finance options - long term loans
Long term business loans
✅ Check your eligibility, no affect to your credit score
✅ Quickly apply online and compare offers from 100+ lenders
✅ Get support from a funding expert to secure the best offer
✅ Borrow larger amounts and spread the repayments over time
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TRUSTED BY 150K+ UK BUSINESSES
£2bn in funding approved
Regulated by the FCA since 2015
100+ UK business lenders
Why get a long term loan?
Borrow larger amounts
Borrow larger amounts Access the funds you need to really grow your business.
Lower interest rates
With a longer repayment term, interest rates are often more competitive.
Lower monthly repayments
Spread the cost of your loan to make repayments more manageable.
Flexible use
Use the funds for a wide range of business needs, from purchasing a property, to covering costs.
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What is a long term business loan?
A long term business loan is a type of funding that provides your business with a lump sum, which you repay over several years. The repayment period typically ranges from 24 months to 5 years, although some may have even longer terms. This means your monthly repayments (including both the loan amount and interest) will be lower than those of short term loans as they’re spread out, making it easier on your cash flow.
Long term loans are usually only available to businesses with a strong financial history, a good business credit score, and / or assets to secure against the loan.
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How does a long term business loan work?
A long term business loan gives your business a lump sum of money upfront, which you repay over several years in fixed monthly payments. Each payment includes part of the original loan amount (the principal) and interest. The exact length of the loan depends on your agreement with the lender, typically it will be over several years.
How to apply for a long term loan with Capitalise
Here's how it works to get a long term loan:
Am I eligible for a long term business loan?
To be eligible for a long-term loan, you generally need to meet these criteria:
Businesses with a strong financial history are more likely to qualify for a long term loan. Long term loans are riskier for lenders because they are repaid over a longer period, making the borrower’s financial stability harder to predict. Changes in business performance, asset value, or the risk of default can make it more difficult for lenders to recover the loan. To mitigate this risk, long term lenders tend to have stricter requirements.
If you haven’t been trading for long, offering an asset as collateral may still help you secure a long term loan. However, if you're not eligible for a long term loan, there are plenty of alternative funding options available. You can speak with one of our funding specialists to learn more.
What can a long term loan be used for?
Expanding your business
Open a new shop, increase office space, or launch a new product.
Purchasing business assets
Buy a property, machinery, vehicles, or technology.
Covering operational costs
Pay for staff, manage cash flow, and keep your business running smoothly.
Refinancing existing debt
Swap expensive short term loans for a more manageable long term loan.
What are the advantages and disadvantages of a long term business loan?
Advantages | Disadvantages |
|---|---|
Because the loan is paid back over a longer period, the monthly payments are typically lower, making it easier to manage your monthly cash flow. | You are committing to making payments for a long time, which might not be suitable if your business's financial situation changes. |
Long term loans typically allow for larger borrowing limits. | Even though the monthly payments are lower, you may end up paying more in total interest over the life of the loan compared to a short term loan. |
Many long term business loans have fixed interest rates, so your monthly payments stay the same over the life of the loan. This predictability helps with budgeting and financial planning. | Long term loans often require the business to provide some form of security, such as a personal guarantee or a business asset. |
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What interest rates come with a long term loan?
Interest rates for long term loans depend on several factors, including the lender, the business's financial health, and whether there is an asset used as collateral. Secured loans, which require collateral, generally come with lower interest rates. However, unsecured loans are riskier for the lender, so they often have higher rates, though they are usually quicker to access.
Long term loans typically have lower interest rates compared to short term loans. However, since they are repaid over a longer period, the total interest paid over the life of the loan could be higher, even if the annual interest rate is lower.
What are the different types of long term loans?
Loan type | Description |
|---|---|
Asset finance | Used to buy business assets like machinery or vehicles, these loans are secured against the asset itself. |
Commercial mortgage | A loan to purchase or refinance commercial property. These loans will require a deposit and will be secured against the property itself. Term lengths of up to 25 years are available. |
Unsecured long term loans | These loans do not need a business owner to provide security in the form of an asset or property. Instead the lender will use the business’ credit score, financial health and revenue to assess affordability. This offers faster access to funds, but usually comes with higher interest rates than secured. |
Secured long term loans | These loans require collateral (such as property or assets), as security. They usually offer lower interest rates and higher borrowing limits than unsecured long term loans. |