Term loan

"Term" refers to the time for which money is required and the period over which the loan repayment is scheduled. Term loans differ from lines of credit in that term loans provide a single payout of a specified amount at the beginning of the term, whereas lines of credit allow the borrow to withdraw loan proceeds as needed, up to a specified amount. Term loans often carry lower interest rates than lines of credit such as working capital operating loans, because the term is fixed and the return to the lender is more predictable.