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Long term business loan facts

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The long term business loan requires a long period of pay back time and a small amount of money for repayment. So, if you’re looking for a business funding with monthly payments lower than the offering of short term loan, the long term is your alternative. However, you need to keep in mind that there are eligibility rules that come with the long term loan. You can’t borrow money with the same condition as its counterpart. Check our recommendation on Monthly Business Capital loans.

Main benefit

The long term loan allows you to use the capital as you see fit. Among the reasons your application gets approved includes the following:
• Business expansion – If you plan to expand your business on a large scale, choose the long term loan.
• Relocation – If you’re planning to move your office to a new location, choose the long term loan.
• Large inventory purchase – If the budget required to purchase an inventory does not match the offer of the short term loan, the long term business loan must be your next option.
• Business equipment purchase – If you want to upgrade your equipment to cope up with the competition, the long term loan is your best option.

The collateral

One of the unique features of a long term loan is the collateral. It’s needed because you’ll be borrowing a large amount of money. The lender wants to ensure that you have personal assets, which can be the source of payment once you failed to pay.

The good thing about collateral is that you get lower monthly rate so you can really pay the lender. You don’t need to worry about your personal assets. As long as you pay on time and you handle your business well, you’ll be able to pay all your debt without the need to use a collateral for payment.