There are several loan types, most of which fall into the available categories offered by LoanPro. They are: Credit Limit, Flooring, Installment, and Lease. This article gives a description of each loan type.
This is a type of loan where there is a set maximum amount that can be borrowed (credit limit). Regular payments are typically made on the the loan, but funds can be advanced throughout the life of the loan up to the credit limit on the loan. This is different than a revolving line of credit in that you will be required to enter a term for the loan and the loan is designed to end at a particular point.
A flooring loan is a loan given in order to finance inventory for a company. Flooring loans are typically repaid quickly (e.g. 90 days) and a total credit limit is usually imposed on the company receiving flooring loans. Payments on flooring loans are usually referred to as curtailments.
Installment loans are the most common types of loans. These loans are given to finance lots of different things and have a definite length and repayment schedule. Installment implies that the loan will be repaid in regular, predetermined payments. Installment loans usually work like this.
Leases are calculated altogether differently than any of the other loan types. A lease payment is not a repayment of principal, but rather a payment that covers the depreciation on an asset. Lease payment also include a lease charge or rent charge portion which is the profit portion of a lease. The reason for this is that ownership of an asset when a lease is given is never transferred to the lessee. For more information on leases see Typical Lease Calculation.