The amount of the loan and the item being financed will determine the appropriate term of the loan. In general, smaller loans and loans for items with a limited useful life have a shorter term than larger loans and loans for durable items and real estate. The term of the loan is determined in large part by the lending practices of specific lenders. The following are general guidelines for the appropriate length of term for various types of loans.

Short-term financing is typically repaid in one to three years. Types of short-term financing include:

• Working/operating capital
• Accounts receivable financing/factoring
• Seasonal lines of credit
• Builders' lines of credit
• Contract lines of credit
• Vendor credit lines
• Business vehicle loans

Intermediate-term financing is typically paid back in five to seven years. Types of intermediate-term financing include:

• Permanent working capital
• Machinery/equipment loans
• Loans for furniture and fixtures
• Loans for specialized vehicles
• Environmental loans
• Loans for renovations/leasehold improvements
• Loans for business expansions and business purchases

Long-term financing with maturities up to 25 years are common for real property business expansions. Types of long-term financing include:

• Commercial mortgages for buildings (3- to 5-year balloon with 15-year maturity)
• Major equipment purchases (10 years or useful life)
• Site improvement, utilities, parking lots
• Business purchase or partner stock buyout (10 years)