September 21, 2023 By Caitlin Rose

When it comes to financing your small business, you typically have options. A bank term loan with a fixed interest rate may offer a solid foundation for financial planning and growth. 

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What is a bank term loan?

A bank term loan provides borrowers with a lump sum of cash upfront, with specific borrowing terms for repayment. If you are looking to secure funds quickly, a bank term loan typically offers you the opportunity to secure cash sooner rather than later, while locking in a favorable rate. 

Beyond working capital and debt refinancing, bank term loan funds are commonly used by small businesses to purchase fixed assets like equipment or a new building, hiring employees, marketing, partner buyouts, acquisitions, or inventory. Bank term loan amounts range from $30,000 to $350,000 with repayment terms of two to five years. 

Benefits of fixed-rate term loans

Opting for a bank term loan with a fixed interest rate may offer many benefits for your small business, including long-term cost savings and financial stability. 

A fixed interest rate is an unchanging rate charged on a loan that remains the same throughout the lifetime of the loan. With a fixed rate, there are no surprises. Even if conditions change and rates go up, your rate and your monthly payments will remain the same. This degree of predictability may be very attractive to a small business with varying cash flow and other fluctuations.  

When interest rates are low, a loan that comes with a fixed rate may even contribute to long-term cost savings, compared to a variable rate that may go up in the future. It is also easier to calculate the long-term costs of borrowing, which may help you decide the size of your loan. 

Taking out a term loan allows you to budget for other expenses. It may free up your business’s cash flow in order to use it elsewhere, or when an unexpected cost occurs. 

Term loan + dedication = success

SmartBiz® recently worked with Enyermy Dominguez, a successful beauty entrepreneur. Dominguez operates a successful hair salon in Orlando. Over the years she realized that the products in her salon were not giving her clients the best results. She knew she could do better. 

Dominguez worked with specialists in Los Angeles and Brazil to create vegan, cruelty-free hair care products. While exploring manufacturing deals to get her new products to market, she realized she needed additional funding. She found it difficult to get approved for a loan and eventually opened a business credit card. 

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Her dedication and hard work paid off when her new product sold out within a week. Dominguez knew she would need more than a credit card to keep up with demand. She came to SmartBiz and worked closely with her dedicated loan operations specialist to secure a $60,000 term loan funded by a bank in the SmartBiz network. 

She was able to use the term loan funds to grow her product line, launch a website, and get her hair care solutions into the hands of more happy clients. 

“Best experience ever with a business loan,” said Dominguez. “The process was fast and easy. It only took a week for approval and I would recommend SmartBiz 100%. Definitely they will always be my first option to keep growing my business.” Read all of Enyermy’s story. 

Other financing options

If Enyermy’s real-life success story, and the financial stability of a fixed rate term loan sound like the right funding match for you, begin your application today. 

However, other financing options, like SBA loans or a business line of credit may also be worth considering. It is important to weigh the pros and cons of each option and decide what is best for you and your business. 

For helpful comparisons, check out our recent blog on choosing the right financing option

Next steps

A fixed rate bank term loan may be the right financial fit for you if you are looking to secure capital quickly, with minimal headaches, and an easy-to-follow, predictable payment plan. A fixed rate means you will know exactly what your payments will be each month and you may be able to lock in a low interest rate. This may lead to financial stability, business growth, and the ability to plan your financial future. 

With our streamlined application process and dedicated team of experienced specialists, SmartBiz is here to help you secure a bank term loan. Our online lending network matches you with the right bank or lending partner to meet your business needs. See if you pre-qualify in five minutes. 

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