A Bank Term loan from lenders in the FinTech Capital Management network is a short-term, fixed-rate loan with stable monthly payments. These loans are a great fit when you need funds quickly and want to lock in your interest rate. The same streamlined process is used for term loans through banks in the FinTech Capital Management network.
Proceeds from a Bank term loan can be used in a variety of ways to meet your business goals. Funds can be used for working capital, debt refinance, new equipment purchase, and more. Additionally, paying off a Bank Term loan responsibly helps to build business credit.
There’s only one easy application to complete, whether you are applying for an SBA loan or decide to proceed with a Bank Term loan option. And our team of professionals are available online or over the phone to help you understand and navigate your options.
Bank Term loans are term loans meant to be repaid in a shorter amount of time than the 10-year term of a typical SBA loan. This type of loan can be a great way to get the funds you need to successfully build or maintain your business until you are eligible for an SBA loan.
Customers who qualify for a term loan may have the option to reduce their term loan interest rate by 2% if they choose a prepayment penalty of 5% of the total outstanding balance.
Bank Term loans: Use of funds
Find out all the ways to use your bank term loan funds to build your business and save money.
A Bank Term loan from a bank in the FinTech Capital Management network can be used in a variety of ways to build your business and save money. The financial professionals at FinTech Capital Management are available to answer any questions you may have regarding acceptable uses of loan proceeds. The following are popular ways our customers use funds.
Working capital is used to cover a company's short-term expenses like inventory, equipment, marketing, payroll, hiring, and payments on short-term debt.
The formula to calculate working capital is:
Deduct current liabilities (primarily short term loans due within a year and accounts payable) from current assets (cash on-hand and things that can be easily converted into cash, like inventory and accounts receivable).
If your current assets don’t exceed your current liabilities, a bank term loan can get you back on track to help meet ﬁnancial obligations and cover day-to-day business expenses.
Many entrepreneurs rely on expensive debt when launching or in the early stages of their business. If those debt obligations are cutting into cash flow, refinancing can help you save big. For example, a marketing consulting company in San Francisco was making excessive monthly loan payments. The owner took out a $100,000 Bank Term loan with better terms and lower rates from a bank in the FinTech Capital Management network. He was able to refinance three high cost loans, saving the business approximately $7,000 monthly.
A bank term loan can cover costs related to hiring like recruitment, training, salary, and beneﬁts. An automotive business in North Carolina needed additional workers to keep up with service demand. The business owner allocated $15,000 from a bank term loan to hire and train 2 new technicians. With the additional staffing, he’ll be able to take on more jobs, increasing revenue.
Business equipment includes tangible property (other than land or buildings) used for operations. Examples include computers, machines, tools, and vehicles. A frozen food wholesaler allocated $60,000 from a Bank Term loan to replace outdated refrigerated equipment. The business now has reliable cold storage to handle current and future inventory.
A bank term loan can finance marketing efforts to build your brand, attract customers, and increase sales. Consider a Bank Term loan from a bank in the FinTech Capital Management network to cover things like advertising, trade show costs, promotional materials, and more. For example, an established beauty salon is using $10,000 from a bank term loan to revamp their website, invest in Google pay per click ads, and launch social media campaigns.
If you need to increase existing inventory or expand your product line, funds from a bank term loan can cover the costs. The owner of a cafe in California is using loan proceeds to purchase additional coffee and tea products. They’ll save big by buying goods in bulk.
If you need funds for remodeling, bathroom updates, or other space improvements, consider a Bank Term loan from a bank in the FinTech Capital Management network. A restaurant located in Atlanta came to FinTech Capital Management to solve a problem. Demand for their food was high, but their available dining space was too small. The business owner took out a Bank Term loan to expand into a space next door. The funds are being used to hire a contractor/engineer along with a designer to handle aesthetics. The projected additional revenue per day due to the larger space is $1,000- $1,500 per day.
A buyout is where one party purchases shares of a business to acquire a controlling interest in that company. Funds from a Bank Term loan from a bank in the FinTech Capital Management network can finance this type of transaction.
Funds from a bank in the FinTech Capital Management network can be used to purchase an additional business. However, funds cannot be used for a new business purchase. If you have questions, please ask your FinTech Capital Management Loans relationship manager for specifics.
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