Loan
Money borrowed that must be repaid with interest.
A loan is a financial arrangement where a lender provides money to a borrower who agrees to repay it with interest over a specified period. Key loan terms include principal amount, interest rate, repayment schedule, maturity date, and collateral requirements. Loans can be secured (backed by assets) or unsecured (based on creditworthiness alone).
Example
A small business takes out a $75,000 three-year loan at 8% interest with monthly payments of $2,350 to fund a new location buildout.
Why It Matters for Your Business
Loans are a primary tool for funding business growth, and understanding terms, total costs, and repayment obligations prevents financial strain.
Related Terms
More Banking Terms
ACH
Automated Clearing House - an electronic network for financial transactions.
APR
Annual Percentage Rate - the yearly cost of borrowing including fees.
APY
Annual Percentage Yield - the real rate of return on savings including compound interest.
Bank Reconciliation
Matching bank statements with internal records to identify discrepancies.
Business Checking
A bank account designed for business transactions.
Related Financial Guides & Resources
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