Small-business loan terms determine how long a small-business owner has to pay back their borrowed money, plus interest. Typical loan terms, also referred to as repayment terms, can vary from a few months to 25 years — it depends on your lender and the type of business loan.

You and your lender will establish a repayment schedule that shows how much you’ll pay per week or month. While reviewing repayment terms, consider eligibility requirements and annual percentage rates, which take into account interest rates and other fees associated with the loan.

Small-business term loans provide a lump sum of cash upfront that borrowers pay back over time. Online lenders and traditional banks offer them, and maximum amounts range from $250,000 to $500,000. Term loans fall into either the short-term or long-term category — for example, a long-term loan may have a repayment term of 10 years while a short-term loan from an online lender might only give the borrower from three months to two years to pay it back.

Nonprofit, community-driven lenders offer microloans to small-business owners in specific regions and underserved communities. While smaller loan amounts typically mean shorter repayment terms (and this is true for some microloans), SBA microloans have terms of up to six years.

SBA loans range anywhere from thousands of dollars to $5 million and generally have low interest rates. The maximum 7(a) loan term for working capital is 10 years, although according to the SBA, seven years is common. Borrowers have up to 25 years to pay off loans used for real estate.

With a business line of credit, small businesses pay interest only on the money that they borrow, and funds can be available within days. Some business lines of credit require weekly repayments instead of monthly repayments.

Invoice financing provides businesses with a cash advance while they wait on their unpaid invoices. Like a business line of credit, invoice financing is a quick way to access cash and is one of the shortest-term financing options available. Terms mostly depend on how long customers take to pay their invoices.

Equipment financing is used to pay for large equipment purchases, and then that same equipment serves as collateral. Terms vary and usually depend on how long the equipment you’re financing is expected to last.

A loan repayment term describes how much time you have to repay the loan, plus interest; you might also hear this referred to as loan maturity. This is not to be confused with the loan maturity date, which is the final day of your repayment term. On the loan maturity date, the entirety of the loan and any extra associated costs should be paid.

When deciding between a business bank loan and an SBA loan, the right fit will depend on the number of years your business has been in operation, your annual revenue, your credit history and a handful of other factors.

Generally, bank loans offer the lowest interest rates and best terms on business loans, which make them the first stop for many borrowers seeking financing. However, if a borrower doesn’t qualify for a bank loan, a Small Business Administration loan with competitive interest rates and terms can be a good alternative. Take a closer look at bank loans and SBA loans to understand how each works.

Banks, credit unions and other financial institutions offer small-business loans. The amounts, interest rates, fees, eligibility requirements and other terms of these loans vary depending on the bank and its guidelines. The repayment period for these loans may be as short as 12 months or as long as 20 years.

Bank loans can be hard for many small businesses to qualify for because the lender takes on the full risk from nonpayment of the loan. Each bank sets its own qualification standards for the loans it offers. However, some general requirements include the following:

• At least two years in business.

• Minimum annual revenue amount.

• Strong credit history.

While they may be branded with specific names, the following are some common types of small-business bank loans:

• Business lines of credit.

• Term loans.

• Equipment loans.

• Commercial real estate loans.

Bank loans can be used for a number of purposes including, but not limited to, the following:

• Purchase of land or commercial property.

• Expansion or remodel of an existing business.

• Working capital to improve business cash flow.

• Purchase of equipment and machines.

• Funds to consolidate debt.

Business loan interest rates vary by lender, but a range from 2.5% to 7% is common for small-business loans from banks. Typically, your lender will base your interest rate on factors such as the following:

• Loan amount.

• Loan term.

• Your creditworthiness including credit score.

• Business relationship with the lender.

Some situations where a bank loan may be a good option for your business include:

• Established business: You’ve been in business for more than two years and have a proven track record.

• Strong annual revenue: An annual revenue amount of over $100,000 can meet the qualification requirements of some bank loans.

If you’ve been turned down by a bank for its loan program, you may still qualify for an SBA loan. These loans are not offered directly through the SBA, but are instead handled by approved lending partners. Some of these lending partners may even be the same lenders that you looked at for a bank loan. Qualification for an SBA loan can be easier for borrowers because SBA loans are guaranteed by the Small Business Administration, meaning there’s less risk to the lender in the case of nonpayment of the loan.

The SBA’s Lender Match tool can help you find a lender in your area. After answering some questions about your business, you’ll receive a list of lenders that are interested in your loan. This gives you the opportunity to compare rates, fees and terms for lenders before submitting your application.

Eligibility requirements are determined by the loan program and the lender. A complete list of requirements will be given to you by the lender, but some general eligibility requirements for SBA loans include:

• The size of your business must meet SBA standards.

• Your business needs to be for profit and officially registered.

• Your business should be located and operating in the U.S. or its territories.

• You’ve invested time and money in your business.

• You can’t get financing from other lenders.

SBA loans can be used to start or expand your business. There are three main types of SBA loans available to borrowers:

• SBA 7(a) loans including standard 7(a) loan, 7(a) Small Loan, SBA Express, Export Working Capital, International Trade, Preferred Lenders, Veterans Advantage and CAPLines.

• 504 loans.

• Microloans.

How you use the funds from your SBA loan can depend on the type of loan you get. For example, SBA 7(a) loans can be used for working capital, while 504 loans cannot. Here are some common uses of SBA loans:

• Working capital or revolving funds.

• Real estate, equipment, machinery, furniture, supplies and materials purchases.

• Construction or renovation of buildings.

• Establishing a new business; acquiring or expanding an existing business.

• Refinancing existing business debt.

• Improvements to existing facilities including land, streets, parking lots, landscaping and utilities.

Depending on the type of SBA loan you get, the interest rate could be tied to the prime interest rate, the Libor rate, U.S. Treasury issues or something else. For example, the interest rate for a $60,000 fixed-rate 7(a) loan would be the prime rate plus 6%, while the interest rate on a microloan depends on the lender. The SBA sets maximum interest rates and you can negotiate with your lender on the interest rate you pay.

Situations that make an SBA loan a good option for business financing include the following:

• Startup financing: The SBA’s 7(a) loan can be used to establish a new business.

• Credit flexibility: There’s the potential that you can qualify even with poor credit ratings.

• Continued support: Some SBA loans offer counseling and education to help you get your business off the ground and continue to operate it.