What is a Term Loan?

Term loans are loans to companies, usually financing their long-term investments or fixed assets, such as: factories; machinery and equipment; houses, etc., with a term generally exceeding one year.

Term loan

Term loan is

Term loans have the advantages of great flexibility, fast speed, and low financing costs. This is because the term loan is negotiated directly between the borrower and the lender, and can be flexibly arranged according to the specific needs of the lender, which is more flexible; it does not require the approval of relevant government departments to accelerate the financing speed; it does not need to do extensive publicity and advertising work, and the formal There are also relatively few documents, which significantly reduces funding costs.

Term loans include fixed-rate loans and floating-rate loans.

Commercial banks are the main lenders of term loans. There are two main types of bank loans: credit lines and loan commitments.