Business term loans, in plain terms
A term loan is a set amount of capital borrowed up front and repaid over a fixed period — for a defined, one-time purpose, on a predictable schedule.
You know the amount, the term, and the payment going in. It's the straightforward choice when the need is specific and the timeline is clear.
Here's how a term loan works, what it's good for, and how it differs from a line of credit and from working capital. General information for U.S. businesses.
General information, not financial or tax advice.
Part of our plain-terms guide to business capital: Getting the right capital for your business →
How a term loan works
A term loan delivers a single lump sum up front, repaid in regular payments over a set period. The amount, the schedule, and the purpose are defined at the start, which makes it the most predictable form of business financing — you can plan around a fixed payment.
That predictability is the trade-off for flexibility. A term loan is committed to its purpose; it isn't a reserve you dip in and out of.
When a term loan fits
A term loan suits a specific, one-time need with a clear cost: an expansion, a buildout, a defined project, a planned investment, or rolling a need into one predictable monthly payment. When you can name the amount and the purpose, the term loan is usually the cleanest tool.
Term loan vs. line of credit vs. working capital
Three tools, three different jobs. The distinction is what earns each one its place:
- Term loanA lump sum for a defined, one-time purpose, repaid over a fixed term. Predictable payment.
- Line of creditRevolving access you draw on as needs arise, paying for only what you use. Best for ongoing or unpredictable needs. How lines of credit work →
- Working capitalFunding for day-to-day operations — payroll, materials, the wait to get paid. How working capital works →
They aren't competitors so much as different instruments. Many businesses use more than one — a term loan for the investment, a line or working capital to keep operations smooth around it.
What to weigh
A useful principle: match the length of the loan to the life of what it funds. Financing a long-lived investment over a short term can strain cash flow; stretching a short-lived need over a long term means paying for it long after it's done its job. The right term lines the payment up with the value the money creates.
Where Lamare Capital fits
Lamare Capital is a California-licensed commercial finance brokerage. We connect businesses with financing from $30,000 to $5,000,000 for business use. We open the path; our financing partner reviews, approves, and funds.
We're a boutique — focused, and direct. You deal with real bank capital through our tech-powered financing partner, not a maze of middlemen.
Financing partner: South End Capital, a division of Stearns Bank, N.A. (Member FDIC, Equal Housing Lender). Business-purpose financing only. All financing is subject to lender approval and credit review.
See your term loan options
A short, no-obligation look at a business term loan — from $30K to $5M, on a predictable schedule.
Explore financing →Common questions
A term loan is a set amount of capital borrowed up front and repaid over a fixed period on a predictable schedule. It's used for a defined, one-time purpose — you know the amount, the term, and the payment going in.
A term loan is a single lump sum for a specific purpose, repaid over a fixed term. A line of credit is revolving — you draw as needed and pay only for what you use. The term loan suits a defined one-time need; the line suits ongoing or unpredictable needs.
Term loans fit defined, one-time purposes: an expansion or buildout, a specific project, a planned investment, or consolidating a need into one predictable payment. When the cost and timeline are clear, a term loan is the straightforward structure.
Repayment periods are set up front and vary by purpose and lender, commonly running from about one year to several years. A general principle is to match the length of the loan to the useful life of what it funds.
Through Lamare Capital, financing ranges from $30,000 to $5,000,000 for business use. The amount a specific business qualifies for depends on the business and the lender's review and approval.
Verify us
Lamare Capital is a licensed California DFPI Commercial Finance Broker, License #60DBO-185415 (status: active).
Confirm our license and review disclosures at lamarecapital.com/disclosures. Lamare Capital will never ask for sensitive financial information by text or email.
Contact: (213) 277-8762 · info@lamarecapital.com