Which of the following best describes a term loan?
A) are not split between current and long-term portions
B) common form of long-term financing
C) allows a company to borrow a variable amount of money
D) not usually secured by certain assets

Question

Quizplus · Accepted Answer

A term loan is a common form of long-term financing, typically used for major capital expenditures or business acquisitions. It is often repaid in fixed installments over a period of years, and may be secured by specific assets such as property or equipment. It is typically split between current and long-term portions on a company's balance sheet. A term loan does not allow a company to borrow a variable amount of money, as this would be more characteristic of a line of credit.

Which of the Following Best Describes a Term Loan