Loan Term

When determining the maturity of a loan, a lender must take into account the borrower's ability to repay, the intended use of the loan proceeds, and the useful life of the assets being financed. It is generally advisable to choose the shortest appropriate term for the loan. The maximum maturity of a loan is determined by the intended use of the proceeds.
Note:
  • In TSoftPlus, the default payment frequency is set to Monthly. When the Loan Term (Years) is initially entered, the number of payment periods is calculated by multiplying the Loan Term by 12. If the user changes the payment frequency in the Loan Payments section, the total number of periods will be recalculated to reflect the new frequency.
  • The Use of Proceeds section and the Loan Term must be completed to calculate the applicant's SBA loan payment.
  • The Maximum Maturity on Revolving Lines of Credit under the SBA Express program is seven years.

The Loan Term section is located within the Loan Information screen, accessible by selecting LOAN INFORMATION from the submenu. The user input area is on the left side, and the results are displayed on the right side.

The following table describes the features within the Loan Term section.

Loan Term Heading Section
The term for both the years and the periods is located immediately to the right of the Loan Term heading. In the example above, it shows 15 Years with 180 Periods. This information remains visible whether the sections are expanded or collapsed.
Loan Term (Years)
Enter the loan term in years.
WEIGHTED AVERAGE TERM

This button enables you to use the Weighted Average Term calculation to determine the Loan Term. After entering the Use of Proceeds, the amounts will be automatically populated. Default term values will be entered but can be adjusted if needed, and the term calculation will update accordingly.

Note:

If you’re using the Weighted Average Term calculation to determine the Loan Term (Years), and you make changes to either the loan amount or the Use of Proceeds distribution, you’ll need to go back to the Weighted Average Term section and click APPLY. This ensures the loan term is updated based on your latest inputs.

Number of Periods
Displays the total number of periods calculated based on the loan term entered.