When you possess a unique talent or a deep-rooted love for a particular subject, it’s natural to want to share that knowledge with the world. Launching a school to teach others what you know may seem like the natural course if you also have an entrepreneurial drive.
Running a school for profit is just like owning any other kind of small business, meaning it takes a certain amount of capital to keep things flowing smoothly. When you’re short on cash or you don’t want to spend down all of your assets to finance a large expense, a term loan can fill the gap. Keep reading to learn:
- What a term loan is
- How you can use a term loan to grow your school
- What it takes to qualify
Term Loans Explained
If you’ve never sought out small business financing before, it’s easy to get confused by the variety of choices. The lender offers you a lump sum of money, which you agree to repay over a set period of time. Your principal payments are fixed and your interest rate may also be fixed or variable.
Term loans are different from something like a business credit card or line of credit because you can’t draw against your available credit over and over again. As you make payments, the balance goes down until it’s zeroed out. If you want to borrow more money, you’d have to take out a new loan.
Term loans offer some distinct benefits, especially if you’re working with an online lender. For one thing, the interest rates and fees are often competitive with what banks offer. Funding Circle, for example, offers a term loan with terms from $25-$500K *Funding Circle may partner with other lenders to provide a full range of loan options to qualified borrowers, and competitive interest rates. That’s a much more affordable way to fund your school than something like an invoice loan or merchant cash advance, which may come with a double-digit rate.
Besides that, term loans offer you a certain amount of flexibility when it comes to repayment.Continue reading