Term Loan

Definition

A loan with a specified repayment schedule and maturity date, drawn in full at inception (or in agreed instalments) and repaid through regular principal and interest payments over its term. Term loans may be amortising (with regular principal repayments) or bullet (with principal repaid in full at maturity). They are commonly used to finance acquisitions, capital expenditure, and other defined investment purposes, and are typically secured by fixed and floating charges over the borrower's assets.