Bank loans

Banks are the largest business lending institutions and probably the first place you think of when getting a small business loan. While bank term loans are some of the lowest-cost types of financing available, it can sometimes be difficult to qualify: many require high credit scores and longer time in business than alternative lenders do. But if you are able to qualify for a traditional bank loan, it can be an affordable way to maintain cash flow or get funds to expand your business.

Bank Loan Details

LOAN AMOUNTS

$250,000 – $1 million

INTEREST RATES

4% – 13%

REPAYMENT TERMS

3 – 25 years

TURNAROUND TIME

2 weeks – 6 months

Pros

  • Very low, fixed interest rates
  • Predictable monthly payments
  • Helps build business credit
  • Professional banker relationship
  • Lending available for many uses

Cons

  • Lengthy paperwork
  • Longer wait time
  • Requires strong credit
  • Usually requires specific collateral

Banks usually require strong personal and/or business credit scores, a personal guarantee, collateral, and healthy financials. And applying also takes serious effort and time: the whole process can last about one to three months.

Still, if you are able to qualify for a traditional bank loan, it can be an affordable way to maintain cash flow or get funds to expand your business.