3. Equity Financing

3.3. Types of loans


Types of loans
Type of loan Designation Use
Maturation

short term loan

up to 1 year
 

medium term loan

1 - 10 years
 

long term loan

more than 10 years
Characteristics

annuity loan

fixed loan amount
 

installments

fixed installments
 

fixed rate loan

fixed rates
Use case

overdraft

variety
 

working capital loan

variety
 

seasonal loan

for seasonal peek capital needs (typical in farming)
 

interm/bridging loan

to cover periods before a major loan materializes
 

manufacturer-, supplier credit

in emergencies
 

bill of exchange

special case
 

factoring

special case
 

leasing

to finance machinery

For more information click on the terms linked to the glossary.