It’s the “financing tool that built the nation.” A business term loan is quite possibly the longest-standing form of business financing in the world. Before there were bond markets — and possibly even brick-and-mortar banks — there were term loans.
A term loan essentially has two components: A set term (period of time) and a fixed interest rate over the length of the term. If you’ve ever financed a car, mortgage, or taken out a loan to pay for college then you’ve most likely encountered a term loan in the past. Of course, business term loans are much different than a predatory student loan you may have had (or more likely, continue to have).
The key features of a term loan generally include: