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Springfield Business Term Loan

Business term loans are among the favorite options for businesses because of their cost structure, variety, and many other features. If you have decided to apply for a business term loan in Springfield, Massachusetts, you should carefully evaluate the amount you want to borrow, the reasons for your business financing, as well as your needs.


Flexible and affordable, there are many types of term loans that come with predictable monthly repayments. This allows business owners to plan their payments ahead and minimize the fees while building a good credit profile. But before we go into details, let’s define what business term loans are and why more and more businesses are choosing them.

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What is a business term loan and why would you need it?

A business term loan is a sum of capital that you get at once, and need to pay back with a specific repayment schedule. Unlike a line of credit which you can use partially, term loans are fully used and come with different principal and interest rates, a “factor rate” which determines the fixed cost of the loan, and a few other details based on the type of the loan.


Speaking of types, there are short-term and long-term business term loans. However, in between, we also have a category of medium-term loans. All of these vary in duration, according to which short-term loans last anywhere from 6 to 12 months, medium-term loans have a lifespan of 1 to 5 years, while long-term loans are ones that are paid back more than 5 years, and in some cases, up to 25 years. The good thing about term loans is that you can use them for any of the following:

  • Expand your business or infrastructure
  • Cover work orders that are in need of more capital
  • Invest in new machinery or buy more equipment
  • Renovate or relocate to another location
  • Fund a large project
  • Hire additional staff


The best way to choose the right business term loan in Springfield, MA that aligns to your needs is to
talk with an expert business advisor. Also, keep in mind that you need a “clean” business profile so that you can get accepted for a long-term loan.


Short-term and long-term business term loans

If you are in doubt over which business term loan in Springfield to choose, you can see that every loan carries its own financing options. Short-term and long-term loans are different and offer unique eligibility requirements, loan amounts, and interest rates.


When applying for a short-term loan, it is important to have a solid credit history. If you have a poor credit rating, you will see that fewer options are available for a loan, and many of them include higher interest charges. Still, short-term loans are good for businesses with solid credit profiles and are a common way to finance a small investment or cover a debt.


Long-term loans are unlike short-term ones in the way that they have better interest rates and offer higher amounts. However, with a loan like this, you need to pay back the loan amount for a longer time and the amount you have to repay may be increased. Below, we are outlining some of the main differences between short-term and long-term business term loans.

Main Differences

1. Loan amount

One of the key differences between short-term and long-term loans is the loan amount, or the amount of capital that the lender will offer. This is based on the borrower’s business loan application, where each lender has different caps on their products.


Generally speaking, short-term loans have a cap up to $250,000, while medium term loans reach $300,000. With long-term loans, you can get anywhere up to $500,000 but obviously, the repayment period will take longer.


2. Repayment period

Next in the list of key differences between short-term and long-term loans is the period of the loan. Here, short-term loans have a repayment period that can last anywhere from 3 to 18 months. Long-term loans need to be repaid in more than 2 years, and in some cases, can be extended to 25 years.


The logic here is simple – if you want a high-capital loan that you can repay shortly, a short-term loan would be the better and more accessible option. Contrary to that, long-term loans offer longer repayment schedules with better interest rates.


3. Collateral

Long-term loans often require some sort of collateral from the borrower. This typically includes cash, real estate, equipment, or a blanket lien. That is why many see long-term loans as the more risky alternative. Still, some short-term loan lenders also require collateral, and that mostly depends on the years the business has been active, along with other details.


Even though these are the key differences, there are also the interest rates, fixed rates, and other metrics that make short-term loans different from long-term business loans. The best way to know which option to choose is by working with a loan specialist and identifying which category you are most eligible for.


Which To Choose: Short-Term Or Long-Term Business Term Loan?

The decision between short-term and long-term loans brings a lot of questions among business owners. Most of them are not sure which is the better option. The truth is, long-term loans are better if you need long to repay the amount, and want a solid interest rate over the months and years.


For some, however, short-term loans are easier to qualify for, especially with online lenders such as our platform at Business Loans Springfield. The best way to make a solid decision is by booking a consultation with some of our expert advisors.


We can answer all of your questions about loan amounts, application form requirements, short-term and long-term loan benefits, and more. Our team can also calculate the cost of your debt and show you how to get approved as soon as possible. Applying for a loan is very easy – all you need to do is
fulfill a form on our website and we will process your application within 1-2 business days.

(413) 287-1230
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