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6 Best Long-Term Business Loans For Small Businesses

Looking for a loan for your small business? These lenders offer term lengths of more than three years, plus low interest rates.

    Shannon Vissers
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Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

You’re a business owner, and you’ve encountered a financial hurdle in the form of a large business expense. This expense could be completely unanticipated, such as the sudden breakdown of equipment, or it could be planned, such as a business expansion through improving your facilities or purchasing commercial real estate.

No matter what it is, a big expense can be difficult to pay upfront. When it’s an unexpected or emergency expense, the situation can be even worse. However, many smart business owners have found a solution for these large expenses: long-term business loans.

If spreading out the cost of a large expense over a longer period sounds appealing to you, this financing option may be the right choice for your business. However, you don’t want to rush to fill out an application with a lender just yet. Instead, do your research and boost your knowledge. Read on to learn more about the best long-term business loan options for small businesses.

Learn More About Our Top Picks

CompanyTerm LengthNext StepsTerm Length
Funding Circle

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Funding Circle's business term loans and SBA 7(a) loans both have a maximum term of 10 years.
Funding Circle's business term loans and SBA 7(a) loans both have a maximum term of 10 years.

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Lendio

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Lendio has SBA loans with 10-30 year terms; business acquisition loans with 10-25 year terms; and business term loans with 1-5 year terms.
Lendio has SBA loans with 10-30 year terms; business acquisition loans with 10-25 year terms; and business term loans with 1-5 year terms.

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SmartBiz

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SmartBiz SBA loans have 10-25 year terms, while their bank term loans have a maximum term of 5 years.
SmartBiz SBA loans have 10-25 year terms, while their bank term loans have a maximum term of 5 years.

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Discover Personal Loans

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Discover Personal Loans have terms ranging from 3-7 years, and you can choose your own term length.
Discover Personal Loans have terms ranging from 3-7 years, and you can choose your own term length.

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Upstart

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Upstart personal loans for business can have a term length of 3 or 5 years.
Upstart personal loans for business can have a term length of 3 or 5 years.

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Other Featured Options:

  • U.S. Bank Business Loans: U.S. Bank SBA loans have 7, 10, or 25 year terms; the bank also offers non-SBA business term loans with a maximum term of 7 years.

Read more below to learn why we chose these options.

Best Long Term Loans For Businesses

Long-term business loans have terms ranging from 3 to 10 years, or up to 25 or 30 years for real estate business loans. The best long-term business loans are from SBA lenders, banks, and reputable online lenders. Here are some great SMB lenders that offer term lengths of three years or longer.

1. Funding Circle

Funding Circle



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Funding Circle is an online business lending marketplace that matches businesses to suitable lenders, putting funds in your account in as soon as three days. By applying to Funding Circle, businesses can access long-term loans up to $500,000, with term lengths of up to 10 years. 

Funding Circle’s loan offerings include traditional business term loans, as well as SBA 7(a) loans, which have a flat interest rate of 6%. However, not all businesses will qualify for an SBA loan, or for a long-term loan through Funding Circle—their shortest term is actually just 3 months.

To qualify for Funding Circle, you’ll need at least fair credit (650 credit score or as low as 630 for SBA loans) and 2 years in business. 

Pros

  • Fast time-to-funding
  • Monthly repayments
  • No prepayment penalties
  • Can qualify with credit score under 700

Cons

  • Not for startups
  • Not all businesses will qualify for long-term loan

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2. Lendio

Lendio



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Lendio is another alternative lending service that matches business owners with loans online. With a simple 15 minute application, you can compare loan offers from up to 75 lenders in Lendio’s network, and potentially get funded within 24 hours. Lendio offers many different types of business financing, including long-term business loan options such as SBA loans, business acquisition loans, and traditional business term loans.

Lendio’s term lengths are 10-30 years for SBA loans (including commercial real estate SBA loans); 10-25 years for business acquisition loans; and up to 5 years for business term loans. Rates for Lendio’s business term loans start at 6% and loans can be as large as $2 million.

