How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 6 long-term business loans
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for Long-term business loans up to 25 years | $5,000,000 | 650 | with Fundera by NerdWallet |
SBA CDC/504 loans | Best for Long-term business loan for real estate | $5,000,000 | 680 | Read Review |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Long-term business loans up to 5 years | $500,000 | 660 | with Fundera by NerdWallet |
SBA Microloan with Fundera by NerdWallet | Best for Long-term business loans for bad credit | $50,000 | 620 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.0/5 Best for Long-term equipment loan | $250,000 | 575 | with Fundera by NerdWallet |
Bank of America Business Advantage Unsecured Term Loan | 5.0/5 Best for Long-term bank loan | $100,000 | 700 | Read Review |
Here are 6 long-term business loans
Best for Long-term business loans up to 25 years
Best for Long-term business loan for real estate
Best for Long-term business loans up to 5 years
Best for Long-term business loans for bad credit
Best for Long-term equipment loan
Best for Long-term bank loan
I'M INTERESTED IN:
Our pick for
Long-term business loans up to 25 years
SBA 7(a) loan
Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
11.50-15.00%
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Lowest interest rate
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
Our pick for
Long-term business loan for real estate
SBA CDC/504 loans
Max Loan Amount
$5,000,000
Min. credit score
680
Est. APR
5.00-7.00%
SBA 504 loans are designed to promote business growth and job creation through the purchase or upgrade of major fixed assets.
Max loan
$5,000,000
Min. Credit score
680
Apr range
5.00-7.00%
Our pick for
Long-term business loans up to 5 years
Funding Circle - Online term loan
Max Loan Amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
Our pick for
Long-term business loans for bad credit
SBA Microloan
Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Max loan
$50,000
Min. Credit score
620
Apr range
8.00-13.00%
Our pick for
Long-term equipment loan
Triton Capital - Equipment financing
4.0
NerdWallet rating with Fundera by NerdWallet
Max Loan Amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
4.0
NerdWallet rating Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
Long-term bank loan
Bank of America Business Advantage Unsecured Term Loan
Max Loan Amount
$100,000
Min. credit score
700
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
Max loan
$100,000
Min. Credit score
700
What is a long-term business loan?
A long-term business loan provides you with a lump-sum of money that is repaid over a set period of time — often defined in years instead of months. The repayment period is typically from three to 10 years; although, some loans, like SBA loans, can have even longer terms of up to 25 years.
Depending on the loan product, you may have a choice between a fixed or variable interest rate. Long-term business loans are offered by banks, online lenders, credit unions and other types of lenders.
How long-term business loans work
Long-term business loans provide borrowers with lump sums of capital. They are usually repaid on a monthly basis, with fixed, equal payments over the course of the term. Generally, this type of financing follows an amortization schedule, where you pay more toward interest at the beginning of the loan and more toward the principal at the end.
Long-term small-business loans can make sense for purchasing real estate, financing equipment, renovating or expanding your business, hiring new employees, refinancing existing debt and more.
Types of long-term business loans
SBA 7(a) and SBA 504 loans
These government-backed small-business loans typically have some of the lowest rates and the longest repayment terms in the market. You work with U.S. Small Business Administration-approved banks and other lenders to qualify for these long-term business loans of up to $5 million. The typical repayment period is 10 years for SBA loans for working capital and equipment, and up to 25 years for large assets such as land and facilities.
How to qualify: SBA loan requirements typically include being in business for at least two years and having strong annual revenue. Generally, you'll also need a good personal credit score of 690 or higher (although some SBA lenders may have lower score requirements).
Many SBA loans are secured business loans, which means you may need to provide collateral.
SBA microloans
The SBA also offers microloans, which are distributed through nonprofit community institutions. These institutions often focus on working with underserved business owners, such as minority business owners and women business owners. SBA Microloans have terms up to six years and are typically easier to qualify for than other types of SBA loans — but they are only available in amounts up to $50,000, which may not be ideal for funding larger projects.
Bank loans
Traditional lenders provide long-term business loans with repayment terms from five to seven years. Banks tend to offer lower interest rates than online lenders, but your exact rate will depend on your qualifications.
