Table of Contents
Requirements for Term Loan
- Latest Balance Sheet
- Average DSCR, not less than 1.75:1
- Fair credit rating for the last three years
- Total Debt-equity ratio that is not higher than 4.5:1
- Total Term Liability and equity ratio that is not more than 3:1.
- Good financial performance in contexts of Sales/turnover and profits.
- Term loan is convertible into equity
- Loans are known as secured loans
- There is a fixed rate of interest on term loan
- The maturity period of term loan is between 5 to 10 years
- There could be restrictions by the lenders on the borrowers to not to raise additional loan, maintain a minimum asset base and repay existing loans