Your business does not have to meet any specific qualifications to be eligible for Lendio’s free loan matchmaking service, though businesses with stronger credit and higher revenue will qualify for better loans.

Pros

  • Apply to multiple loans with one application
  • Easy to qualify for
  • High borrowing amounts

Cons

  • Not all applicants will be matched with long-term financing offers

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3. SmartBiz

SmartBiz



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SmartBiz is an online business lending service that specializes in SBA loans and bank term loans, specifically. SBA loans and bank loans have notoriously lengthy applications and many hoops to jump through, but SmartBiz has streamlined the entire funding process by acting as an online intermediary. Essentially, SmartBiz combines the ease and speed of online loans with the longer term lengths and lower interest rates of traditional business loans.

SmartBiz online SBA loans range from $30,000 to $5,000,000, have interest rates ranging from 4.75% to 7.00%, and a 10-25 year repayment term. SmartBiz bank term loan amounts range from $30,000$500,000, with interest rates as low as 6.99%, and term lengths of 2-5 years.

To qualify for a SmartBiz loan you’ll need at least 2 years in business and a credit score of 640 for an SBA loan or 660 for a bank loan.

Pros

  • Faster and easier to qualify for than going through a bank
  • Accepts fair-credit applicants
  • High borrowing amounts
  • Low interest rates

Cons

  • Not suitable for startups or bad credit
  • Takes longer to get funded compared with other online loans

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4. Discover Personal Loans

Discover Personal Loans



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One way to get a longer-term business loan as a startup business is to apply for a personal loan. You may be surprised to learn that Discover (as in the credit card company) offers personal loans that can be used for business. Personal loans in general, including Discover Personal Loans, tend to have lower borrowing amounts and higher interest rates compared to business loans; however, all you need to qualify for this type of loan is good credit and a source of income. Another cool thing about Discover Personal Loans is that you can choose your own term length, and there is no prepayment penalty should you decide to repay your loan early.

Discover Personal Loans have a term length ranging from 3-7 years. Loan amounts range from $2,500 to $35,000, with next-day funding and interest rates ranging from 6.99% to 24.99%.

To qualify for a Discovery Personal Loan you’ll need a minimum credit score of 660, though most approved applicants have scores in the 700s. You do not need to have a Discover credit card to apply.

Pros

  • Startup-friendly
  • Can choose your own term length
  • Fixed monthly payments
  • No prepayment/closing/origination fees

Cons

  • Low max. borrowing amount
  • Interest rates can be high

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5. Upstart

Upstart



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Upstart is another alternative lender that offers personal loans that can be used for business. Upstart loans have a higher maximum borrowing amount than Discover’s, but shorter terms, maturing after 3 or 5 years. Still, Upstart loans have longer term lengths than most online loans, and may be good fits for startup entrepreneurs who aren’t looking to borrow a very large amount. Upstart loans are also available to individuals with bad credit.

Upstart loan amounts range from $1,000 to $50,000, with interest rates ranging from 8.16% to 27.99%. According to Upstart, the average 3-year loan offered will have an APR of 24.34%. To qualify for an Upstart loan, you’ll need a minimum credit score of 580, though your application may be considered if you have insufficient credit history to produce a score.

Pros

  • Startup-friendly
  • Bad-credit friendly
  • Funds are disbursed quickly
  • No prepayment penalty

Cons

  • High interest rates
  • Usually charges an origination fee

Get Started with Upstart

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6. U.S. Bank

U.S. Bank Business Loans



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Online business lenders are generally more small business-friendly than big banks. But of the so-called “Big 4” banks, U.S. Bank is arguably the best lender for smaller businesses and offers a variety of long-term financing products suited for small businesses with good credit. You can even apply to some U.S. Bank small business loans online.

Term lengths for SBA loans through U.S. Bank can be 7, 10, or 25 years, depending on the SBA loan type. U.S. Bank also secured term loans with term lengths up to 7 years.

U.S. Bank originates business loans as large as $1 million. Looking at U.S. Bank’s Quick Loan, which is suitable for smaller businesses and which you can apply for online, the maximum borrowing amount is $250,000, the maximum term length is 7 years, and you’ll need at least 2 years in business to qualify. The minimum credit score is not disclosed.

