Repayment is usually structured to be interest only on a monthly basis with an annual maturity. Lines of credit are typically secured by the inventory and accounts receivable of the business. Term Loans Term loans provide a source of intermediate funding for equipment purchases, vehicle purchases, inventory, and working capital. Repayment is usually structured to provide monthly or quarterly payments of principal and interest.
Terms generally require repayment within five years.
These loans are typically secured by the assets being acquired with the loan proceeds. Repayment generally ranges from fifteen to twenty years. Normally the loan amount will not exceed eighty percent of the appraised value of the land and building. Letters of Credit A Letter of Credit can allow a business to obtain credit from a supplier under more favorable terms than otherwise would have been available. The letter of credit document provides the bank's promise to pay a supplier in the event the business does not fulfill its payment obligation.