Aside from big banks, you can also apply for a long-term bank loan at your community bank or credit union.
How to qualify: You typically need to be an established business with strong annual revenue and a good personal credit score (likely in the 700s or higher) to get a long-term business loan with a competitive rate. Banks also may require collateral.
Online business loans
If you don't qualify for an SBA loan or bank loan — or you want funding faster — consider long-term loans from online lenders, such as Funding Circle. This online lender offers repayment terms of up to seven years.
How to qualify: Online lenders tend to have less stringent requirements than banks. You may not need to meet a minimum annual revenue to qualify, and their credit score requirements may not be as high. Some online lenders will require a personal guarantee, but won’t require that you put up physical collateral on the loan.
Long-term business loans vs. short-term business loans
There is no set industry standard for what’s considered a long-term or short-term business loan. The dividing line between them is often a three-year repayment period, though business loans with terms from one to three years are sometimes referred to as medium-term loans.
The chart below highlights some of the key differences between long-term and short-term business loans.
Long-term business loans | Short-term business loans | |
|---|---|---|
Term length | Typically three to 10 years; up to 25 years in some cases. | Typically one year or less; in some cases up to three years. |
Repayment schedule | Usually monthly repayment. | Usually weekly or daily repayment. |
Borrower requirements | Typically need strong annual revenue, multiple years in business and good personal credit to qualify. | Startups and business owners with bad credit may still be able to qualify. |
Funding speed | Varies based on lender; bank and SBA loans are slow to fund, but online lenders can offer capital in a few days. | Some online lenders can provide funds in as little as 24 hours. |
Best for | Purchasing equipment or real estate, renovating your business, expanding to a new location, hiring employees, refinancing existing debt. | Working capital, emergency expenses, making payroll, bridging cash flow gaps, purchasing inventory, taking advantage of a new opportunity. |
In addition, short-term business loans generally have higher APRs compared to long-term business loans — although the interest rate you receive will vary based on the lender and your business’s qualifications.
Cost of long-term loans vs. short-term loans
With a long-term business loan, you’ll have smaller monthly payments spread out over a longer period of time. With short-term business loans, you’ll usually have larger payments that you need to make more quickly — especially if your repayment schedule is daily or weekly.
Here’s an example of how the repayment costs break down:
Let’s say you have a $100,000 term loan with an APR of 10% and a term of 10 years. With this loan, you’d make monthly payments of roughly $1,322, for a total repayment of $158,581, which includes $58,581 in total interest.
The same loan paid over a two-year term, on the other hand, would require weekly payments of $1,062 ($4,248 per month), for a total repayment of $110,429, which includes $10,429 in total interest.
Although you’d be paying less in total interest on the short-term loan, the amount you’d pay each month would be more than three times higher than with the long-term loan.
Use NerdWallet’s business loan calculator to figure out your loan’s monthly payment and costs.
Find the right business loan
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on August 10, 2023
Methodology
NerdWallet reviewed both traditional and online lenders in order to create our list of the best small-business loans.
Our list includes a variety of loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our list meets the following criteria:
-- Maximum loan amount of at least $50,000.
-- Transparent rates and repayment terms.
-- Funding available within two weeks of applying.
-- Personal credit score requirements of 680 or below.
-- No more than two years in business required.
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
Learn more
Frequently Asked Questions
Most long-term business loans have a maximum repayment term of 10 years. But some types of loans, like real estate or construction loans, may have longer terms. For instance, the maximum term for SBA loans used for commercial real estate purposes is 25 years.
Many lenders will require that you have strong personal credit in order to qualify for a long-term business loan. If you have bad credit, however, you may be able to access capital through an SBA microloan. These loans max out at $50,000 but are distributed through nonprofit organizations, which often have more flexible requirements and are willing to work with newer businesses or those with bad credit.
It depends on the interest rate and term length of your specific loan, but in general, the longer the loan term, the more interest paid over the life of the loan. While you may pay less in total interest on a short-term loan, your monthly payment will typically be higher than with a long-term loan of the same amount.
Long-term business loans are often used when a business needs a lump sum of cash for expenditures such as the purchase of real estate or equipment, renovation of an existing business, business expansion or refinance of existing debt.
