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Bank Term Loans

Bank Term Loans. By: Jarrett Carter, Brady Horton, and Nick Elacqua. Description. A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loans almost always mature between one and 10 years. When to use this.

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Bank Term Loans

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  1. Bank Term Loans By: Jarrett Carter, Brady Horton, and Nick Elacqua

  2. Description • A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loans almost always mature between one and 10 years.

  3. When to use this • Bankers tend to classify term loans into two categories: intermediate- and long-term loans. • Intermediate-term loans usually run less than three years, and are generally repaid in monthly installments (sometimes with balloon payments) from a business's cash flow.

  4. Relative Cost • The level of the cash rate set by the Reserve Bank is a primary determinant of the level of intermediaries' funding costs and hence the level of lending rates. It is the short-term interest rate benchmark that anchors the broader interest rate structure for the domestic financial system

  5. A Few Steps To Take • Preparation • Choosing Banks for Small Business Loans

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