8.99% APR for well-qualified borrowers. Most approvals fall between 9% and 24% APR depending on time in business, revenue, and credit.

First-hand experience

Expert insight from Simply Approved Business Loans

In day-to-day underwriting we see term loan files clear fastest when the business has 3+ months of consistent deposits, no recent NSFs, and a clear use of funds tied to revenue (not a debt-stack rescue). Files that match this profile typically price 10–25% better than the lender's posted floor.

The most common mistake we see on Term Loan applications is mismatched stated revenue vs. actual deposits. Underwriters pull a Plaid or statement read; if your numbers don't reconcile to within ~10%, the file gets re-graded down a tier or declined outright. Always pre-reconcile before submission.

Approval speed for Term Loan ($25,000 – $5,000,000, funded in 2–7 days) depends 80% on documentation completeness. Clean files — full statements, voided check, ID, and a 90-second answer to "why now?" — close inside 24 hours. Missing pieces push close to 3–5 business days.

If you're declined on Term Loan, ask specifically whether the issue is revenue, time-in-business, credit, or industry. Each has a different fix path — and at Simply Approved we route declined files to an alternative product (revenue-based financing, equipment, or factoring) rather than walk you away.

Reviewed by Simply Approved Underwriting Team · May 2026

Lead-gen pre-check

See if you qualify for Term Loan

$25,000 – $5,000,000 · Funded in 2–7 days. Pre-qualification is free and doesn't affect your credit.

Free pre-check

Eligibility checker

No credit pull. No data stored. Instant answer.

Underwriting disclaimer: The eligibility checker is a self-reported pre-qualification tool. It does not constitute an offer of credit or a guarantee of approval. Every funded file goes through full underwriting — including bank statement analysis, business verification, and a credit inquiry whose type (soft or hard) is disclosed before you sign. Final terms, rates, and amounts depend on underwriting and the specific lender or program.

Apply now — funded in 24 hours

Free to apply. No upfront fees. Real underwriters review every file.

Start application

Term Loan by state

State-specific underwriting notes and scenarios for Term Loan borrowers.

Get funded in as little as 24 hours

$5,000 to $25,000,000. Free pre-qualification. No upfront fees. Same-day decisions for clean files.

Apply now — it's free See how it works

Check your credit score before you apply.

Lenders weigh your personal credit heavily for business funding. Monitor scores from all 3 bureaus, get real-time alerts, and follow personalized steps to qualify for better terms.

Just $1 for your first 15 days, then $24.95/month. Cancel anytime.

Real-time score tracking from all 3 bureaus

Instant alerts when your score changes

Personalized tips to improve your score

Dark web monitoring & identity protection

Affiliate disclosure: we may earn a commission if you enroll. Service provided by myFreeScoreNow.

Business Term Loan

Best for

Key features

How Term Loan works

Qualifications

Pros

Cons

Common mistakes to avoid

Real-world scenarios

When another product is a better fit

How to apply

Term Loan vs. other funding options

FAQs about Term Loan

See if you qualify for Term Loan

Eligibility checker

Apply now — funded in 24 hours

Related products

SBA Loans

Business Line of Credit

Equipment Financing

Term Loan by state

Get funded in as little as 24 hours

Check your credit score before you apply.