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Typical Loan Terms

    • 4 posts
    January 13, 2009 10:50 AM EST
    Does anyone know the current typical terms?  8% interest?  I am considering borrowing $40k.  How long are startup business loans usually for 4 years? 10years? 20 years?  I would obviously like to take the longest term possible to minimize the montly payment.
    • 4 posts
    January 13, 2009 11:58 AM EST
    It would be for a frachising fee mostly and other incidentals (advertising, etc.)  I have some liquid capital but I would prefer to take a loan rather than exhaust my savings.  Thanks.
    • 1 posts
    November 15, 2011 9:06 PM EST

    Thanks for sharing this post with us. The post is really interesting. Keep posting the good work in future too.

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    Business Loan

    • 64 posts
    July 28, 2011 6:54 AM EDT

    It depends on what you negotiate.  Most stated rates and terms are a starting point.  Ask your lender then negotiate.

    Terms are usually based on need or useful life of the asset being financed - if any.

    Rates are based on costs of funds from the lender and risk of the borrower.

    Typically, unsecured loans are higher interest with terms of three year or less.  Working capital loans usually have terms under 12 months.  And asset based loans depend on the useful life of the asset - most equipment 5 to 7 years and real estate from 10 to 20 years.

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    Business Money Today
    Small Business Loans & Start Up Loans

    • 31 posts
    January 13, 2009 11:11 AM EST
    Hi,
    It depends on what the loan is for. Can you provide some info on how you plan to allocate the $40k?
     
    Thanks!

    ---
    Need Capital For Your Business...Start Here!
    http://www.startupsmart.net
    Joe F. Clark
    Senior Principal
    Start-Up Smart, LLC. - the clever way to accelerate your business
    jclark@startupsmart.net

    • 31 posts
    January 14, 2009 3:23 AM EST
    Hi,
     
    Good explanation from Robertj. He`s right about the franchise companies as well. Typically, they will have some type of vehicle that can help you with financing.
     
    Regarding your "liquid capital," chances are you will have to use that to get a loan. Banks require some skin in the game.
     
    Good luck!

    ---
    Need Capital For Your Business...Start Here!
    http://www.startupsmart.net
    Joe F. Clark
    Senior Principal
    Start-Up Smart, LLC. - the clever way to accelerate your business
    jclark@startupsmart.net

    • 1 posts
    February 15, 2012 11:43 AM EST

    I agree with most people on this forum, something i would like to warn you that i wrote on my blog Everyday Loans is that you have to make sure you understand what you are getting yourself into. The longer the period of the term the more you will be paying in interest. They do this because they have to wait longer to get their money back, so be sure you know about your business, make sure you have a business plan, make sure you know how long it will take you to get that 40k or whatever back. Don't go into this unprepared this can scar your credit history for a long time.

     





    • 106 posts
    December 2, 2011 10:00 PM EST

    It depends on the type of loan and there are various types of loans available, all you need to provide is worthy collateral.

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    • 1 posts
    December 22, 2011 10:33 PM EST

    No doubt you are familiar with the expression “You have to spend money to make money” where a business is concerned. The concept of borrowing money from banks, credit agencies, and other types of lenders for the purposes of making money is nothing new. It is a relatively basic principle that has been with us since the early business and trading days. New business owners oftentimes need some form of cash loans financing to get up and running in their small business. On the other hand, existing businesses use financing venues in order to buy more inventory or assets, expand their business, or hire more employees.

  • April 17, 2010 2:46 AM EDT

    Rudy,

    Give me a break - a $500,000 unsecured loan? Even with a 720+ FICO, no collateral. Granted you say "... up to $500K."

    Besides, how legit can you be by suggesting contacting a gmail account?

    • 927 posts
    January 13, 2009 1:12 PM EST
    elvis,
     
    Generally, the term of a business loan is around 7 years. If the purchase of real estate is included in the loan - this can extend it out to 20+ years.
     
    Interest rates will range from prime plus 1 to plus 5 depending upon many factors.
     
    NOTE: generally most companies offer some type of financing to the folks who purchase a new franchise.
     
    Send me a PM if you want to discuss your specific needs.

    ---
    Business Growth Masters, LLC -
    Capital Catalysts for Entrepreneurs
    Home of the Scalable Business Plan and QuikStart Capital Programs
    http://www.bizgrowthmasters.com
    info@bizgrowthmasters.com


    • 110 posts
    November 29, 2011 8:23 PM EST

    Hi Elvis,

    What type of loans have you been looking at? I think the type of loan you are considering will play a who huge role in what is considered typical.

    Are you taking out a HELO? Are you looking at Peer to Peer lending? Are you contacting Angel investors? Do you have family and friends with resources?  There really is such thing as a typical loan term in todays day and age of alternative and creative lending and it really matter which loan avenue you are planning on taking.  Once you determine your loan path it will be much easier to tell you what is typical for that industry or niche.

  • July 31, 2013 1:00 PM EDT

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    • 12 posts
    December 12, 2013 7:30 AM EST

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