loan

Form of borrowing by individuals, businesses, and governments. Individuals and companies usually obtain loans from banks. The loan with interest is typically paid back in fixed monthly instalments over a period of between one and five years in the UK, although longer‐term loans and different repayment conditions may be arranged. Specific forms of loan include mortgages (transfers of property as security for loans), and debentures (loans raised by a company, paying a fixed rate of interest, and secured on the assets of the company). In business, loans are the second most important way (after retained profit) in which firms finance their expansion.