The typical Accion loan has a term of 24 months. The origination fee varies by region but is typically 3 to 5 percent of the loan amount.
What is a Loan Term?
A loan term is the period of time in which a borrower is expected to repay a loan. The term affects the amount of each installment payment, as longer terms generally result in lower monthly payments but higher overall interest costs.
Types of Term Loans
Term loans can be secured or unsecured. They are typically issued by banks and other financial institutions, and are often secured by assets such as real estate or inventory.
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Intermediate or Mid-Term Loans: These have tenures of up to 96 months and meet large funding needs, like purchasing machinery or boosting working capital.
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Short-Term Loans: These meet immediate working capital needs and have terms of one year or less. They are unsecured, with no collateral required.
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Term Loan A: Also known as a senior term loan, with a maturity of 5 to 6 years, the borrower amortizes this loan over time, repaying 5% to 20% of the principal yearly.
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Term Loan B: This institutional term loan aims to maximize long-term returns, with a maturity period of 6 to 7 years.
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Accion Loan Details
- Maximum borrowing amount: dependent on various factors
- Origination fee: 3 to 5 percent of the loan amount
- Repayment term: 24 months