business loan
Definition
Noun: A sum of money borrowed from a bank or financial institution specifically for business purposes, such as starting, operating, or expanding a company. It is expected to be repaid with interest according to agreed terms.
Usage
A "business loan" is a formal financial agreement. It is used when discussing corporate finance, entrepreneurship, and banking. The term specifies the loan's purpose, distinguishing it from personal loans.
Examples
- The small bakery secured a business loan to purchase a new industrial oven.
- Repaying the business loan on time is crucial for maintaining a good credit rating for the company.
- Their application for a business loan was approved to fund the opening of a second retail location.
Advanced Usage
- "to take out a business loan": The act of formally obtaining a business loan from a lender.
- The founders had to take out a substantial business loan to launch their tech startup.
- "to service a business loan": To make the regular interest and principal payments on the loan.
- The company's profits are first used to service its business loan.
Variants and Related Words
- Commercial Loan: A very close synonym, often used interchangeably, though sometimes "commercial loan" can imply a larger loan or one for more established businesses.
- Small Business Loan (SBA Loan): A specific type of business loan, often partially guaranteed by a government agency like the U.S. Small Business Administration (SBA), aimed at small enterprises.
- Business Line of Credit: A related financial product where a business can borrow funds up to a pre-approved limit, repay, and borrow again, offering more flexibility than a standard term loan.
Synonyms
- Commercial loan
- Corporate loan
- Enterprise financing
Related Phrases
- Loan agreement: The legal contract detailing the terms of the business loan.
- Collateral for a loan: Assets pledged by the business to secure the loan.
- Loan principal: The original sum of money borrowed, not including interest.
Noun
-
a bank loan granted for the use of a business
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