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6 Best Long-Term Business Loans For Small Businesses

Looking for a loan for your small business? These lenders offer term lengths of more than three years, plus low interest rates.

    Shannon Vissers
  • UPDATED

Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Long-term business loans are desirable to many business owners looking to finance a major expenditure. Long-term business loans can be used to expand business operations with a long-term investment, such as a new location, or to acquire an existing business. Though a long-term business loan gives you a longer period of time to repay your debt, an extended business loan term length also has its downsides.

Learn whether a long term loan is right for your needs and see the best long-term small business loan options currently available.

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CompanyTerm LengthNext StepsTerm Length
BusinessLoans.com

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  • Offers: Term loans
  • Max. borrowing amount: $3 million
  • Max term length: 5 years
  • Offers: Term loans
  • Max. borrowing amount: $3 million
  • Max term length: 5 years

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Funding Circle

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  • Offers: Term loans & SBA 7(a) loans
  • Max. borrowing amount: $500K
  • Max term length: 10 years
  • Offers: Term loans & SBA 7(a) loans
  • Max. borrowing amount: $500K
  • Max term length: 10 years

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Lendio

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  • Offers: Term loans, SBA loans, business acquisition loans
  • Max. borrowing amount: $5 million
  • Max term length: 30 years
  • Offers: Term loans, SBA loans, business acquisition loans
  • Max. borrowing amount: $5 million
  • Max term length: 30 years

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SmartBiz

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  • Offers: Term loans, SBA loans, custom financing
  • Max. borrowing amount: $350K
  • Max term length: 10 years
  • Offers: Term loans, SBA loans, custom financing
  • Max. borrowing amount: $350K
  • Max term length: 10 years

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Upstart

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  • Offers: Personal loans
  • Max. borrowing amount: $50K
  • Max term length: 5 years
  • Offers: Personal loans
  • Max. borrowing amount: $50K
  • Max term length: 5 years

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Live Oak Bank

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  • Offers: Term loans & SBA loans
  • Max. borrowing amount: $15 million
  • Max. term length: 25 years
  • Offers: Term loans & SBA loans
  • Max. borrowing amount: $15 million
  • Max. term length: 25 years

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Table of Contents

What Are Long Term Business Loans?

Long-term business loans are loans used to finance large, long-term business investments over many years. Term lengths for this type of business loan tend to range from 3 to 10 years—or up to 25 or 30 years for real estate business loans. Interest rates tend to be lower than those for short-term loans, though borrower requirements may be more stringent.

When To Use A Long Term Business Loan

You’re a business owner, and you’ve encountered a financial hurdle in the form of a large business expense. This expense could be completely unanticipated, such as the sudden breakdown of equipment, or it could be planned, such as a business expansion through improving your facilities, or purchasing commercial real estate.

No matter what it is, a big expense can be difficult to pay upfront. When it’s an unexpected or emergency expense, the situation can be even worse. However, many smart business owners have found a solution for these large expenses: long-term business loans.

If spreading out the cost of a major expense or investment over a longer period sounds appealing to you, this financing option may be the right choice for your business.

You can also use a long-term loan to buy a business.

3 Types Of Long-Term Business Lenders

Most business owners turn to three main sources for their long-term financing needs: Small Business Administration lenders, banks and credit unions, and alternative/online lenders.

SBA Lenders

The SBA offers several long-term loan programs. The most popular is the 7(a) program, which offers up to $5 million for almost any purpose with a maximum repayment term of 10 years. Falling under the 7(a) umbrella is the Community Advantage Loan which offers the same competitive rates and terms for businesses in underserved communities, while the Veterans Advantage program offers long-term loan options for military veterans and service members.

The SBA Microloans program is another option for smaller financing needs. These loans provide up to $50,000 that can be repaid over a maximum term of six years.

For businesses that want to improve their facilities or purchase real estate, 504 loans provide 40% of funding toward these projects. A maximum of $5 million can be distributed through this program, with repayment terms set at a maximum of 25 years.

SBA loans can be obtained from intermediary lenders, including SBA-approved banks, credit unions, nonprofits. and alternative lenders.

Loan ProgramDescriptionMore

7(a) Loans

Small business loans that can be used for many many business purchases, such as working capital, business expansion, and equipment, inventory, and real estate purchasing.

