Typical business loan terms
What it means
How long a business loan runs depends mainly on what the money is for. Lenders try to match the repayment period to how long the thing you're buying will be useful to the business.
Why lenders ask
If a loan outlasts what it paid for, the business is still making payments on something it no longer uses or that has lost its value. Matching the two protects both you and the lender.
Common lengths by what the loan pays for
Working capital: usually a line of credit rather than a term loan, and typically reviewed by the lender once a year.
Equipment and vehicles: amortized over the equipment's useful life, as appraised. That's often several years, and it can be longer than seven when there's solid evidence the equipment will last, such as an independent appraisal or the manufacturer's expected life.
Renovations and leasehold improvements: often tied to how long is left on your lease, since the improvements stay with the building.
Buying an existing business: commonly several years, often in the five-to-ten-year range, depending on what's being bought.
Commercial real estate: paid off over a long period, often 15 to 25 years, but usually with a shorter term that renews every few years.
Shorter or longer?
A longer term lowers the monthly payment, which can make the numbers easier to carry, but it costs more in interest overall. A shorter term costs less in total but needs stronger cash flow each month. If the payment on a shorter term would stretch the business, asking for a longer one can be the difference between a loan that fits and one that doesn't.
Good to know
These are common patterns, not rules. Lenders, government-backed programs and your own situation all change what's on offer, so ask lenders what they would offer for your purpose.