ll archives: Term Loans Explained
We’re (finally) back! This week, we’re taking a closer look at a specific type of debt financing: term loans. A term loan is a lump sum (the “loan amount”) borrowed from a lender, and paid off at certain intervals, over a set amount of time (or “term”). A term loan is perfect for making an investment in an opportunity that will create a steady stream of cash in the near future.
Here are some common use-cases for term loans:
- Hiring staff
- Building a new website
- Opening a new location
- Expanding your space
- Working capital
What should a term loan NOT be used for?
- Short term inventory
- Seasonal spikes
- Rainy day availability
- Any short-term investment (under 1 year)
Samantha Novick is the Social Media Manager at Bond Street — a company focused on making small business loans simple, transparent and fair. Check in next week for a new video on how you — as a creative entrepreneur — can take advantage of small business loans to grow your business.