A business term loan is a type of loan that provides businesses with a lump sum of money upfront, which must be repaid over a set period of time with interest. The term of the loan can range from a few months to several years, depending on the lender and the purpose of the loan.

​

Term loans are typically used by businesses to finance specific projects or investments, such as purchasing equipment, expanding operations, or acquiring another business. They can be secured or unsecured, depending on the lender’s requirements and the borrower’s creditworthiness.

With a secured term loan, the borrower provides collateral, such as property or equipment, that the lender can seize if the loan is not repaid. Unsecured term loans do not require collateral, but they may have higher interest rates and more stringent credit requirements.

​

The interest rate on a term loan can be fixed or variable, depending on the lender’s policies. Fixed interest rates remain the same throughout the term of the loan, while variable interest rates may fluctuate based on market conditions.

Overall, term business loans can provide businesses with a reliable source of funding for specific projects or investments. However, it’s important for borrowers to carefully consider the terms and conditions of the loan, including the interest rate, repayment term, and any collateral requirements, to ensure that the loan is a good fit for their needs and financial situation.