Pros

  • Low interest rates
  • Suitable for established businesses with good credit
  • Fixed monthly payments
  • Can apply to some loans online

Cons

  • Only operates in 25 states
  • May require a bank visit to complete your loan application

Read our in-depth review

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What Are Typical Business Loan Term Lengths?

The term lengths of a long-term loan vary based on a number of factors, including the loan amount, the lender’s policies, and how the funds will be used. In general, most long-term business loans have terms between 3 and 10 years. However, some long-term loans, such as those used to purchase commercial real estate, may have repayment terms of 20 years or more.

Short-Term VS Long-Term Business Loans

Short-term and long-term business loans have some major differences, and the differences are not just limited to the length of the term. Here are the major differences between short-term loans and long-term loans:

Long-Term Loans

  • Smaller Monthly Payments: Large expenses can be broken down into affordable monthly payments by taking out a long-term business loan.
  • Higher Borrowing Amounts (Usually): Long-term business loans often have higher maximum borrowing amounts of up to $1 million to $5 million. However, alternative lenders that offer long-term loans may not offer loans this large.
  • Lower Interest Rates: Borrowers with the highest credit scores can take advantage of interest rates as low as 5% (or sometimes lower), making this one of the most affordable loan options. The longer your term is, though, the more you will pay for the loan in total.
  • Collateral Requirements: For most long-term loans, collateral is required. In some cases, the collateral will be the item being purchased with the loan proceeds, such as equipment, a vehicle, or real estate.
  • Higher Credit Score Requirements: A long-term loan can be one of the most difficult loans to obtain. A great credit score (with no negative items on your credit history) is required to get the most affordable funding. While some lenders may work with borrowers with lower scores, interest may be much higher and terms not as favorable.
  • More Documentation Requirements: Because long-term loans are often for very large amounts of money, lenders want to ensure that all borrowers can pay back the loan. This means that there is a lot of paperwork involved in the application process. Borrowers must come prepared to take the time needed to provide the lender with all documentation to qualify for the loan.
  • Longer Approval Process: Depending on the lender, getting approval for a long-term business loan could take weeks or even months — not ideal for a business that needs immediate funding.
  • Better For Long-Term Investments: Because you will be paying the loan off for a number of years, long-term loans are more suitable for long-term business investments. For example, you don’t want a 3-year loan to pay off 3 months of inventory.

Short-Term Loans

  • Much Shorter Term Length: While long-term loans have years-long terms, STL terms are measured in months or weeks. Any loan with a term length of one year or shorter is considered an STL, but many STLs have a term length of just 3 months.
  • Larger, More Frequent Loan Payments: Short-term loans usually require weekly or even daily repayments. And when the term is short, the repayments are large. The weekly repayments on a short-term loan can be sizable and can be difficult for some businesses to afford.
  • Lower Borrowing Amounts (Usually): Short-term loan borrowing amounts often cap out at $250,000 or $500,000, or sometimes less. Though that’s the max, most short-term business loans are for much smaller amounts—around $20,000.
  • Relaxed Borrower Requirements: These loans are much easier to qualify for than LTLs, in that they have low credit score requirements, low business revenue requirements, and minimal time-in-business requirements.
  • Higher Interest Rates & Fees: Short-term loans can be an expensive way to borrow capital. If you have bad credit, you might pay more than 50% of the borrowing amount. This means that on a $20,000 loan, you would be charged $10,000 in interest and fees, and will have to pay back a total of $30,000 over the next 12 months (or whatever your term length is).
  • Different Fee Structure: STLs usually have a different fee structure than standard term loans. Rather than charging interest in the traditional sense, the borrower is charged a fixed fee, called a factor rate. There’s also usually an origination fee that is taken out of your loan proceeds.
  • No Specific Collateral Requirements: You usually won’t have to put down any specific collateral, such as property or specific business assets. However, you will likely have to sign a personal guarantee and/or agree to a blanket lien before the loan is disbursed.
  • Shorter Approval Process: Short-term loans usually have a very fast approval process. You can often get approved the same day you apply, and see your funds in your account as soon as the next business day. You do still need to fill out some forms and supply some documentation, but overall the approval and funding process is much quicker than with long-term loan.
  • Better For Short-Term Investments: Because you’ll have to repay the loan quickly, short-term loans are better for short-term investments, such as payroll, inventory, or other working capital needs.

