Term Loans are one of the easiest ways to finance a business. Organizations can avail this financial product to manage any sudden or planned expenses. Typically, this credit type has three sub types based on the defined repayment tenure.
Short-term advances are primarily availed by companies to tackle any financial emergencies. They come with repayment tenure of 12-18 months, which may vary depending on the lender. Intermediate-term loans offer a more substantial sum and offer a payment period of 36-50 months. This credit is mainly used for procuring equipment, purchasing land and buildings, etc.
Apart from that, this financial product is unique due to its specific features. The amount of such advances is predetermined, and may vary from one lender to another. Also, it follows a structured repayment schedule, which helps borrowers to pay their outstanding without any difficulties. Also, this loan is available as both secured and unsecured option, and borrowers can opt for either a fixed or a floating interest rate.
A business loan is a popular category of such term advances. Borrowers usually prefer it due to its no end-use restrictions, easy availability, and competitive interest rate.