Business Term Loans in Columbiana Alabama

How can you use a business term loan in Columbiana Alabama

As mentioned briefly above, business term loans are likely what you think of when it comes to commercial (or even personal) financing. With a term loan, a small business lender gives you access to a lump sum of capital which you then pay back, with interest and fees, over a set period of time.

Although your payment schedule will vary based on the type of business term loan and the lender you're working with, you'll make equal payments over the course of your loan term.

This being said, Columbiana Alabama business term loans in can be issued by banks, credit unions, and online lenders. In general, banks and credit unions will offer the most ideal rates and terms, but will also require top qualifications and will be slower to fund. Online lenders, on the other hand, will offer greater flexibility and faster funding times, but will likely be more expensive and have shorter terms.

Overall, in addition to a predictable payment schedule, one of the benefits of business term loans is that they can be used for a variety of business financing purposes. Therefore, with medium and long-term loans (vs. short-term loans), you'll find that these loans are often used for:

• Purchasing equipment or inventory
• Working capital
• Refinancing other business debts
• Hiring staff
• Meeting payroll or tax obligations
• Financing business expansions
• Purchasing real estate
• Funding general long-term investments

How to Apply for a Business Term Loan in Columbiana Alabama: Requirements and Getting Started

To apply for a business term loan in Columbiana Alabama, as quickly as possible. Below you will see a form asking for your basic business information. By filling that out, step one is done. From there one of our loan specialists will give you a call walking you through the next step.

With this in mind, once you've determined where you're likely to qualify, you'll be ready to start preparing your business loan application.

Again, the application process will largely depend on the lender; alternative lenders typically offer online-based, streamlined applications with minimal documentation, whereas banks are more likely to require extensive documentation and an in-person or paper application.

Overall, however, you should expect to provide some (if not all) of the following when applying for a business term loan:

• Basic personal and business information, including a drivers license, voided business check, proof of ownership, business license, etc.
• Personal and business bank statements
• Financial statements such as your balance sheet and profit and loss statement
• Personal and business credit score
• Personal and business tax returns
• Proof of collateral (if required)

Moreover, as we mentioned, many lenders will require that you sign a personal guarantee for your Columbiana Alabama based loan, whereas others will take out a UCC-lien on your business's assets. Before signing any agreement, therefore, you'll want to thoroughly review all of the details to ensure you understand the terms, fees, and liabilities.

I know that's a bit of information so If you like to speak with us feel free to give us a call: 386-825-5626

Business Term Loan in Columbiana Alabama Example

To get a better sense of how business term loans work, let's walk through an example.

Let's say you're offered a term loan of $250,000 with monthly payments and a two-year term. The interest rate on this loan is 8% and you're paying the lender an origination fee of 2%.

With this information, you can plug-in the numbers into a term loan calculator to estimate your monthly payments as well as determine how much this loan will cost your Columbiana Alabama based business.

Overall, you'll be making monthly payments of $11,306.82 to the lender with a total repayment of $271,363.75. The cost of this loan, therefore, is $26,363.75. In addition, you can also use these calculations to determine your APR, as opposed to the simple interest rate. If your interest rate is 8%, but you also have an origination fee of 2%, your APR will end up being higher than that quoted 8%.

In this case, the APR on the loan is 10.01%.

Business Term Loan Breakdown

Let's take a look at a simple 6 month $20,000 business term loan at 6% interest rate. This will give you a better understanding of the term loan breakdown.

Types of Columbiana Alabama Business Term Loans

The phrase “business term loan” can actually encompass a variety of financial products that all share this term structure. Therefore, it's important to distinguish between the different types of business term loans. Generally, as we've already seen so far in this discussion, the most common way to differentiate business term loans is by the length of their repayment period short-term, medium-term, or long-term.

• Short term business loans: Short term loans have repayment periods of one year or less (sometimes up to 18 months). These loans are usually issued by online lenders, have the most flexible qualifications, and are the fastest to fund. Short-term loans, however, are also typically the most expensive type of business term loan.
• Intermediate or Medium term loans: Medium-term loans have repayment periods of one to five years. These loans are available from online lenders, as well as banks and credit unions. Although these products may have higher requirements and be slower to fund than short-term loans, they're usually much more affordable.
• Long term business loans: Although in some instances medium-term and long-term loans are used interchangeably, in general, long-term loans are those with terms longer than five years. Some of the most notable long-term loans are SBA loans with terms of up to 25 years. Long-term loans require top borrower qualifications and are slow to fund, but also offer the lowest interest rates. These Columbiana Alabama term loans almost always are issued by traditional lenders like banks and credit unions.

As you can see, although business term loans are often broken up into these categories, you'll want to keep in mind that they can also be differentiated by their issuer business loans, credit union loans, online loans, etc.