Small-business loan terms can vary depending on the lender, the borrower’s creditworthiness, the amount being borrowed, and the purpose of the loan. However, here are some typical terms you can expect to see for small-business loans:
Loan Amount: Small business loans typically range from $5,000 to $500,000, but some lenders offer loans up to $5 million.
Interest Rates: Interest rates for small business loans can vary depending on the lender, but typically range from 4% to 13%. Rates may be fixed or variable, depending on the type of loan.
Loan Repayment Term: The length of the loan repayment term typically ranges from one to ten years, but can be as long as 25 years for real estate loans.
Collateral: Some lenders may require collateral to secure the loan. Collateral can be in the form of business assets or personal assets, such as a house or car.
Fees: Lenders may charge various fees, such as application fees, origination fees, and prepayment penalties. It’s important to read the loan agreement carefully to understand all fees associated with the loan.
Credit Score: Lenders will consider the borrower’s credit score when determining whether to approve the loan and what interest rate to offer. A higher credit score can result in a lower interest rate and better loan terms.
Overall, it’s important to shop around and compare loan terms from multiple lenders to find the best deal for your small business.