When a business needs a specific amount of money for a specific purpose, a term loan is often the most straightforward way to get it. Here’s how these loans work, who they suit, and what the application process looks like.
What Is a Term Loan, and How Does It Work?
A term loan gives a business a lump sum up front, which it repays in fixed monthly installments over a set period. Because the payment amount and schedule are known from the start, this loan allows you to plan your cash flow around it without surprises.
Globelend’s term loans range from $25,000 to $500,000, with repayment terms between 6 months and 5 years and rates starting at 10.25%. A single one-time origination fee applies, and there are no prepayment penalties. If a business repays early, it only pays interest for the time the money was actually borrowed.
That structure sets term loans apart from other options. A line of credit is revolving, so a business borrows and repays as needed. An SBA loan can offer longer terms but typically involves a slower, more document-heavy process.
A term loan sits in between: a defined amount, a defined timeline, and a faster path to funding.
Who Are Term Loans For, and Who Qualifies?
Term loans work best for a defined expense with a clear payback. Common uses include:
- Improving cash flow
- Hiring additional staff
- Renovating a location
- Expanding the business
- Covering a one-off cost
- Repairing or buying equipment
These types of loans suit established small businesses of all kinds, including franchise operators who know what they need to fund and can show how the business will cover the monthly payment.
On qualification, lenders generally review a few core factors: how long the business has operated, its revenue and cash flow, the owner’s credit history, and any existing debt. Each lender weighs these differently, and Globelend reviews applications individually, so the best way to find out where a business stands is to speak with them directly instead of assuming a fixed cutoff.
How to Apply and What to Expect
The process is designed to be quick:
- Apply online. The application can take as little as 6 minutes.
- Hear back. A loan specialist reviews the submission and walks the applicant through next steps.
- Get a decision. Once all required documents are in, an underwriter reviews the application and may have follow-up questions about the business. A decision can come within 24 hours.
- Get funded. Once you sign the terms, the funds can arrive the next business day.
Each applicant is also assigned a dedicated account manager who helps identify goals and recommend the right type of loan.
A term loan isn’t the only option, and it isn’t always the best fit. A business that needs flexible, ongoing access to capital may prefer a line of credit, while one financing larger or longer-term needs, such as commercial real estate, may benefit from an SBA loan.