Term loan is finance provided by the lender for a stable duration of time and to be repaid in the regular instalments. The term loan is required mainly for purchasing land, machinery or building for establishing a new business or expanding an existing business. In India, the term loans are provided for a tenure period of 3 to 10 years based on the project, project financials and other factors. For the approval of term loan, a WellÂ Detailed Drafted project report is required. Well, experienced Financial Professionals are required to prepare the Detailed Project Report.
Categories of the term loan are the Short term loan, Medium term loan and the Long term loan. The short term loans are provided for the firms that run for a shorter period of less than one year. In this case, the payments may be a weekly or daily basis.
The medium-term loans are usually for a period of 2 to 5 years. To accelerate the plans of business owners the medium term loans are used.
The long term loans are for a period of 10,15 or up to 25 years. To expand the existing business or to buy any assets or buying any buildings the long term loans are used.