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Loan Types
The plura Electronic Loan Application is comprehensive and supports most forms of commercial debt financing. There are no restrictions on the type of financing requested. However, the enhanced lender match functionality is currently available for the following loan types:
Term Loans
Term loans are your basic vanilla commercial loan facility that is paid off over a period
of time ranging from one year to ten years. Term Loans typically include a
fixed interest rate, monthly or quarterly repayment schedules and a fixed
maturity date. The Loan purpose for Term Loans is generally to finance long
term assets such as real estate, equipment, acquisitions, etc. Term Loans function
similarly to a home mortgage, except Term Loans tend to require level principal
payments, as opposed to mortgage-style amortization (low principal early on,
high principal later on).
Business Line of Credit
A business line of credit is a fixed amount of money that your company can draw
against from a lender. A line of credit is basically a credit card with a large
limit (and without a card). As opposed to a Term Loan, the line of credit only
requires you to pay interest on the amount actually used. It does not require principal
to be repaid until the facility matures. Interest rates on a line of credit often vary with the prime rate.
A line of credit is typically used to supplement working capital for businesses with
cyclical cash flow requirements.