Medium Term Loan

Medium Term Loan

Term Loan is granted for financing Capital/Fixed Expenses of the project, on going (expansion of the existing project) and up coming projects (New projects). If the term loan is approved as a part of the project finance, the bank, normally based on the certified report of the project under construction, disburses the whole amount of the term loan on phase basis within the approved limit of the term loan. In case, the Term Loan is provided for purchase/import of plant, machinery, furniture, equipments etc., the bank may disburse the whole amount of the approved term loan in the borrower’s checking account. In both the cases the bank as far as possible makes payment directly to the exporters or suppliers by debiting the party’s term loan account.

Medium Term Loan
5 %
Interest Rate
Medium Term Loan
8.38 %
Base Rate
Medium Term Loan
13.38 %
Total Interest Rate

Last Updated Date: May 17, 2022

Nepal Investment Bank Ltd

Nepal Investment Bank Ltd. (NIBL), beforehand Nepal Indosuez Bank Ltd., was set up in 1986 as a joint endeavor among Nepalese and French accomplices. The French accomplice (holding half of the capital of NIBL) was Credit Agricole Indosuez, an auxiliary of one of the biggest financial gathering on the planet. Later in 2002, a gathering of Nepalese organizations including brokers, experts, industrialists and financial specialists gained the half shareholding of Credit Agricole Indosuez in Nepal Indosuez Bank Ltd., and in like manner the name of the Bank additionally changed to Nepal Investment Bank Ltd. 

Medium Term Loan

REQUIRED DOCUMENTS

Documents Required for Term loan

  1. Loan Application Form.
  2. Identification document like Citizenship/Passport of applicant
  3. 2 Passport size Photograph of applicant
  4. Certified Income Statement
  5. Paper of Agreements/contracts (for Fixed Income Groups) of applicant
  6. Profile of Company and its Director(s) or Firm and its Partners / Proprietor.
  7. Copy of land ownership certificate, blue print of land, latest land revenue receipt
  8. Registration documents of the company / Firm (renewed, as applicable).
  9. Other related documents as per bank request.


What Is Term Loan ? 

Term loans are basically granted for starting a new business or expansion of existing business, purchase of land/plant, machinery for setting up factory etc. It is granted for mostly 1 year to 20 years. Term loans have a specified repayment terms with fixed instalment facilities. Interest is charged on the principal amount in this case. In case of term loan, mortgage of land, plant and machinery, building may be shown as the security to avail the loan. The borrower has to pay a penalty amount in case of repayment of their borrowed money before maturity term. A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and either a fixed or floating interest rate. A term loan is often appropriate for an established small business with sound financial statements. Also, a term loan may require a substantial down payment to reduce the payment amounts and the total cost of the loan.

Who Can Apply For Term Loan ?

In corporate borrowing, a term loan is usually for equipment, real estate, or working capital paid off between one and 25 years. Often, a small business uses the cash from a term loan to purchase fixed assets, such as equipment or a new building for its production process. Some businesses borrow the cash they need to operate from month to month. Many banks have established term-loan programs specifically to help companies in this way. The term loan carries a fixed or variable interest rate based on monthly or quarterly repayment schedule, and a set maturity date. If the loan proceeds are used to finance the purchase of an asset, the useful life of that asset can impact the repayment schedule. The loan requires collateral and a rigorous approval process to reduce the risk of default or failure to make payments. However, term loans generally carry no penalties if they are paid off ahead of schedule.

Types of Term Loans

Term loans come in several varieties, usually reflecting the lifespan of the loan.

Short-term loan

A short-term loan usually offered to firms that don't qualify for a line of credit, generally runs less than a year, though it can also refer to a loan of up to 18 months or so.

Intermediate-term loan 

An intermediate-term loan generally runs more than one—but less than three—years and is paid in monthly installments from a company’s cash flow.

Long-term loan

A long-term loan runs for three to 25 years, uses company assets as collateral, and requires monthly or quarterly payments from profits or cash flow. The loan limits other financial commitments the company may take on, including other debts, dividends, or principals' salaries, and can require an amount of profit set aside for loan repayment.

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