For small companies, term loans provide a simple, affordable lending option. If anyone thinks, in the general sense, of a business loan, they’ll usually think of a conventional term loan. A conventional company term loan is a lump amount of money that, at a fixed interest rate, you pay back with daily repayments. The fixed period of repayment would usually be one to five years long.
The proceeds of term loans are used by most company owners to fund a particular, one-time project for their small business. In comparison, conventional term loans are flexible, and firms often use them to suit a range of needs.