A business term loan is a lump sum of money you borrow from a lender, and paid back at a fixed interval— with interest — over a set period of time. Many businesses choose term loans because they don’t want to dip into their capital reserves but would rather allow a lender to finance their capital use (projects and business capital needs) at a fair price. In most cases you’ll pay off the loan monthly, however other payment terms might be available on a case-by-case basis for example, some lenders offer daily, weekly and bi-weekly repayment options in addition to monthly options. Repayment periods generally begin at 12 months and last up to 10 years.
Interest rates also vary by lender and by market conditions, but they can be either fixed or variable. Fixed rates stay the same, while variable rates change depending on the state of the market.
