A term loan ________.
A)is typically unsecured
B)may contain restrictions or covenants
C)is based on past operating history and a firm's high probability of repayment
D)All of the above

Question

Quizplus · Accepted Answer

A term loan may be secured or unsecured, depending on the lender's requirements. It may also contain restrictions or covenants that the borrower must abide by, such as maintaining a certain debt-to-equity ratio or minimum level of liquidity. Finally, the loan is typically based on the borrower's past operating history and ability to repay, as evidenced by financial statements, cash flow projections, and other data. Therefore, all of the options given are correct.

A Term Loan ________