The business should have a debt to income ratio of not more than 4 times the amount of equity in the business. For less viable types of businesses the debt to income ratio may be required to be much lower, meaning that the lender is taking far less risk on being able to get the money back through the equity.

The term loan is the most common type of business loan. In this loan the interest rate is fixed over a set period of time, meaning that borrowers know exactly how much they will repay each month to completely pay off the loan in the pre-determined period of time.

Be careful when shopping for a business loan, especially if you have a small business. There are predatory lenders who target small businesses with excessive fees and high rates. If you feel uncomfortable about a loan you're considering, go somewhere else.