Review

Microloans

Small loans, with a maximum of $50,000, which can be used for working capital, inventory, equipment, or other business projects.

Review

CDC/504 Loans

Large loans used to acquire fixed assets such as real estate or equipment. 504 Loans are offered in partnership with Community Development Companies (CDCs) and banks.

Review

Disaster Loans

Loans used to rebuild or maintain business following a disaster. 

Review

Banks & Credit Unions

Banks are a very popular source for obtaining long-term business loans because of low interest rates and favorable terms. However, qualifying for these loans can be difficult. Credit scores must be very high, the application and approval process can be lengthy, and banks often have strict requirements in terms of time in business and annual revenues. Businesses that do qualify, however, will find bank loans are easily one of the most affordable loans on the market.

Credit unions also offer very competitive rates and terms, and many businesses prefer to work with these lenders because of the more personalized service they receive. Credit unions may have a bit of flexibility in terms of their requirements, but all borrowers should come to the table with a high credit score and a stable business history.

Alternative Lenders

Alternative lenders offer some benefits that banks, credit unions, and most SBA intermediaries do not, including fast funding and lower credit score requirements. However, there are also several drawbacks to working with alternative lenders (also sometimes referred to as “online lenders”). Higher interest rates are one of the biggest drawbacks. Lower maximum loan amounts are another.

Most alternative lenders set their maximum repayment terms at five years. Depending on the amount borrowed, this could mean higher monthly payments, especially with higher interest rates.

However, the return on investment may be enough for a business to move forward with one of these loans. These loans are best for businesses that don’t meet other lenders’ qualifications, including but not limited to credit score, time in business, or annual revenue.

The 6 Best Long Term Loans For Businesses

The best long-term business loans are from SBA lenders, banks, and reputable online lenders. Here are our top picks for small business long term loans for a variety of business needs and funding requirements, with term lengths ranging from 3 to 30 years.

1. BusinessLoans.com: Best Long Term Business Loans For Bad Credit

BusinessLoans.com


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Pros

  • High borrowing amounts
  • No minimum credit score to qualify
  • Get matched with multiple loan offers from a single application
  • Open to newer businesses

Cons

  • Shorter term length than SBA loan
  • Fees may be high if you have bad credit

Why We Chose BusinessLoans.com For Long-Term Business Loans

BusinessLoans.com is an alternative business lending service catering to all business types, including businesses with bad credit, as there is no minimum credit score to apply. Simply submit a quick online application and be matched with up to 5 different loans. Loans can be as large as $3 million, and you can potentially receive a 5-year business loan within 24 hours.

BusinessLoans.com Services

Both short- and long-term business loans are available through BusinessLoans.com. Note that BusinessLoans.com doesn’t originate loans, but rather, they connect you with lenders from their lending network.

BusinessLoans.com Rates & Fees

BusinessLoans.com interest rates on term loans start at 9%.

BusinessLoans.com Eligibility Requirements

BusinessLoans.com requires 6 months-1 year in business and $100K-200K in annual business revenues. As mentioned, BusinessLoans.com has no minimum credit score requirement.

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2. Funding Circle: Best For Established Businesses

Funding Circle


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Pros

  • Fast time-to-funding
  • Monthly repayments
  • No prepayment penalty
  • Can qualify with credit score under 700

Cons

  • Not for startups
  • Low max. borrowing amount

Why We Chose Funding Circle For Long-Term Business Loans

Funding Circle is an online business lending marketplace that matches businesses to suitable long-term business lenders, putting funds in your account in as little as two days. By applying to Funding Circle, established businesses can quickly access long-term loans up to $500,000, with term lengths of up to 7 years, or an SBA loan as large as $350K with a term length up to 10 years.

Funding Circle Services

Funding Circle’s long-term loan offerings include traditional business term loans, as well as SBA 7(a) loans. However, not all businesses will qualify for an SBA loan or for a long-term loan through Funding Circle—their shortest term is actually just 6 months.

Funding Circle Rates & Fees

Funding Circle SBA loans currently have a flat interest rate of 8.0% (Prime + 2.75%); pricing for FC’s business term loans isn’t listed.

Funding Circle Eligibility Requirements

To qualify for Funding Circle, you’ll need a 650 credit score for SBA loans or 660 for a business term loan. SBA loans also require 2 years in business and $400K in annual revenues.

