loan terms

[Bchap56]

What are the terms for most business loans? What would be an average rate also? I'm not ready to start talking to a bank just yet.

Thanks

[laundryboy]

Rates will be a question of the lending market when you go to the bank.

Terms can be a mix of just about anything;

* Fixed term in months - You always know what your paying (good for budgeting)
* Fixed rate/adjustable - Adjustable will float with the market (good when rates are high and coming down)
* Shorter term with baloon payment - Keeps payments lower as a large princple payment will be made at the end of the loan (5,7,10 yrs).

Things that will effect your rate;
* Length of loan (longer - higher rate)
* Quality of YOU (credit and business experience (or plan))
* Collateral

[Bchap56]

Thanks.

What length do most fixed loands run? I just haven't been able to fiqure out if a typical loan is for 10 years, 20 years, etc.

[MordyRo]

I am new to this business as well, but my understanding is that unless you have real estate that can be posted as collateral, the term for a typical business loan will probably be no longer than 10 years and probably self-amortizing over the term. If you can secure the loan with real estate, you can get terms as long as 30 years or more.

Rates on an SBA loan last time I checked were about Prime + 2.75%. With Prime at 5.25%, that's not too bad a rate!

[pete f]

The term should be 5 years or so, probably 8-9% if you are buying a laundry in a leased location. 40%-50% down

[ericnyc]

The term should be 5 years or so, probably 8-9% if you are buying a laundry in a leased location. 40%-50% down

Pete,

Would putting down 20-30% and financing over 7-8 years work, assuming equipment is relatively new and lease is for 10+ years. If not why not?

Thanks