Term Loans

Term Loans

This is a contract between a borrower and a lender, that is Standard Chartered Bank whereby the lender provides the borrower with a certain amount of currency, be it domestic or foreign, for a period in excess of one year and up to 5 years. Term Loans are a structured form of borrowing which is frequently intended for general corporate purposes and may be intended to finance specific transactions, specific assets and the funding requirements that this generates. They are intended for the financing of longer term borrowing requirements as opposed to overdrafts that are for the financing of short-term working capital requirements.

Term Loans
5 %
Interest Rate
Term Loans
7.41 %
Base Rate
Term Loans
12.41 %
Total Interest Rate

Last Updated Date: May 16, 2022

Standard Chartered Bank Nepal Ltd

In 1987, when it was first formed as a joint venture, Standard Chartered Bank Nepal Limited became operational. The Standard Chartered Group's global network provides the bank with a rare opportunity to provide genuinely international banking services in Nepal. A wide range of banking products and services are provided by Standard Chartered Bank Nepal Limited to a wide range of customers, including individuals, local mid-market firms, multinationals, main public sector companies, government companies, airlines, hotels, as well as the DO segment comprising embassies, aid organizations, NGOs and INGOs. Corporate Social Responsibility is an important part of the vision of Standard Chartered to become the world's best foreign bank and is the core pillar of the Bank's principles. Standard Chartered Bank Nepal Limited focuses on children's initiatives, particularly in the fields of health and education, and supports non-governmental organizations engaged in community charitable activities.

Term Loans

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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