A bank loan that imposes restrictions or covenants on the business decisions an entrepreneur makes concerning the company's operations is called a ________.

Question

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A term loan often includes covenants or restrictions on the borrower's actions, such as limitations on taking out additional debt, making large purchases, or changing the company's ownership structure. Home equity loans are secured by the borrower's home, floor planning is a method of financing inventory for retail businesses, and a line of credit provides revolving access to funds that can be used at the borrower's discretion. None of these types of loans typically include covenants or restrictions on the borrower's actions.

A Bank Loan That Imposes Restrictions or Covenants on the Business