Medium to long-term business loans allows you to borrow funds to help you build your business. Medium-term loans can be repaid in monthly instalments over one to five years, while long-term loans can range anywhere between five years up to 30 years in some cases.

If you’re thinking about taking out a large business loan, it’s best to consider your options carefully before applying. It’s important to make sure you’ll be able to repay the amount you borrow and have a plan in place in case of any unforeseen changes in your financial circumstances.

Here are a few reasons why you might want to consider a medium to long-term business loan:

• With a long-term loan, the monthly instalments tend to be smaller and more manageable than with a short-term loan as you have longer to pay it back
• You may be charged a lower business loan interest rate compared to a short-term loanIt’s also important to think about the drawbacks that come with taking out a long-term business bank loan:
  • Although your repayments can be lower with a long-term loan, keep in mind that you’ll usually end up paying more in interest overall
  • A long-term loan could restrict the monthly cash flow of your business as you could be repaying the amount borrowed over several years
  • It can be more difficult to be approved for a long-term loan as lenders need to be sure you can comfortably repay the loan and the application process will be more thorough
  • Some long-term loans are secured loans that are linked to high-value assets such as property or stock. If you’re unable to keep up with the repayments, there’s a risk you could lose these assets