- 1 Marks
Question
A source of financing, negotiated between a bank and a company for a duration of 4–10 years at a fixed rate of interest, is called:
A. Finance lease
B. Term loan
C. Acceptance credit
D. Factoring of debtors
E. Preference share
Answer
B. Term loan
Explanation: A term loan is a form of long-term financing where a company borrows a lump sum from a bank for a specified duration, typically between 4 to 10 years, at a fixed interest rate. This makes “B. Term loan” the correct answer.
- Tags: Financing, Long-term Financing, Term Loan
- Level: Level 1
- Topic: Basics of Business Finance and Financial Markets
- Series: MAY 2018
- Uploader: Theophilus