How it works
A term loan gives your business a lump sum for a defined purpose, then you repay it over an agreed period. It can be useful when you can estimate the amount you need and how the investment should pay for itself.
Picture this
A contractor wins several larger jobs and needs materials and added crew capacity before customer payments arrive. A term loan may give the business a set amount to cover that planned ramp-up, with payments it can budget for.
Example only. The right product depends on your business and the terms offered.
When it may be worth exploring
- A project or purchase with a reasonably clear cost
- An expansion, renovation, or inventory investment that supports expected revenue
- A business that can comfortably handle the scheduled payments
What to compare in an offer
- Total dollars repaid, including interest and any fees
- Payment size and frequency, and whether the rate can change
- Collateral or personal guarantee requirements
- Any rules or charges for paying the balance early
Common questions
How is a term loan different from a line of credit?
A term loan generally provides funds up front and follows a set repayment schedule. A line of credit can allow draws over time, subject to its limit and terms.
Can I use it for working capital?
Many term loan products allow eligible working capital uses. The permitted purpose depends on the lender and offer.
How do I decide what payment I can afford?
Look at ordinary and slower months, not just your best month. Leave room for payroll, taxes, existing debt, and unexpected expenses.
This page is general information, not an offer or approval. Products, eligibility, rates, fees, and terms vary by lender and applicant. Altora Capital Group is an independent referral partner of ROK Financial.