Business Loans

Tailored commercial financing with amounts up to $500K1,2 and flexible terms of up to 12 years1

Debt consolidation loan

Turn business debts into one fixed and affordable monthly payment

Existing business investment loan

Upgrade and expand your current business to increase your bottom line

New business opportunity loan

Buy into a business or develop passive income opportunities

Working capital loan

Boost your liquidity to finance all of your business needs and initiatives 

Personal Loans

Customized consumer financing with amounts up to $200K1 and flexible terms of up to 10 years1

Debt consolidation

Turn personal debts into one fixed and affordable monthly payment

Home improvement

Remodel your kitchen and bath, add a pool, or make other upgrades to your space

Other ways to use your funds

Pursue multiple goals with one comprehensive financial solution 

April 4, 2022

3 unexpected benefits of a longer term loan

Unexpected benefits of a longer term loan

When it comes to taking a business loan, many people focus primarily on the interest rate. But, it’s the “term,” the amount of time you have to pay back your total financed amount, that can really have a profound impact on the month-to-month affordability of your loan. Spreading your loan repayment out over a longer period has many immediate advantages as well as benefits that you’ll feel over time. Here are a few:

1. Lower monthly payments

The longer your loan term is, the lower your monthly payment will be. For example, if your principal balance were $72,000 with a typical bank term of 3 years, your monthly payments would be $2,000, plus interest. If you work with a lender who allows you to extend that term to 10 years, your monthly payment would be only $600 a month, plus interest. Your monthly payments could decrease significantly just by securing a longer term.

2. Improved cash flow

On its own, a loan will improve your cash flow by giving you access to more capital. That benefit is compounded when your monthly payments are lower due to a longer loan term. By extending the length of the loan and lowering your monthly payments, you have more money available each month. This gives you the opportunity to make large purchases or invest capital for future gains. Especially in an economy that is working to recover, having a robust cash flow is critical for managing unexpected costs and navigating these uncertain times.

3. Credit score boost

A portion of your credit score is calculated by your “credit utilization,” or the amount of your available credit that you’ve spent at any given time. Having a credit utilization ratio of over 30% can negatively impact your credit score. Using a business debt consolidation loan that doesn’t appear on your personal credit report to pay down other debts will reduce your credit utilization and can boost your overall score.

Securing a longer term for your business loan can have both immediate and long-term advantages. From improved cash flow month-to-month to a stronger credit score in the future, these benefits can have a lasting positive impact. To learn how affordable your monthly payment could be with a loan from BHG Financial, try our free Payment Estimator today.