A term loan is a specific amount provided by banks and financial institutions that must be repaid over a set period of time, usually between 1 to 10 years. It is used to finance the purchase of fixed assets or provide working capital. Term loans carry a fixed interest rate and include provisions like periodic reporting requirements and restrictions on additional borrowing without permission. They are secured by assets purchased with the loan proceeds or other collateral and must be repaid through installments that reduce either the interest or principal over time.