Bank Loan

• Is a bank loan short or long term?

  Long-term
• What is a bank loan and what does the repayment amount depend on?

  • an amount of money borrowed for a set period with an agreed repayment schedule
  • repayment amount depends on the size and duration of the loan, as well as the rate of interest
• What are the benefits of a bank loan?

  • guaranteed money for a certain period
  • no control is lost (bank doesn't need a share of the business)
  • interest rates may be fixed
  • repayments made in installments
• What are the drawbacks?

  • time consuming
  • security (has to be given to bank on some assets of business' personal assets)
  • lack of flexibility (interest must be paid on full loan amount)
  • affects credit score