Term loans come with a fixed payment structure, that stays the same for the existence of the loan and thus allows businesses to budget based off that payment. Along with a fixed interest, there is also a fixed term, that is substantially longer than other forms of financing. This is beneficial as an operator because you have a clear understanding of the terms, the payment, and how you can optimize the capital provided. Term loans provide all the capital up-front in one lump sum payment. Typically, a business would use a term loan for a capital-intensive investment, project, or piece of equipment. The major difference between term loans and other forms of financing is that personal credit score plays as big a role as business financials. In addition lenders will typically ask, for a business plan, a defined use of the business capital and how it will increase sales and profits once deployed.