5 Best Long-Term Business Loans of 2023

Commercial Real Estate Loans

If you’re looking to invest in real estate for your business, a commercial real estate loan can provide the funding you need. These loans can be used to purchase, refinance, or renovate commercial properties. The loan amount can vary widely and minimum credit score can range from 600 to 650, depending on the lender. Pros: The property itself can act as collateral, making it more likely to be approved. Cons: The property can be taken away if the loan is not repaid.

SBA 7(a) Loan

The Small Business Administration’s 7(a) loan program is one of the most popular long-term business loans available in the United States. With loan amounts ranging from $50,000 to $5 million, this program can provide the funding you need to start or expand your business. The minimum credit score for an SBA 7(a) loan is typically around 640, and the loan can be used for a variety of purposes, including working capital, equipment purchases, and real estate investments. Pros: The SBA guarantees a portion of the loan, making it easier for small business owners to qualify for financing. Cons: The application process can be lengthy and paperwork-intensive.

Business Line of Credit

A business line of credit is a revolving line of credit that can be used for a variety of business expenses. It gives you the flexibility to borrow only what you need, when you need it, and pay it back over time. The minimum credit score is typically around 600 and loan amount can vary. Pros: It is flexible and can be used for various business expenses. Cons: Interest rates can be high, and you could be charged fees for not using your line of credit.

Equipment Financing

For businesses that need to purchase new equipment, equipment financing can be a great option. This type of loan allows you to borrow the funds you need to purchase equipment, and then pay it back over time with interest. Many equipment financing loans have terms that range from 2 to 5 years. The minimum credit score can vary, but typically around 600-650. Pros: The loan is secured by the equipment being financed, which means that the lender may be more willing to lend to you even if you have a lower credit score. Cons: If your business is struggling, you may be required to give up the equipment as collateral.

Merchant Cash Advance

A merchant cash advance (MCA) is a short-term loan that is based on your future credit card sales. You receive a lump sum of cash upfront, and then pay it back over time with a percentage of your daily credit card sales. The minimum credit score can vary, but typically around 500-550. Pros: It is easy to qualify, even with bad credit. Cons: The interest rates are typically high, and the repayment structure can be inflexible.

While there are many long-term business loans available in the United States, each one has its own set of pros and cons. By considering your business’s specific needs and your own creditworthiness, you can select the loan that is right for you.