ll archives: Term Loans Explained

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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:

  1. Hiring staff
  2. Building a new website
  3. Opening a new location
  4. Expanding your space
  5. Working capital

What should a term loan NOT be used for?

  1. Short term inventory
  2. Seasonal spikes
  3. Rainy day availability
  4. 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.

Photography: Lumina