Short-term bank loan

A short-term loan can finance temporary operating needs or a defined cash gap. Its terms specify amount, interest, repayment, security, covenants and fees; principal may be repaid at maturity or in instalments. Unlike a flexible overdraft, a term loan commonly provides a fixed amount and schedule, though products vary. Match repayment to reliable cash inflows and assess renewal risk if it is used for permanent needs. The quoted interest rate is not the only cost when arrangement fees or required balances apply.