What is the Average Repayment Period on a Small Business Loan?

When it comes to long-term loans, the repayment period can vary depending on the lender and the purpose of the loan. Generally, small business loans have a repayment period of five to seven years. Short-term loans are usually repaid within three to eighteen months, while medium-term loans can be repaid in one to five years. Longer-term loans with banks are usually extended up to seven years, and in some cases even up to ten years.

Before you apply for a secured loan, it is important to consider if this type of loan is the right choice for you. If you cannot make the payments on a secured personal loan, you could end up losing the assets you provided as collateral. Not all applicants will qualify for larger loan amounts or the most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements, which will vary from lender to lender.

Small business loans are offered through lenders that partner with the Small Business Administration (SBA). The repayment period of an SBA loan depends on the value of the loan and the duration of the loan that you have agreed with your specific creditor. When looking for financing, it is important to determine the amount of loan you'll need and the repayment period you're comfortable with. The more qualified your company is with respect to creditworthiness, the more favourable commercial loan terms you can opt for.

Most lenders opt for an automatic repayment system, in which your payments are deducted directly from your bank account via ACH. National Funding offers affordable financing for small businesses with reasonable rates, zero guarantees and a quick deposit upon approval. Understanding what makes one business loan option different from another will help you make decisions about which one is best for your financing needs. In most cases, you're expected to start repaying your business loan “immediately”.

Some lenders allow you to skip a certain amount of payments, which will then be added to the end of your payment schedule.