Business Term Financing
A defined amount of capital repaid on a defined schedule, generally used for a specific and identifiable purpose.
- Structure
- Set amount, set schedule
- Best when
- Cost and purpose are clearly defined
- Request range
- $50,000 to $5 million
Term financing is the most straightforward structure in business finance. A set amount is provided, and it is repaid over a set period on a defined schedule. The clarity is the point, since the owner knows the obligation on day one and can plan around it.
This structure tends to fit purposes with a defined cost and a reasonably predictable return, such as a build out, an acquisition of assets, or a planned expansion into a second location.
A typical situation
A medical practice finances a suite build out with a known contractor cost and a known opening date.
When this usually comes up
- A specific project has a known total cost
- The investment is expected to produce revenue over multiple years
- The owner wants a fixed schedule for budgeting purposes
- Several smaller obligations are being consolidated into one plan
- Growth is planned rather than reactive
Common uses
- Building out or renovating a facility
- Opening an additional location
- Purchasing a book of business or a competitor's assets
- Large technology or systems implementation
- Restructuring existing business obligations into a single schedule
What gets reviewed
Review varies by request. In general, the items below carry the most weight in this category, and having them ready shortens the conversation considerably.
- 01Time in business and revenue history
- 02Business bank statements
- 03Purpose of funds and supporting documentation for the project
- 04Existing obligations and payment history
- 05Ownership and entity details
Before you commit
Tie the schedule to the return
A second location does not produce full revenue in its first month. When the repayment schedule and the ramp up period are considered together, the plan holds up better under pressure.
Build in room for the unexpected
Construction, permitting, and equipment delivery rarely land exactly on the original timeline. Owners who size the request with a modest allowance for delay usually avoid a second conversation three months later.
Document the project
Quotes, contracts, and a written scope give a clearer picture during review and make it easier to explain what the capital is for.
Often a fit when
Defined projects with a known cost and an expected multi year benefit.
Usually not the right tool when
Short term timing gaps that resolve within a single collection cycle.
Questions about business term financing
Tie the schedule to the return
A second location does not produce full revenue in its first month. When the repayment schedule and the ramp up period are considered together, the plan holds up better under pressure.
Build in room for the unexpected
Construction, permitting, and equipment delivery rarely land exactly on the original timeline. Owners who size the request with a modest allowance for delay usually avoid a second conversation three months later.
Document the project
Quotes, contracts, and a written scope give a clearer picture during review and make it easier to explain what the capital is for.
Talk it through before deciding
If you are weighing this against another structure, say so in the application. It is a better conversation when we know what you are comparing.