All in all, it doesn’t really make sense to say that long-term loans are better or short-term loans are better. It more depends on your specific situation—what you need the loan for, how soon you need the funds, and what type of financing you qualify for.

Types Of Long-Term Business Lenders

Most business owners turn to three main sources for their long-term financing needs: Small Business Administration lenders, banks and credit unions, and alternative/online lenders.

SBA Lenders

The Small Business Administration provides lending programs that are a hit with business owners. The SBA does not issue loans itself, but rather, it sets guidelines that keep interest rates low for borrowers while also providing a guarantee to lenders. Because of this guarantee, SBA-approved lenders, or intermediaries, can offer affordable long-term loans to qualified borrowers.

The SBA offers several long-term loan programs. The most popular is the 7(a) program, which offers up to $5 million for almost any purpose with a maximum repayment term of 10 years. Falling under the 7(a) umbrella is the Community Advantage Loan that offers the same competitive rates and terms for businesses in underserved communities, while the Veterans Advantage program offers long-term loan options for military veterans and service members.

The SBA Microloans program is another option for smaller financing needs. These loans provide up to $50,000 that can be repaid over a maximum term of six years.

For businesses that want to improve their facilities or purchase real estate, 504 loans provide 40% of funding toward these projects. A maximum of $5 million can be distributed through this program, with repayment terms set at a maximum of 25 years.

SBA loans can be obtained from intermediary lenders, including SBA-approved banks (such as U.S. Bank and others), credit unions, and alternative lenders (such as SmartBiz, Funding Circle, and Lendio), as well as nonprofit agencies, and Commercial Development Companies. Learn more about the rates, terms, and requirements of SBA loan programs.

Loan ProgramDescriptionMore

7(a) Loans

Small business loans that can be used for many many business purchases, such as working capital, business expansion, and equipment, inventory, and real estate purchasing.

Review

Microloans

Small loans, with a maximum of $50,000, which can be used for working capital, inventory, equipment, or other business projects.

Review

CDC/504 Loans

Large loans used to acquire fixed assets such as real estate or equipment. 504 Loans are offered in partnership with Community Development Companies (CDCs) and banks.

Review

Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

Review

Banks & Credit Unions

Banks are a very popular source for obtaining long-term business loans because of low interest rates and favorable terms. However, qualifying for these loans can be difficult. Credit scores must be very high, the application and approval process can be lengthy, and banks often have strict requirements in terms of time in business and annual revenues. Businesses that do qualify, however, will find bank loans are easily one of the most affordable loans on the market.

Credit unions also offer very competitive rates and terms, and many businesses prefer to work with these lenders because of the more personalized service they receive. Credit unions may have a bit of flexibility in terms of their requirements, but all borrowers should come to the table with a high credit score and a stable business history.

Businesses pursuing these types of loans can start with the financial institutions where they have already established accounts. Businesses that would rather shop around for the best rates and terms can check out our top banks for business loans to get started.

Alternative Lenders

Alternative lenders offer some benefits that banks, credit unions, and most SBA intermediaries do not, including fast funding and lower credit score requirements. However, there are also several drawbacks to working with alternative lenders (also sometimes referred to as “online lenders”). Higher interest rates are one of the biggest drawbacks. Lower maximum loan amounts are another. Learn more about the benefits and drawbacks of alternative loans.

Most alternative lenders set their maximum repayment terms at five years. Depending on the amount borrowed, this could mean higher monthly payments, especially with higher interest rates that can even exceed 30% in some cases.

