What is a Business Term Loan?
A Business term loan provides a lump sum of cash upfront, which is repaid over a fixed period with interest. This type of loan is ideal for businesses looking to make significant investments, such as purchasing equipment or inventory, or expanding business operations.
Business has been generating consistent revenue for at least one year
Credit Score of 600 or Higher (lower scores may be considered with additional documentation)
Personal guarantee required from owners with 20% or greater ownership
Business assets, equipment, or inventory may be required as collateral
No active bankruptcies; discharged bankruptcies considered after one year
Must provide business tax returns, financial statements, and bank statements
Business plan required for startups or expansion projects
Must be located within the CDFI's designated service area
Participation in business development services may be required
Loan amount ranging from $10,000 to $250,000
Fixed rates ranging from 6.00% - 13.00%
Terms of three to seven years
Origination Fee of 1.00% - 2.00%
Documentation Fee of $250 - $500
No prepayment penalties
Monthly payments required
Business technical assistance included
Flexible collateral requirements (business assets, equipment, inventory)
Most recently filed two years of business tax returns (if applicable)
Most recently filed two years of personal tax returns
Last six months of business bank statements
Current profit and loss statement and balance sheet
Business licenses and permits required by state/local authorities
Government-issued photo ID for all owners with 20% or greater ownership
Proof of business ownership (Articles of Incorporation, Operating Agreement, etc.)
Business plan (if less than 2 years in business)
Additional documentation may be required based on loan size and business type
Most applications are processed within 2-3 weeks from receiving all required documentation. Complex loans may take longer, while smaller loans might be processed more quickly.
Business term loans can have a variety of uses, including:
Working capital
Equipment purchases
Inventory expansion
Business expansion or renovation
Refinancing existing business debt
Hiring and training employees
While collateral may be required, we consider various forms of security including business assets, equipment, or inventory. Some loans may require only a personal guarantee.
We look beyond credit scores and consider your entire business profile, including cash flow, business performance, and future potential. We may be able to work with you if you have less-than-perfect credit.
No, you can pay off your loan early without any prepayment penalties.
Monthly payments are fixed and include principal and interest. The amount depends on your loan size, interest rate, and term length. We’ll provide a detailed payment schedule before closing. You can also check out the Loan Calculator provided under Business Resources.
Once approved and documents are signed, funds are typically disbursed directly to your business bank account within 1-2 business days.
We require annual financial statements, tax returns, and may conduct periodic check-ins to support your business success. Specific requirements vary based on loan size.