What is a Term Loan?

A traditional term loan is a lump sum of cash you pay back, plus interest, over a fixed period of time with monthly payback. When a business is ready to make a significant investment in future growth, long term business loans are a common way to fuel that progress. Term loans allow companies to afford large outlays by paying little by little over time. This can include purchasing new manufacturing equipment or remodeling facilities. Without a term loan, many businesses would not be able to take the important step from financially focusing on short-term survival to planning for long-term growth.