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Bank loans are frequently used to finance start-up capital and also for larger, long-term purchases. Bank loans are normally provided at a cost, which is generally interest on the owed amount. Other fees and charges may be applicable, depending on the type of loan and on the lender. Arrangement fees are commitment or administration charges payable to the lender to reserve the funds and to cover opening costs. Fees will vary depending on the complexity of the business, its size and risk. Costes -arrangement fees -interest -insurance -covenant compliance costs -professional advice Interest is charged and will vary depending on risk of default. The most common types of interest rate will be fixed or variable (a margin over base rate or London Interbank Offered Rate [LIBOR]). Advantages 1- suitable for medium- and long-term borrowing needs 2- the loan amount, length of term, repayment schedules and type of interest rate can be tailored to suit the business, including both cashflow and inco
