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Finance Guide: Term Loans

Published on 11th May 2016 - Last update on 14th December 2019

A Term Loan is a loan provided to a business for a fixed amount over a fixed (term) period. Simply put, this type of loan is similar to the classic bank loan, and the security of the loan is based on an assessment of a company’s financial standing and history. A Term Loan will usually have a fixed interest rate and scheduled maturity date, with monthly repayments.

How long is a Term Loan?

This type of loan can be provided by a variety of lenders to meet a variety of business needs. The common thread to all is having a fixed term agreed between lender and borrower, which can be anywhere between 3 months and 10 years.

A Term Loan, although generic in title, should not be confused with other types of loan that also have a fixed term such as Hire Purchase or Invoice Finance. These have different characteristics – please click here to see more information on these asset types.

Once the funds have been secured they can be used for any reason within the business.

Making sure you have the right finance for your business is complex and can often be confusing.

There are so many options that can seem very similar, but which when reviewed closely can be very different in terms of monthly payments, overall costs, up-front fees and terms and conditions.

If you’d like to talk to one of our Business Finance Specialists:

Call us on 020 3637 2455

Or email us on [email protected]

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