term-loan

Vocabulary Word

Definition

Term loan is an amount of money lent by a financial institution for a certain period. It's similar to a car loan or house loan, where you pay it back with interest over time.

Examples in Different Contexts

In real estate development, developers often use 'term loans' to finance the construction of new projects. A real estate developer might say, 'We utilize term loans for their relatively lower interest rates and predictable repayment schedules, which help manage cash flow during construction.'

Practice Scenarios

Accounting

Scenario:

The balance sheet should be balanced. We should ensure our liabilities and our resources are managed effectively.

Response:

We can manage our long-term loan effectively by making timely payments and balancing our assets and liabilities.

Business

Scenario:

Our plant expansion plan needs funding. We need to consider the best financial options available.

Response:

Applying for a term loan could be a suitable option for funding our expansion.