Term Loan
Definition
A loan repaid over a fixed period in regular instalments, typically used to buy long-term assets or fund expansion. It carries a set interest rate and maturity.
Related Terms in Business Terms
Amortization Schedule
A table showing each payment on a loan split between interest and principal, with the outstanding balance after every instalment. It reveals how slowly principal falls early in a loan.
Equity Financing
Raising money by selling ownership stakes in a business rather than borrowing. It brings no repayment obligation but dilutes existing owners and shares future profits.
Debt Financing
Raising money by borrowing, to be repaid with interest. It preserves ownership but adds fixed repayment obligations and financial risk if cash flow tightens.
Break-Even Analysis
Calculating the sales level at which total revenue equals total costs, so the business neither profits nor loses. It shows how much must be sold to cover fixed and variable costs.
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