Term loans are the most common types of loans for small businesses. They are very simple in that the lender provides a specific amount of money, usually at a fixed rate of interest, and there is a schedule for repaying the loan (usually in monthly or quarterly payments) over a certain amount of time.

Short-term loans may be for only a few months to provide working capital during a particularly busy season or for the purchase of new equipment. For the purchase of more expensive equipment, or for an expansion or remodel, an intermediate-term loan may be beneficial, with maturity in one, two, or three years. Long-term loans can be used to start up a business, open a second location, or make significant capital improvements. Short- and intermediate-term loans are the most common loans for small businesses.

Knowing the various types of loans and determining which one will best suit your needs is the easy part. However, obtaining the loan is a bit more challenging. Typically, banks lend money to businesses that already have money, which makes it very difficult for a new business to secure a term loan.