There are many different types of bank loans, each having their own respective purpose. All bank loans are categorized into two distinct groupings; secured and unsecured loans. Within in each category of loans there are several different sub-types of bank notes used to make a loan. Both categories require the owner of the small business to provide a personal guarantee to ensure the loan is paid back.
Short Term Notes
When a bank writes a check to the small business owner to use as the owner needs, the bank executes a short term note. Short term notes are most commonly used to meet some unexpected need or for the business to take advantage of a situation. These notes allow periods of 90 days upwards to five years in regular monthly installments to pay them back.