Question

Martin needs a loan to finance the development and construction of his new hotel. This project has a fixed completion date and requires a specific dollar amount. The best type of loan financing for this investment is a:

Answer 1

Term loan

Step-by-step explanation:

A term loan is a loan received from a bank that has a scheduled date of payment at either a floating or fixed interest rate. These loans are usually handed to established small businesses that have accurate and up to date financial statements.

The project that involves the construction of a new hotel by Martin has a completion date and requires a specific amount. Due to the specificity of the project and the amount needed, a term loan is needed to finance the project.

Answer 2

b. term loan

Step-by-step explanation:

Based on the scenario being described within the question it can be said that the best type of loan financing for this investment is a term loan. This is a type of loan in which the individual repays in regular pre-set payments over a specific pre-set period of time. Since the project has a fixed amount and date, then this would be the best option since payments can be spread across the months leading up to the due date.