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3. Lendio: Best For Large SBA Loans

Lendio


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Pros

  • Multiple long-term financing types available
  • Network includes Preferred SBA Lenders
  • High borrowing amounts
  • Accepts credit scores as low as 600

Cons

  • Not all applicants will be matched with long-term financing offers
  • Lengthy time-to-funding (as long as 1-2 months)

Why We Chose Lendio For Long-Term Business Loans

Lendio is another alternative lending service that matches business owners with loans online. With a simple 15 minute application, you can compare loan offers from up to 75 lenders in Lendio’s network, and potentially get funded within 24 hours (for certain loan types). Lendio offers multiple long-term business loan options, including long-term SBA loans as large as $5 million.

Lendio Services

Lendio’s long-term business loan options include SBA loans, business acquisition loans, and traditional business term loans.

Lendio’s term lengths are 10-30 years for SBA loans (including commercial real estate SBA loans); 10-25 years for business acquisition loans; and up to 5 years for business term loans.

Lendio Rates & Fees

Interest rates for Lendio SBA loans are based on the Prime rate and range from 4.51% for a 20-year 504 loan to 11.5% for a fixed-rate 7(a) loan. Rates for business term loans accessible through Lendio start at 6%, while business acquisition loan interest rates can be as low as 5.5%.

Eligibility Requirements

To qualify for a long-term loan through Lendio, you’ll need a credit score of at least 600, as well as 2 years in business and monthly business revenues of at least $8K. A couple exceptions: you only need 6 months in business to qualify for a Lendio commercial mortgage loan; and non-SBA business term loans more stringent credit score requirements (minimum 680).

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4. SmartBiz: Best For Smaller SBA Loans

SmartBiz


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Pros

  • Leading online business bank loan & SBA loan platform
  • Faster and easier than going through a bank
  • Accepts fair-credit applicants
  • Monthly repayments

Cons

  • Not suitable for startups or bad credit
  • Takes longer to get funded compared with other online loans

Why We Chose SmartBiz For Long-Term Business Loans

SBA loans and bank loans have notoriously lengthy applications and many hoops to jump through, but SmartBiz has streamlined the entire funding process by acting as an online intermediary. Essentially, SmartBiz combines the ease and speed of online loans with the longer term lengths and lower interest rates of traditional business loans. SmartBiz is ideal for businesses that want a smaller SBA loan (<$350,000).

SmartBiz SBA loans have 10-year terms, while their bank term loans have a maximum term of 7 years.

SmartBiz Services

SmartBiz is an online business lending service that specializes in SBA loans and bank term loans, specifically (though other loan types are also available).

SmartBiz online SBA loans range from $30,000 to $350,000; SmartBiz bank term loan amounts range from $30,000 to $500,000 and have term lengths of 2-5 years.

SmartBiz Rates & Fees

SmartBiz interest rates for SBA loans range from 11-12% (variable rate of Prime Rate plus 2.75% to 3.75%). SmartBiz bank term loans have interest rates starting at 8.99%.

SmartBiz Eligibility Requirements

To qualify for a SmartBiz loan you’ll need at least 2 years in business and a credit score of 650 for an SBA loan or 660 for a bank loan. SmartBiz says that most businesses that are funded through SBA lenders in the SmartBiz network have annual revenues of at least $50K.

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5. Upstart: Best For Startups

Upstart


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Pros

  • Startup-friendly
  • Bad-credit friendly
  • Funds are disbursed quickly
  • No prepayment penalty

Cons

  • Low borrowing amounts
  • High interest rates

Why We Chose Upstart For Long-Term Business Loans

Upstart personal loans range from $1K to $50K and mature after 3 or 5 years. Upstart loans have longer term lengths than most online loans, and may be a good fit for startup entrepreneurs who aren’t looking to borrow a very large amount. Upstart loans are also available to individuals who have poor credit or no credit.

Upstart Services

Upstart is an alternative lender that offers personal loans that can be used for business.

Upstart Rates & Fees

Upstart personal loans have fixed rates of 4.6% – 35.99% APR.

Upstart Eligibility Requirements

To qualify for an Upstart loan, you’ll need a minimum credit score of just 300, and your application may also be considered if you have insufficient credit history to produce a score.

