Small Business Loans Are For Fixed Terms and Rates
February 15th, 2010 . by adminWhen a small business seeks financing for working capital or fixed assets, the typical business financing facilities are classified as small business loans whereby both the interest rates and loan terms are fixed.
The loan term is matched up to the life expectancy of the asset that is being purchased with the loan funds and being used as loan security.
For working capital based term loans, the amortization tends to be no more than 5 years due to the lack of tangible security for the loan.
Lines of credit are different from term loans in that the repayment is not pre-established and the outstanding balance can go up and down.
