Financial Services
Understand the differences between Overdraft vs Term Loan. Learn which option suits your business needs, and make informed financial decisions in 2024. A term loan meaning in the context of business financing, refers to a predetermined sum of money provided by a lender to a borrower for a specified duration, whether secured or unsecured. The term loan is characterized by a fixed amount, and its repayment is structured over a set period. Businesses often utilize term loans to meet capital requirements for various purposes such as expansion, equipment purchase, or working capital. The term loan interest rate associated with a term loan is a key consideration, and it may vary based on factors like the borrower’s creditworthiness and prevailing market conditions. Example:- For a clearer understanding, consider a term loan example of where a company secures a term loan to fund the acquisition of new machinery, committing to repaying the borrowed amount over an agreed-upon timeframe.