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6. Live Oak Bank: Best Bank Loan

Live Oak Bank


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Pros

  • #1 bank for SBA loans
  • Available in all 50 states
  • Large non-SBA loans also available
  • Low interest rates

Cons

  • Requirements can be hard to meet
  • May require collateral

Why We Chose Live Oak Bank For Long-Term Business Loans

As a non-traditional bank, Live Oak Bank has some of the benefits of a traditional business lender, with the convenience of an alternative lender, making it an excellent bank for small businesses looking for long-term financing options, including term loans and SBA loans.

The bank has Preferred Lender Status, which allows SBA loans to be processed quicker, and was ranked #1 SBA 7(A) Lender by dollar amount for FY 2022.

Live Oak Bank Services

Live Oak Bank offers SBA 7(a) and SBA 504 loans to small businesses, as well as non-SBA business term loans. Loan amounts range from $150K to $15 million (non-SBA term loans max out at $7.5 million), with term lengths as long as 25 years.

Live Oak Bank Rates & Fees

SBA loan rates are based on the Prime rate, with a markup of up to 3.5%. Rates for non-SBA term loans are not disclosed.

Live Oak Bank Eligibility Requirements

To qualify for a term loan from Live Oak Bank, you’ll need at least 3 years in business and a 680 FICO. Business revenue requirements vary depending on loan type and amount.

Get Started With Live Oak Bank

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Short-Term VS Long-Term Business Loans

Short-term and long-term business loans have some major differences, and the differences are not just limited to the length of the term. Here are the major differences between short-term loans and long-term loans:

Long-Term Loans

  • Smaller Monthly Payments: Large expenses can be broken down into affordable monthly payments by taking out a long-term business loan.
  • Higher Borrowing Amounts (Usually): Long-term business loans often have higher maximum borrowing amounts of up to $1 million to $5 million. However, alternative lenders that offer long-term loans may not offer loans this large.
  • Lower Interest Rates: Borrowers with the highest credit scores can take advantage of interest rates as low as 5% (or sometimes lower), making this one of the most affordable loan options. The longer your term is, though, the more you will pay for the loan in total.
  • Collateral Requirements: For most long-term loans, business collateral is required. In some cases, the collateral will be the item being purchased with the loan proceeds, such as equipment, a vehicle, or real estate.
  • Higher Credit Score Requirements: A long-term loan can be one of the most difficult loans to obtain. A great credit score (with no negative items on your credit history) is required to get the most affordable funding. While some lenders may work with borrowers with lower scores, interest may be much higher and terms not as favorable.
  • More Documentation Requirements: Because long-term loans are often for very large amounts of money, lenders want to ensure that all borrowers can pay back the loan. This means that there is a lot of paperwork involved in the application process. Borrowers must come prepared to take the time needed to provide the lender with all documentation to qualify for the loan.
  • Longer Approval Process: Depending on the lender, getting approval for a long-term business loan could take weeks or even months — not ideal for a business that needs immediate funding.
  • Better For Long-Term Investments: Because you will be paying the loan off for a number of years, long-term loans are more suitable for long-term business investments. For example, you don’t want a 3-year loan to pay off 3 months of inventory.

Short-Term Loans

  • Much Shorter Term Length: While long-term loans have years-long terms, STL terms are measured in months or weeks. Any loan with a term length of one year or shorter is considered an STL, but many STLs have a term length of just 3 months.
  • Larger, More Frequent Loan Payments: Short-term loans usually require weekly or even daily repayments. And when the term is short, the repayments are large and can be difficult for some businesses to afford.
  • Lower Borrowing Amounts (Usually): Short-term loan borrowing amounts often cap out at $250,000 or $500,000, or sometimes less. Though that’s the max, most short-term business loans are for much smaller amounts—around $20,000.
  • Relaxed Borrower Requirements: These loans are much easier to qualify for than LTLs, in that they have low credit score requirements, low business revenue requirements, and minimal time-in-business requirements.
  • Higher Interest Rates & Fees: Short-term loans can be an expensive way to borrow capital. If you have bad credit, you might pay more than 50% of the borrowing amount. This means that on a $20,000 loan, you would be charged $10,000 in interest and fees, and will have to pay back a total of $30,000 over the next 12 months (or whatever your term length is).
  • Different Fee Structure: STLs usually have a different fee structure than standard term loans. Rather than charging interest in the traditional sense, the borrower is charged a fixed fee, called a factor rate. There’s also usually an origination fee that is taken out of your loan proceeds.
  • No Specific Collateral Requirements: You usually won’t have to put down any specific collateral, such as property or specific business assets. However, you will likely have to sign a personal guarantee and/or agree to a blanket lien before the loan is disbursed.
  • Shorter Approval Process: Short-term loans usually have a very fast approval process. You can often get approved the same day you apply and see your funds in your account as soon as the next business day. You do still need to fill out some forms and supply some documentation, but overall the approval and funding process is much quicker than with a long-term loan.
  • Better For Short-Term Investments: Because you’ll have to repay the loan quickly, short-term loans are better for short-term investments, such as payroll, inventory, or other working capital needs.

