There is no definite period for a business loan. It depends on the value of the loan and the term length that you have agreed upon with lender. Your repayment also depends upon the type of loan you have taken out.
Understand various loan categories without being a financial expert through definitions mentioned below.
1. Term Loans: Short, medium or long term – these loans can be of any length. While short term loans are meant to be repaid in 3-18 months, medium term loans must be paid back in 1-5 years. Long term loans normally extend from 7 to 10 years. You can avail short term loans via alternative lenders; however, the long term loans are mostly availed through banks.
2. SBA Loans: Small business administration loans are supposed to be the most affordable and accessible business loans, as they offer competitive interest rates and are government-backed. These loans are available through lenders partnering with the Small Business Administration, including banks and alternative lenders.
3. Business Lines of Credit: The repayment terms for this vary by the lender. It usually is between 6 months to 2 years for a business loan via alternative online lenders. However, longer terms can go up to 5 years through a conventional bank.
4. Equipment Financing: These loans do not exceed the life of the equipment, and thus, equipment loans have a repayment period between 1 to 5 years. Equipment financing is available through conventional as well as alternative lenders.
5. Microloans: Also referred to as micro credit, these are small loans that are issued by individuals rather than banks or credit unions. These microfinance institutions are financially empowered by banks to support low-income earners and MSMEs.