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Term loans

A known amount, repaid on a known schedule. The simplest thing we place, and the right answer more often than people expect.

Amount
$5,000 – $2,000,000
Term
6 – 60 months

When it fits

  • You know what the money is for and roughly what it will return — a second location, a hire, a rebuild.
  • You would rather have one payment to plan around than a limit to manage.
  • The spend happens once.

When it does not

If the gap is that some months are lean rather than that you need a lump sum, a line of credit costs less, because you only pay for what you draw.

What it looks like

What arrives
The full amount, once, into your operating account
What leaves
The same payment every week or month, for the term
Security
Usually none pledged; a personal guarantee is common
Early repayment
Varies by lender — ask before you sign
The full amount, onceShape, not price
full amountnothing owed

What you still owe

The same payment, every period

It arrives once and comes down in a straight line. Every payment is the same, so it plans around easily.

Drawn over a full term. Illustrative — your amount, term and payments come from the offer.

What people get wrong about it

Borrow the most you are offered.
You pay for the whole amount whether or not you use it. Borrow what the thing costs; a lump left sitting in the account is the most expensive money on this page.
A longer term is cheaper because the payment is smaller.
A smaller payment over more months is more money in total, not less. Compare the total repayment, which is quoted to you in dollars, rather than the payment.
Pay it off early and you save the rest of the interest.
Sometimes, and sometimes not — it depends on the lender, and on whether the cost was quoted as one total or accrued over the term. Ask before you sign.

What people spend it on

  • A second location, or a bigger one
  • A hire you need before the revenue arrives
  • Paying off something that costs you more
  • A rebuild, a refit, a rebrand

Pick this over a line of credit when you know the number.

Concentrated male carpenter using sander to polish wooden plank while working at table in professional joinery with stack of planks

Start on a laptop, finish on your phone

You say how much you need and what it is for. The same file reaches the lenders most likely to fund it, and it saves as you type.

The funding step of a Spark application, with an amount entered and a one-line note saying what the money is for.
The same application open in the Spark iPhone app, showing each step and which are complete.

How to get one

Five steps. About ten minutes, most of it finding your statements. One file goes to the lenders most likely to fund it — you don't apply four times.

  1. 1Make an accountBusiness email, name, phone, password. Two minutes.
  2. 2Answer eleven short questionsWhere you are based, what you bring in, how much you need. It saves as you type.
  3. 3Send six months of bank statementsPDFs from your bank. This is the part underwriters read.
  4. 4Add your paperwork and verify your IDIncorporation documents, the owners, and a photo of your licence.
  5. 5Send itMost decisions come back within one business day.

This one against the other three

You don't have to pick — send one application and we come back with the one that fits. But if you are weighing them up, this is how this one differs from each of the others.

versus revenue-based line of credit

Take the term loan when you know the number. A line costs less if the real problem is that some months are lean, because you only pay for what you draw — but you cannot draw a lump you have already spent.

Amount
Up to $500,000
Term
Revolving

versus asset-based lending

Asset-based costs less and takes longer. If you have receivables or stock worth pledging and three weeks to arrange it, use that. If you need it settled this week, this is the one.

Amount
$50,000 – $2,000,000
Term
Revolving or fixed

versus equipment financing

If the money is buying one machine, equipment financing usually prices better, because the machine secures it. A term loan is what you want when the spend is spread across several things, or across no thing at all.

Amount
$10,000 – $1,000,000
Term
12 – 72 months

What it costs

In dollars, before you sign. The amount. The total you'll repay. The payment. How many payments. Multiply the last two and you're back at the total — that's the whole of it.

No rate to compound out yourself. Read the agreement for the fees the lender charges. If a number on an agreement isn't obvious, call us before you sign it. That's what we're for.

A term loan is the easiest of the four to check, because nothing about it moves. One amount, one payment, one number of payments. Work out the payment against a normal month rather than a good one, and if it clears there, the rest of the term takes care of itself.

How this kind of money is priced →Reading an offer line by line →
An approved Spark application: the approved amount of $55,000, and a terms card showing total payback $69,300, a weekly payment of $1,333, and 52 payments.

An approved application. Amount, total payback, payment, number of payments — the four figures, before anything is signed.

What we need to place it

The same file whichever of the four it turns out to be. Most of the ten minutes is finding the statements, which is why it is worth doing first.

Nothing to value and nothing to schedule, so a term loan is usually the quickest of the four to get an answer on.

See what you qualify forNo hard credit pull · most decisions within one business day

Questions

The cost is quoted in dollars before you sign: total repayment, payment amount, number of payments. On a fixed-term deal those numbers are in the contract and do not change while you are paying on time. Read what the contract says about missed payments — that is the part that can move them.

Still deciding? Talk to a specialist — no application required.

See what you qualify for.

About ten minutes, most of it finding your statements. Applying never touches your credit score.

Takes about ten minutes, and applying never touches your credit score.