How to get a term loan

When it comes to how to get a business loan, there are a number of factors to consider, including how much funding you need and repayment terms. For term loans, you’ll also need to demonstrate profitability and longevity, plus meet the eligibility requirements, such as a minimum credit score. 

One of the most important decisions is choosing which type of lender you want to work with. 

3 types of lenders that provide term loans for commerce

Banks

Many private banks offer term loans for businesses. They tend to offer low interest rates, but securing those rates often involves stringent requirements, like a history of profitability, a high credit score, and even collateral. These factors take time to verify and approve. What’s more, some banks might only offer large term loans, refusing to lend less than $500,000.

Fintech companies and online lenders 

If you’re looking for a quick infusion of cash into your business today, there are a number of financial technology (fintech) companies and online lenders. They offer same-day or next-day approval for short- and medium-term loans, without the requirements traditional banks might ask for. This convenience comes at a cost, usually in the form of higher interest rates and fees, as well as shorter repayment terms.

Shopify Lending

Shopify offers easy access to working capital financing through term loans, which are exclusively available to Shopify merchants. Eligibility for financing requests is determined by sales history within Shopify and engagement with the Shopify platform. Once you apply, Shopify underwriting will review the application to confirm whether your store is eligible to receive the amount of financing requested and whether you can customize the loan with weekly or monthly payments.