5 Effective Facts – How to Get a Term Loan


Written by Eric info@acsecapital.com

I've been involved in business for some time and now I have decided to make a commitment to providing small businesses with truely helpful information.

How to get a term loan

How to get a Term Loan

Term loans has been around for a few thousand years and evidence shows that it goes back to Mesopotamia 2000 BCE.

It is amazing that the method of supplying someone with a need for something would develop into what it is today, (whatever that something is).

However term loans has retained its usefulness over such a long period of time. The act of a temporary transfer of a lien for money with the obligation to repay at a later date with or without interest.

Let’s look at how to get a term loan in the natural scheme of things.

As a business owner you must prepare your Financial statement with Income Statement, Balance Sheet and Cash Flow Statement accompanied by Sales Forecast and Business Plan or Summary to start with.

It would be almost impossible to get past the gate without this.

Then you must show that you have the collateral to fulfill the equity injection requirements needed by the lender which can look very different from lender to lender.

From here on its about choosing the lender that is willing to work with you relative to your business needs.

Although the lender would want to also tie you, your personal assets and great great great grand child to the transaction.

You should be selecting the lender that is looking to develop a working relationship with you and your business.

Today business owners make up thousands of categories and they are the ones thinking to themselves how to get a term loan to acquire that “something.”

Which follows the ancient system of borrowing, and use these methods available to them in order to manifest an intended outcome for profit. At times a Merchant Cash Advance can work for your situation but its usually pretty expensive.

So it’s been around for sometime, therefore choose wisely.

Table of the typical Term Loan you would see from your Lender

Debt Types

Term Loan

Interest RateFloating
Floating RateLibor + Rate %
Cash PayYes
Tenor4 to 6 Years
AmortiationStraight Line
InvestorsConservative Institutions
SenioritySenior Secured
Call ProtectionCase by Case


The question on the minds of so many business leaders today is “How is getting a term loan going to change and what is going to be the new rules going forward?

How to get a Term Loan in this Economy 

The lending industry and markets has already begun to show that they have diverted how they are distributing loan facilities and who they are going out to.

Dispite this, borrowers have to more than ever prepare their businesses with whatever little is remained of it.

This must be done to showcase how they have been strong in the past and the steps that are going to be taken to tranform their business into a post Covid-19 Cash Generating machine.

Because let’s face the facts here, lenders are going to place their money where there is the best return Covid-19 Pandemic or not.

“Have a look at this great video from Tim Bennett breaking down Working Capital into digestible chunks of information”

How to get a term loan

How should a business owner approach a Loan Application?

I know how it can be draining and can seem like a lost cause pursuing a term loan when the market is beginning to tighten up on lending and it must be annoying how many things you have to provide to access a loan, when COVID-19 had nothing to do with your business down-turn in performance.

As mentioned in my other post “How to get a Working Capital Loan,” it begins with preparing your business to be marketable in the sense of putting together a communication package for your lender to review which would include but not be limited to the following: 3 years financials, 2 Years Tax Returns, Sales Forecast, Debt Schedule if there is one, Proof of ownership, Identification (DP / Passport/ ID Card), Proof of contracts, Proof of invoices, Sources and Uses showcasing where the Collateral for the Loan would be coming from.

A few important questions to ask yourself:

  • At what point do I consider myself 100% certain that I understand how to get a Term Loan?
  • Could you afford the Daily, Weekly or Monthly payments of the loan I am attempting to procure?
  • Should you take on this amount of debt at this time.
  • If you had the opportunity to get started with an application today and not worry about the nuances of finding a lender, how interested would you be? If you could solve that problem, how would you proceed?

“I suggest allowing your business and the financial data to guide exactly what should be your next move for your business. Numbers don’t lie”

A typical commercial term loan you are going to encounter from your friendly local banker is going to be straight forward in most cases.

Your company will also have to have been performing well with at least a 2 to 1 ratio on current assets to current liabilities along with your free cash flow covering debt service at least 1.5 times.

Further to this typically since 2008 lenders want to see a sizeable equity injection from you directly or your business and will want you to have a personal guarantee on it.

The equity injection needed is decided on a deal by deal basis and based heavily on the credit history of the merchant and relationship with the lender.

There would be times where you may be familiar with a lender and still be denied even though your company is performing well.

In a lot of cases there could be so many factors at play which could be causing your lender to make a pass.

As with any other business, they are ran by human beings with emotions and personal agendas and in some cases your application may just not qualify.

Or you may not fit the pedigree of application they are looking for at the time, which may change, therefore your obligation to your company is to seek alternative lending sources to survive in business another day.

A lot about getting a Term Loan is about relationship management and providing some valuable form of property as collateral towards a loan. However when all requirements are met, it boils down to the relationship you have generated with the lender, that would attract the best terms for your business. So go forth and form relationships with lenders that want to form a relationship with you.

Eric Charles

Managing Director | CEO, ACSE Capital Inc.

56% of small business loans are from traditional facilities such as term loans. 28% of Small Businesses us Credit Cards to fund their business.

39 % of Small businesses use their personal credit cards to fund their business which shows that an entrepreneur has to be creative when it comes to sourcing the funds to start a business or continue operations.

This is also why 54% of small businesses fail in less than 5 years and 30% of small businesses fail because they run out of cash.

How effective can your business be if you don’t have enough cash to spend towards your business?

