Question

In general, term loans can be created more quickly than bond issues because they (1) tend to be negotiated directly with the lender, (2) require less formal documentation than bond issues, and (3) are not registered with the Securities and Exchange Commission (SEC).a. True b. False

Answer 1

Answer:

The correct answer is letter "A": True.

Explanation:

Term loans are those where individuals or organizations request a certain amount of money from a financial institution with the promise the individual or institution will be in charge of a series of periodical payments (principal + interest) to cover the debt.

Term loans are privately negotiated between borrowers and lenders, offering the advantage of speed because there is no need for filings with the Securities and Exchange Commission (SEC) or other regulatory entities to request them.