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Term loan

A bank advance for a specific period (normally three to ten years) repaid, with interest, usually by regular periodical payments.Term loans are common practise in the U.S. commercial banking system for business finance, and for larger borrowings the loan may be syndicated, i.e. the provision of funds and the interest earned are shared between several banks. Similar facilities are availbale in Britain, mainly from subsidiaries of commercial banks or other institutions such as Finance for Industry, but overdrafts are the most common form of bank loan, and are a cheaper form of finance. Unlike an overdraft, the interest of a term loan is fixed and the loan cannot be recalled in advance of its maturity date.

Reference: The Penguin Dictionary of Economics, 3rd edt.