Best 15 Year Business Loans for Good & Bad Credit

How to Get a 15 Year Business Loan

Can you get a business loan for 15 years? Yes, you can get a 15-year business loan, however, the requirements that most lenders may have may be much more strict than other types of financing or shorter term loans. Lenders will expect to see some evidence that shows that your business has a demonstrated history of profitability and some success. They may also want to see a good amount of monthly revenue, and most likely, they will dig deep into your credit history to see how big of a risk you could be.

For a 15-year business loan, it may be more ideal to have an established business credit score that lenders can review, however, you could potentially still use your personal credit score. So, what is the difference between the two?

• Personal credit score: A personal credit score ranges from 300 to 850 and it is based on five essential elements. Your payment history, amount of debt owed, length of credit history, types of credit, and whether or not you have recently taken on new credit. 
• Business credit score: If your business is incorporated or possesses an EIN, then your vendors, creditors, and suppliers can report your on-time payments to the major credit bureaus. Having a good business credit score may get you more favorable terms with suppliers as well as increase your chances of qualifying for a business loan. 

Although you can still qualify for a business loan using your personal credit score, if you are able, it may be in your best interest to separate your business and personal finances as soon as possible. 

What can a 15-year business loan be used for?

Since a typical 15-year business loan may be for a larger amount, the loan ideally should be used at a time when your company is ready to expand. Maybe you need to renovate your office space to accommodate additional staff? Maybe you are trying to expand by acquiring other businesses or by purchasing additional real estate? All of these scenarios are exciting times for a business. In order to expand your business, you may have to make some significant investments. Additional space, additional inventory, upgrading your IT infrastructure, all of this costs money. A 15-year term business loan may be the key to acquiring the capital you need to take your business to the next level. 

Why Would You Need a 15 Year Term  Business Loan?

The main reason any business would need a 15-year term business loan is to stimulate growth. Even if you are looking for a loan to only increase your working capital, working capital can act as a growth stimulator by allowing you to take care of short-term expenses while you focus your revenue on long-term investments. Long-term investments that a business hoping to expand may want to make could include bringing in fresh new talent by hiring key persons in important positions. Or, maybe you need to purchase some specialized equipment to increase your company’s production volume of a top-selling product. Either way, there are thousands of ways you can utilize the funds from a 15-year term business loan, but more often than not, all of those pursuits are most likely in the name of expansion. 

Pros & Cons of a 15 Year Business Loan

Taking on a 15-year business loan is a big decision. It is a decision that should not be taken lightly. That is why it is most likely in your best interest to weigh all the pros and cons of taking on such a significant commitment. Here is a breakdown of some of those pros and cons that you may want to consider. 

Pros:

• Banks allow more freedom than investors: Investors may want to take a more hands-on approach or they may want more say in business decisions when they invest a significant amount in your business. If you have a solid business plan, a bank only decides the probability that they will be paid back in full. Once approved, banks or lenders leave you alone to run your business as you see fit to maximize return. 
• Banks are easier to access: Investors need to be enticed, banks simply need to see that they will be paid back for their loan, plus interest. There are thousands of lenders out there who may consider approving your business loan. There are much fewer investors and they are harder to find than lenders. 
• Better interest rates: Lenders that offer 15-year business loans will most likely lock you in at a better interest rate than other types of financing. Additionally, if you take on investors, a share of the profit may be expected to go to them. A bank or lender will only expect the agreed-upon APR. 

Cons: 

• Harder qualification process: Business loans are much harder to qualify for than a personal loan. Additionally, the process may require large amounts of paperwork and time on your part. 
• You may need to use assets to secure the loan: Qualifying for a 15-year business loan may require you to use company assets to secure the loan. If you happen to default on the loan, your assets could be repossessed by a lender to cover the cost of the loan. 
• You may not get approved for the loan amount you would have liked: If you have grand ideas for how you are to use the funds from a business loan, you may have to prepare yourself for not getting approved for the amount that you desire. Banks or lenders can potentially approve you for a lesser amount than you requested. 

Do you need good credit for a 15-year business loan?

If you do not have good or exceptional credit, you should at least be somewhere in the upper range of a fair credit score. If you are willing to secure the loan with significant assets or find a co-signer, you may be able to qualify for a 15-year business loan without a good credit score. 

What minimum credit score is needed to qualify for a 15-year business loan?

Most lenders require a personal credit score of 680 or higher or a business credit score of 155 or higher. The better your personal or business credit score is, the more likely you are to qualify for lower interest rates and more favorable terms. 

What is the interest rate on a 15-year business loan?

Average business loan rates can range from 2.54% to 7.02%. However, interest rates depend on many factors including the lender, the type of loan, your monthly cash flow, and where or not you use an asset as collateral. 

How much of a business loan can I qualify for?

15-year business loans typically can be for large amounts. Business loans can average anywhere from $13,000 to $1.2-million depending on the length of the loan, the size of the business,  and the credit history of the main applicant on the loan. 

Where to Apply for a 15 Year Business Loan

Before applying for a 15 year business loan you should check offers. When you officially apply for a business loan your credit will likely be affected. Getting pre-qualified by checking offers beforehand can help you find the best offer without impacting your credit score. At PrimeRates you can receive personalized business loan offers from top national lenders without impacting your credit score.