Long-term loans are the type of financing that companies use to make larger investments in their business. We tell you all about them in this article.
What is a long term loan?
Long-term loans are a form of financing for companies with long-term repayment in the form of periodic installments. Being long-term loans, the company can cover a wide range of large-scale financing needs such as investment (in machinery, fixed assets …), finance large expansion products …
Long-term loans are considered to be made over a period of more than one year. Otherwise they are understood as short-term loans.
We tell you how these types of loans are usually repaid.
Long-term loan repayment
The return modality is agreed upon at the time of formalization but is generally carried out through monthly installments composed of capital and interest. But the following types of return may also be given:
- Lack of capital during a given period: It can be agreed that during a certain period no capital is paid, composing the monthly installments only interest during that period.
- Total lack during a given period: In this type of lack no fee, capital or interest is paid.
- Quarterly or other periodic payments: In this case, instead of making the payment through monthly installments, it does so quarterly or with another agreed periodicity.
- Payment at maturity: In this case the payment of both capital and interest will be made at the end of the loan. This modality is very strange in the case of long-term loans.
Types of repayment in long-term loans
Another important issue to consider in a long-term loan is the type of repayment you have.
- French amortization system: In this type of amortization the installments are constant and the interest is calculated on the outstanding capital, therefore more interest will be paid at the beginning of the loan than at the end.
- German amortization system: In this case the fee varies over time. The proportion of capital is constant and interest decreases, paying more at the beginning.
- American repayment system: This system pays periodic interest and a share of capital at the end in a single payment.
Fast long term loans
Today there are multiple financial alternatives as a source of financing where to apply for a long-term loan, such as online financing platforms where agility, speed and simplicity are much greater than through traditional methods. Generally, less requirements and paperwork are requested and in addition all the processing is 100% online, which speeds up the process even more.
Lender company is a platform for access to crowdlending and crowdfactoring where companies obtain loans, both short-term and long-term and also factoring lines or invoice advances.
How to get a long term loan?
At lender company, any company or business can apply for a long-term loan. The process would be as follows:
- Request financing for your business in the online form here. You can request both a loan and a factoring line.
- Once you provide the simple documentation that will be requested at the end of the assistant, the lender company team gets to work and will analyze the operation.
- Once the characteristics of the company have been approved and agreed upon, the operation is published in the market where registered investors access and they will begin to lend their money to the company. Remember that lender company is not a bank, here are private investors who will lend their money to the company.
- Once the lender company amount has been completed by the investors, the company receives their money and from there lender company is charged with collecting the corresponding fees and returning the money to the investors who have participated. That easy.