1st Source Small Business Loans
Things are looking up for businesses that are ready to expand and that are in need of financing. With interest rates hovering near their historic lows, now may be the best opportunity to lower your overall financing costs. If your business is need of working capital for expansion, acquisitions, equipment purchases, or simply to meet growing operating expenses, it would be worthwhile to review the different types of business loans 1st Source is offering our businesses today.
Small Business Term Loans
The best way to take advantage of low interest rates is with term loans which have always been the commercial loan of choice for both borrowers and lenders. Because they are usually issued with fixed rates and monthly or quarterly repayment schedules, they provide businesses with predictability for cash management and financial projections. There are several varieties of small business term loans, the two most widely used are intermediate-term and long-term loans.
Intermediate-term loans: With a maturity of three years or less, these loans are structured more like an installment loan with fixed monthly payments and, in some cases, a balloon payment at the end. The actual length of the loan term is sometimes based on the useful life of the underlying asset that is being financed.
Long-term loans: Loans with maturities of more than three years are considered to be long-term. Some maturities are as far out as 20 years, but most range between three and ten years. Generally, these loans require collateral which is usually the assets of the business. Most arrangements require that the business put down as much as 20% towards the total amount of the loan.
In both cases, small business term loans are best suited for small businesses that have achieved a certain level of financial stability and are seeking to expand their operations by constructing new facilities, buying an existing business, or making a substantial capital investment in equipment.
Our small business term loans offer long-term financing for larger investments, like equipment, commercial vehicles or other capital improvements.
Features & Benefits of 1st Source small business term loans
- Purchase fixed assets, restructure debt, or provide for ownership change and recapitalization
- Debt can be repaid over a longer term that more closely matches the useful life of the asset being purchased
- Longer repayment terms can be tied to your company's ability to generate cash, in case of a permanent line conversion or recapitalization
- Amortization and maturity dictated by purpose, usually not exceeding five years
- Competitive variable or fixed interest rates
Commercial Real Estate Loans
Allows for the purchasing of a facility for the operation of business.
Finances business facility improvement or expansion as your business grows.
Available for agricultural land, livestock, crops, equipment and machinery, as well as lines of credit to meet seasonal funding needs.
Because a significant amount of the costs can be recovered through depreciation allowances, the business should seek guidance from a tax professional to ensure they can take full advantage of available tax benefits.
If you are considering financing your business expansion now or in the future with a small business loan, we encourage you to sit down with one of our business lending specialists to discuss which loan options would best meet your needs. Contact one of our business specialists today to schedule your consultation. Call 1(800)513-2360 or visit one of our banking centers.
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