Small businesses often face cash flow challenges. Business financing, such as a term loan, can provide working capital to cover expenses.

A term loan is a lump sum of money repaid over time with an agreed-upon interest rate. Small businesses commonly use term loans to purchase equipment or other fixed assets. The loan has a fixed or variable interest rate, a set maturity date, and a repayment schedule. It requires collateral and a moderate approval process to reduce risk. However, there are generally no penalties for early payment.