While disruptions in the course of business are commonplace for most companies, these can be easily mitigated by opting for a term loan.
These credit options come without any end-usage restrictions and are utilized to meet any number of business-related requirements – from maintaining a smooth working capital flow to stocking inventory. To know “what is term loan” and how it can help a business, take a look at the points below –
Important points to know about a term loan –
- These loans are provided for building constructions, buying machinery or equipment, setting up a business, etc.
- The tenor of term loans can be medium to long term.
- For business loan approval, the financial institution goes through the economic and technical viability of the business organization.
- The interest rate for these loans depends upon certain factors like the credit history of a borrower, project risk, amount of loan, and the structure of debt.
- There are several types of term loans available, and applicants must take note of each of them to apply for the one best suited to their needs.
Several benefits, including longer repayment tenor, quick loan disbursal, etc., have made term loans an approachable and preferred method of lending for individuals.