However, the return on investment may be enough for a business to move forward with one of these loans. These loans are best for businesses that don’t meet other lenders’ qualifications, including but not limited to credit score, time in business, or annual revenue.

Long-Term Business Loan FAQs

What is considered a long-term business loan?

A typical long-term business loan will have a term length of between three and 10 years. However, certain types of long-term loans, such as those used to buy commercial real estate, may have term lengths of 20 years or more — 25 years in some instances.

What is the maximum term length I can get on a business loan?

Long-term loans for most business purposes tend to have a maximum term length of 10 years. However, certain business loans, such as commercial real estate loans, can have term lengths longer than 20 years. In fact, certain types of SBA 7(a) loans, such as those used for real estate and construction, can have term lengths of up to 25 or 30 years.

What interest rates can I expect on a long-term loan?

Your interest rate will depend on a number of factors, including your loan source, the loan amount, and your personal creditworthiness. Interest rates can vary from below 5% for bank loans offered to the most qualified borrowers, to over 30% for loans offered by alternative lenders to startup outfits or businesses with a poor credit history.

Why are long-term loans harder to get than short-term loans?

Because long-term loans tend to involve larger amounts of money and are more reliant on your business’s long-term health than short-term loans, the lender is taking on more risk. Therefore, lenders are more cautious when evaluating loan applicants when the loan in question is long-term. Long-term loan vendors tend to prefer working with businesses with a significant track record of success. They’re also more likely to require high credit scores from applicants.

How do long-term business loans work?

A long-term business loan is a type of loan that you pay back over a longer period. The lender loans the borrower a set amount of money for business expenses, such as purchasing a commercial vehicle or real estate, buying equipment, or hiring new employees.

With the help of a long-term loan, the business does not have to pay a large sum out of pocket. Instead, a lender will provide the needed funding, which the business will pay back in fixed amounts over several years, along with interest and fees.

Is collateral required to get a long-term business loan?

Yes, long-term business loans usually require some form of collateral. The collateral might include some or all of your existing business assets, or the item you are financing with the loan, such as equipment or a business vehicle.

Final Thoughts

A long-term business loan can be a smart and affordable way to manage large expenses. However, to get the most out of this type of financing, it’s important to do your research to find the lowest interest rates and best terms. Taking some time to evaluate why you need the money and what kind of return you expect on your investment will help you choose a loan that best suits your long-term goals.

A major benefit of long-term business loans is that they usually come with a low interest rate. Just remember that with a longer term comes a longer amount of time for interest to accrue. If a low interest rate is what you’re after, read 4 Best Low-Interest Loans for Your Small Business In 2021. This post discusses Funding Circle and SmartBiz in further detail and gives a couple of shorter-term loan options as well.

In Summary: Best Long Term Loans For Businesses

  1. Funding Circle: Funding Circle's business term loans and SBA 7(a) loans both have a maximum term of 10 years.
  2. Lendio: Lendio has SBA loans with 10-30 year terms; business acquisition loans with 10-25 year terms; and business term loans with 1-5 year terms.
  3. SmartBiz: SmartBiz SBA loans have 10-25 year terms, while their bank term loans have a maximum term of 5 years.
  4. Discover Personal Loans: Discover Personal Loans have terms ranging from 3-7 years, and you can choose your own term length.
  5. Upstart: Upstart personal loans for business can have a term length of 3 or 5 years.
  6. U.S. Bank Business Loans: U.S. Bank SBA loans have 7, 10, or 25 year terms; the bank also offers non-SBA business term loans with a maximum term of 7 years.
Shannon Vissers

Shannon Vissers

Expert Analyst & Reviewer at Merchant Maverick
The former editor-in-chief of SteelOrbis, Shannon has been researching and writing about small business software and financing since 2015. Her retail and personal finance expertise has been cited in numerous publications, including Reader's Digest, MSN, Yahoo Finance, and GOBankingRates . She has also published articles for LIVESTRONG.COM, eHow, Life'd, and other websites. Shannon attended San Diego State University, graduating in 2005 with a BA in English.
Shannon Vissers
View Shannon Vissers's professional experience on LinkedIn.
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