The benefits of long-term loans include more time to repay and lower monthly payments than you’ll find with short-term business loans. The challenge: It may be harder to qualify because you’ll likely need an established business and strong finances.
As with any business loan, you should compare the costs and terms of each loan carefully.
We’ve outlined the best long-term online business loans, starting with the longest repayment term:
Long-term business loans up to 10 years
- Loan amount: $30,000 to $350,000
- APR: 8.5% to 9.21%
- Loan term: 10 years
- Funding time: As quickly as seven days but typically several weeks
- Read our SmartBiz review
SmartBiz provides U.S. Small Business Administration loans of up to $350,000 with a 10-year repayment term, which can make it easier to manage monthly payments. For example, a $100,000 loan with an 8.5% annual percentage rate would require monthly payments of $1,240 over 10 years, while the same loan with a five-year term would require monthly payments of $2,052. Figure out your loan’s monthly payment and costs by using NerdWallet’s business loan calculator.
Best for: Financing an expansion, renovating real estate or refinancing debt.
Pros: Low APR, no prepayment penalties.
Cons: Your business needs to be established and have strong finances to qualify, and you’ll need to meet the SBA’s rigorous requirements. It could take several weeks to complete the qualification process and get funding.
How to qualify: You’ll need to have been in business at least two years and earn at least $50,000 in annual revenue. You’ll also need a minimum personal credit score of 600 for loans of $30,000 to $150,000 and at least 650 for loans over $150,000. Here’s a list of SBA ineligible businesses.
Long-term business loans up to 5 years
If you don’t qualify for an SBA loan through SmartBiz or you want funding faster, Lending Club, Funding Circle and Able Lending are solid choices. However, since these lenders carry higher APRs and have repayment terms of up to five years, your monthly payments will be higher than with SmartBiz.
- Loan amount: $5,000 to $300,000
- APR: 8% to 35%
- Loan term: One to five years
- Funding time: As fast as two days but typically a week or two
- Read our Lending Club review
Lending Club provides term loans of up to $300,000, repaid monthly over one to five years. Although the APR on a loan can be as low as 8%, it can reach 35%, depending on your credit score, annual revenue and the overall strength of your business.
Best for: Expansion or working capital.
Pros: Less stringent requirements than SmartBiz, no prepayment penalties, fast funding.
Cons: High rates if you have bad credit or weak revenue.
How to qualify: Although Lending Club’s requirements are less rigorous than those at SmartBiz, you’ll still need a personal credit score of at least 600, two years of business history and at least $75,000 in annual revenue to qualify.
- Loan amount: $25,000 to $500,000
- APR: 7.4% to 36%
- Loan term: One to five years
- Funding time: Average of 10 days
- Read our Funding Circle review
Funding Circle provides loans of up to $500,000. As with Lending Club, you repay monthly over one to five years. The APR on Funding Circle’s loans can range from 7.4% to 36%, which is nearly identical to Lending Club’s.
Best for: Expansion, refinancing debt.
Pros: High borrowing amounts, no prepayment penalties.
Cons: Need strong credit to qualify; slower time to funding than peers.
How to qualify: You’ll need a minimum credit score of 620, which is 20 points higher than Lending Club’s minimum. You’ll also need a minimum of two years in business, but Funding Circle doesn’t require a minimum annual revenue. Also, you can’t have had a personal bankruptcy within the past seven years.
- Loan amount: $25,000 to $1 million
- APR: 8% to 25%
- Loan term: 1 to 5 years
- Funding time: Up to 7 days for Able-funded loans; up to 1 to 2 days after full backer contribution for Able Growth loans
- Read our Able Lending review
Able Lending is a good option if you have relatives who want to help you fund your business. The company’s loans can be funded entirely by Able Lending, or partially by your friends and family. Loans are repaid monthly over one to five years and carry APRs ranging from 8% to 25%. The lender is also an option if you need to borrow larger amounts — up to $1 million.
Best for: Expansion, inventory and refinancing debt.
Pros: High borrowing amounts, no prepayment penalty, low rates if you bring on backers.
Cons: Need strong credit and revenue to qualify, as well as a strong network if the loan is funded partially by friends and family.
How to qualify: You’ll need a minimum credit score of 600, at least one year of business and a minimum $100,000 annual revenue, as well as no bankruptcies in the past 12 months. Note that Able Lending is currently unavailable to borrowers in six states: California, Delaware, Nevada, North Dakota, South Dakota and Vermont.
Summary: Long-term business financing options
Want to compare more 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.
Updated Sept. 12, 2017.