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 business financing, a 'term loan' is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate. A finance manager might explain, 'We secured a term loan to expand our manufacturing facilities, with a repayment plan structured over five years.'

Practice Scenarios

Tech

Scenario:

Product development has to be accelerated to meet market demand. We need additional financial resources.

Response:

A term loan could support our immediate financial need for quick product development.

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.