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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Term-out

What does it mean to term out part of a working capital facility?

ONE OF 80 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

To term out is to move the part of a revolving line or overdraft that never repays into a term loan with a repayment schedule. It is the usual remedy when a line meant to swing back to zero has quietly become permanent, because a term loan says honestly what the debt is and sets a date by which it goes. A term-out restores the line to its purpose; it does not fix whatever made the need permanent, and the desk will ask what that was.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WORKED IN

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