Term loans are best described by which of the following?
A) They are loans with a maturity of less than one year.
B) They are available from commercial banks, insurance companies, pension funds, commercial finance companies, and manufacturers' financing subsidiaries.
C) They must be secured.
D) They must be repaid on an annual schedule only.

Question

Quizplus · Accepted Answer

Term loans are typically medium- to long-term loans that are available from a range of lenders including commercial banks, insurance companies, pension funds, commercial finance companies, and manufacturers' financing subsidiaries. They can be used to finance a variety of business activities, including capital investments, equipment purchases, and working capital.

Options A, C, and D are not accurate descriptions of term loans. Term loans can have maturities of less than one year or more than one year, and they can be secured or unsecured. They are typically repaid on a schedule that matches the borrower's cash flow, which could be monthly, quarterly, semi-annually or annually.

Term Loans Are Best Described by Which of the Following