All in all, it doesn’t really make sense to say that long-term loans are better or short-term loans are better. It depends more on your specific situation—what you need the loan for, how soon you need the funds, and what type of financing you qualify for.

Long-Term Business Loan FAQs

What is considered a long-term business loan?

A typical long-term business loan will have a term length of between three and 10 years. However, certain types of long-term loans, such as SBA loans used to buy commercial real estate, may have term lengths of 20 years or more — 25 years in some instances.

What is the maximum term length I can get on a business loan?

Long-term loans for most business purposes tend to have a maximum term length of 10 years. Some lenders may only offer a 5-year business loan. However, some business loans, such as commercial real estate loans, can have term lengths longer than 20 years.

What interest rates can I expect on a long-term loan?

Your interest rate will depend on a number of factors, including your loan source, the loan amount, and your personal creditworthiness. Interest rates can vary from below 6% for bank loans offered to the most qualified borrowers, to over 30% for loans offered by alternative lenders to startup outfits or businesses with a poor credit history.

Why are long-term loans harder to get than short-term loans?

Because long-term loans tend to involve larger amounts of money and are more reliant on your business’s long-term health than short-term loans, the lender is taking on more risk. Therefore, lenders are more cautious when evaluating loan applicants when the loan in question is long-term.

Long-term loan vendors tend to prefer working with businesses with a significant track record of success. They’re also more likely to require high credit scores from applicants.

How do long-term business loans work?

A long-term business loan is a type of loan that you pay back over a longer period. The lender loans the borrower a set amount of money for business expenses, such as purchasing a commercial vehicle or real estate, buying equipment, or hiring new employees.

With the help of a long-term loan, the business does not have to pay a large sum out of pocket. Instead, a lender will provide the needed funding, which the business will pay back in fixed amounts over several years, along with interest and fees.

Is collateral required to get a long-term business loan?

Yes, long-term business loans usually require some form of collateral. The collateral might include some or all of your existing business assets, or the item you are financing with the loan, such as equipment or a business vehicle.

Final Thoughts On Long Term Business Loans

A long-term business loan can be a smart and affordable way to manage large expenses. However, to get the most out of this type of financing, it’s important to do your research to find the lowest interest rates and best terms. Taking some time to evaluate why you need the money and what kind of return you expect on your investment will help you choose the best small business loan to suit your long-term goals.

A major benefit of long-term business loans is you have longer to pay your loan off. Just remember that with a longer term comes a longer amount of time for interest to accrue—and some lenders will penalize you for paying off your loan early. If you are not sure about making such a long-term commitment, consider a short-term business loan instead.

In Summary: The 6 Best Long Term Loans For Businesses

  1. BusinessLoans.com:
    • Offers: Term loans
    • Max. borrowing amount: $3 million
    • Max term length: 5 years
  2. Funding Circle:
    • Offers: Term loans & SBA 7(a) loans
    • Max. borrowing amount: $500K
    • Max term length: 10 years
  3. Lendio:
    • Offers: Term loans, SBA loans, business acquisition loans
    • Max. borrowing amount: $5 million
    • Max term length: 30 years
  4. SmartBiz:
    • Offers: Term loans, SBA loans, custom financing
    • Max. borrowing amount: $350K
    • Max term length: 10 years
  5. Upstart:
    • Offers: Personal loans
    • Max. borrowing amount: $50K
    • Max term length: 5 years
  6. Live Oak Bank:
    • Offers: Term loans & SBA loans
    • Max. borrowing amount: $15 million
    • Max. term length: 25 years
Shannon Vissers

Shannon Vissers

Expert Analyst & Reviewer at Merchant Maverick
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
Shannon Vissers
View Shannon Vissers's professional experience on LinkedIn.

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