Long term loans can be thought of as the "traditional" business loan. These payments are predictable, with repayment terms reaching out as far as 10 years. These loans are generally secured, meaning that the business owner will provide collateral in order to facilitate the granting of the loan. The reasons a business owner might take out a long term loan vary widely, including building business credit, or just bolstering the company account in case of hard times.
After approval for the loan, a company receives a lump sum deposit in its business checking account. The business will then pay back the amount deposited, plus interest, over a period of time stated in the lending agreement.