A middle of the road term advance runs under three years, is paid in regularly scheduled payments from an organization’s income and may have swell installments. Reimbursement is attached to the valuable existence of the advantage financed. A long haul credit keeps running for three to 25 years, is collateralized by an organization’s advantages and requires month to month or quarterly installments from benefits or income.
As far as possible other money related responsibilities the organization may go up against, including different obligations, profits or principals’ pay rates, and can require a measure of benefit to be put aside for advance reimbursement.
What are the Documents required for Term Loan?
- Audited Financial Statement of last 3 years along with Income Tax Return Acknowledgement
- Quotation of Machinery to be purchased
- Installed Capacity, Licensed Capacity – existing & proposed, Envisaged Capacity Utilization
- Provisional Balance Sheet for the current year
- Projection of Sales, Purchase, Stock & Raw Material Consumption for the next year
- Project implement schedule
Types of Term Loans?
An intermediate-term loan runs less than three years, is paid in monthly installments from a company’s cash flow and may have balloon payments. Repayment is tied to the useful life of the asset financed. A long-term loan runs for three to 25 years, is collateralized by a company’s assets and requires monthly or quarterly payments from profits or cash flow. The loan limits other financial commitments the company may take on, including other debts, dividends or principals’ salaries, and can require an amount of profit to be set aside for loan repayment.