It’s nearly impossible to experience growth without some form of cash flow incoming into your establishment.

In some cases you may have a lot of sales but not enough cash sales that support the time-frame of inventory replacement.

Then if there is an increase in the demand of your product, you would definitely be in need of extra cash to fulfil those orders.


Cash Management is paramount. So you must have be diligent and prudent with following an operational plan for your business, which can graduate into a growth plan for your business. Nontheless, it is critical that “eye balls” are on the dollars and cents, keeping you within parameters of success. Therefore when seeking funding, always have a plan, then when funded, execute that plan with laser beam focus on cash management.

Eric Chares

Managing Director | CEO, ACSE Capital Inc.

I am also thinking about cash reserves. If you didn’t have one before and you are on track to get funded, then you should seriously be thinking about setting up a cash reserve system. 

I find it odd that for the those who may have had a lapse in judgement, why would a business owner wait until he is out of cash or in a cash flow deficit to scramble for a loan?

But I am being facetious. There is a thousand things that can happen.

Could you do something different from your competitors, that would help you stand out from the pack and show the lender that there is something special about your business?


This statement may be counterproductive for ourselves, as we provide access to a lending network but for some business owners, why are you borrowing if you really don’t need the funds. Cash Flow and EBITDA (Earnings Before Interest Tax Depreciation and Amortization) is the first metrics any lender woud be significantly interested in more that any other information on your financials. Secondly how it relates to your Revenue, Cost of Sales / Cost of Goods and Operational expenditure. So if you’ve just begun generating cashflow, really evaluate whether you should be applying because you need it, or you just want it.

Eric Charles

Managing Director |CEO, ACSE Capital Inc.

And should you even be considering financing at this point?

If the answer is yes to the need for financing. You better have all your information ready and packaged to go.

Your Lender would love you for it and it would showcase that you are on top of your game.

Package, Package, Package. If you would like to try it yourself, have fun. But if you hate burning to learn, you would want to package your application and accompanying documentation with everything under the Sun that would help move things along faster with your lender.

Access over 150+ Lenders for a Small Business Loan with ONE application

If you are waiting in line for access to PPP funds or just trying to figure out how to get a small business loan then checkout our Lending Marketplace at acsecapital.com and get started with access to Secured loans, Unsecured loans, Term loans, Lines of Credit, Invoice Financing, Asset based lending, Cash Flow Loans, Commercial Real Estate Loans and more. The best time to get started with us is now because we provide you with quick access to capital.

Data Processing and Hosting Services

The Data Processing and Hosting Services industry provides infrastructure used for a variety of information technology (IT)-related activities, ranging from online hosting to automated data entry services.

Over the five years to 2021, businesses have increasingly outsourced their IT infrastructure needs, directly benefiting industry operators.

The advent and popularization of cloud computing, one of the industry’s fastest-growing product offerings, has similarly led to greater demand.

As a result, the industry has fared well during the majority of the five-year period, with revenue expected to grow at an annualized rate of 5.0% to $196.5 billion.

However, the COVID-19 (coronavirus) pandemic is expected to lead to a decline in business investment in industry services, although this was tempered somewhat by increased usage of industry services in other capacities.

Industry revenue is expected to increase 1.7% in 2021, as the overall economy recovers from the economic fallout of the coronavirus pandemic.

Profit is expected to decline slightly over the five years to 2021, as growth earlier in the period is countered by declines in later years.

Beef and Pork Wholesaling

The Beef and Pork Wholesaling industry has experienced favorable conditions over the five years to 2021.

The industry, which serves as the middleman between beef and pork producers and retailers, is expected to perform well as both consumer spending and consumption of beef and pork rises.

Prices of key inputs, such as corn and diesel, have risen during the five-year period, increasing operating costs.

Although operators have dealt with recent studies linking beef and pork consumption to heart disease and shifting consumers’ tastes, the industry has shown resilience as operations have expanded.

Revenue has been on a steady growth during the five-year period.

However, the restrictions placed on the economy as a whole due to the COVID-19 (coronavirus) pandemic led to a decrease of 0.9% in 2020.

This contraction in revenue was offset by the increase in per capita disposable income as a result of enhanced employment benefits and stimulus checks.

As the economy begins to reopen in 2021 and the easing of restrictions occurs, consumer spending is expected to increase due to pent-up demand.

Consequently, research estimates industry revenue to increase at an annualized rate of 2.4% to $91.4 billion over the five years to 2021, with a 2.0% growth in 2021 alone due to the expected economic rebound.

Beer Wholesaling

Revenue growth for the Beer Wholesaling industry has been hindered by shifting alcohol consumption trends among consumers, particularly millennials.

Americans have been consuming less beer and opting for alternative alcoholic beverages.

However, the industry has continued to benefit from laws that prevent the vertical integration of breweries and retailers.

After the Prohibition era, nearly every state enacted a three-tier distribution system, requiring three distinct levels within the alcoholic beverage supply chain, including producer, distributor and retailer.

As a result, beer wholesalers have a protected role, purchasing beer from producers before storing and transporting it to downstream retailers.

Research estimates that industry revenue has grown at an annualized rate of 2.3% to $82.9 billion over the five years to 2021.

Since 2020, the COVID-19 (coronavirus) pandemic has resulted in rising demand for industry operators, with revenue projected to rise 1.0% in 2021 alone.

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