A loan with a fixed amount, specified repayment schedule, and predetermined maturity date, typically used for specific business purposes like equipment purchases or expansion. Unlike revolving credit, once repaid, the funds are not available to borrow again.
Combining 'term' from Latin 'terminus' (boundary or limit) and 'loan' from Old Norse 'lán' (something lent). This banking terminology became standardized in the early 20th century as financial institutions developed more structured lending products with defined time periods.
A term loan is like the financial equivalent of a one-way ticket - once you pay it back, that's it, the relationship ends! This differs from revolvers where the relationship continues, making term loans perfect for specific projects with defined funding needs.
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