The type and purpose of the loan. Matching the type of loan to the purpose is critical or the issuer risks either refinancing risk or overpaying for long-term capital for a short-term need. Shorter term debt supports the short-term needs, like working capital, or the expectation is that the assets will convert to cash quickly. Longer term loans generally support longer term assets where the profits are also longer term. For shorter term loans, generally, a revolving credit facility is used. This is often called a revolver. Sometimes it's called a swingline, which is really just another type of revolver. For longer term debt, there are more options. A term loan is the most common form of bank loan. This type of loan often amortizes or is paid back according to a predetermined schedule, but that is not always the case. In a more complex structure, there can be multiple term loans called A, B, C and even D loans. Beyond that, there can be loans that have a secondary claim on the assets called a second lien. In a more aggressive market, covenant light loans are loans that give the borrower maximum flexibility. And finally, bridge loans are highly risky loans that are put in place temporarily to bridge more permanent financing. The longer a loan is outstanding, the more risk is involved to the lender, and therefore, the price usually goes up. Most investment grade loans not being used for M & A come under the category, general corporate purposes. This is to give the borrower leeway in using the funds as needed. The bank, via conversations with the borrower, should have a sense of exactly what the company intends to do with the money and the financial should back this up. In leverage lending, which is where most of the bank loans today are, this is critical. There are many reasons why a borrower needs funds. To increase the level of current or long term assets. This could be either inventory or CapEx, or for an acquisition, which would be acquiring all the assets of another company, to pay an extraordinary liability, like a lawsuit, to return value to shareholders through either dividend or share repurchase, to replace cash that's been depleted by operating losses. All companies need a cash cushion. This is for downturns in cyclicality. To refinance an existing loan, either through recapitalization or an LBO. Some of these make lenders happy because they involve growth. Some are less desirable because they plug funding gaps, but don't necessarily contribute to future cash flow growth.