Ten-year business loans have a life of 10 years, paid down in monthly installments. When the repayment terms are long, the associated monthly payments are smaller since the total amount owed is broken down into more segments. This helps business owners manage cash flow over the life of the loan. 10-year business loans are most useful when you’re planning for steady growth over time, instead of addressing immediate needs.
If you’re looking for long term financing and manageable payments, a 10-year business loan is the way to go. Here are the pros for this type of financing:
Here are things to consider before exploring a 10-year business loan:
* A business plan is not required for a 10-year SBA loan from a SmartBiz® marketplace bank.
The funding option you go with will depend on the needs of your business and how you plan to use the funds. Often, a short-term business loan is more appropriate for a small business because the funds are available quickly.
However, long term financing helps small business owners meet their overall business objectives. Consider time to funding and the overall loan cost.
Before applying for 10-year loan, it’s important to have your finances in order. Here are factors to consider:
Your personal credit score is a number that represents your creditworthiness and tells lenders the potential risk of lending money. In other words, how likely are you to pay back the money you’ve borrowed. For in-depth information about this important number, read Your Personal Credit Score: What It Is, Why It’s Important.
In the same way that your personal scores serves as financial ratings, your business credit scores rank the creditworthiness of your business. A number of factors influence your business credit score, including payment history, credit utilization ratio, company size, industry risk, and more.
Most lenders want to work with businesses that have been in operation for more than two years. For startups and new businesses, getting 10-year term funding can be challenging.
Collateral is a physical asset, like equipment or real estate, that the lender can seize and sell if you default. Some 10-year small business loans require colleterial. Check with your lender for specifics.
This is another factor that varies. Discuss annual revenue requirement with your lender for the 10-year term loan you’re seeking. Typically, businesses approved for a 10-year SBA loan from banks that participate in the SmartBiz marketplace have $50,000 to $5 million in annual revenues.
Approved use of proceeds for 10-year business loan may vary but can include:
With low-rates and a 10-year term, SBA loans are known as the “gold standard” for small business financing. The SBA doesn’t make the loans. Instead, they provide a guarantee on the loan, promising to reimburse the bank for a certain percentage of the loan if there is a default. This guarantee lowers the risks to lenders, encouraging them to offer these loans to more American small businesses. Many banks and other financial institutions offer SBA loans, but the process, requirements, and fees can vary.
SmartBiz Loans® helps streamline the application process for an SBA loan with 10-year terms, saving you the time and hassle of applying to multiple banks. Our experienced financial professionals use our unique technology platform to help match you with the trusted lender most likely to fund your business. The banks in our marketplace have funded over $1.5 billion in small business loans, and about 90% of qualified applications we refer get funded.
Discover if you’re pre-qualified here. It only takes 5 minutes and doesn’t impact your credit score.* For more information about long term and short term financing options available through banks and non-bank lenders in the SmartBiz marketplace, visit the SmartBiz Loans website today.