A demand loan is a type of financing that the lender can call for repayment at any time, even if the borrower is meeting all terms and conditions under the loan agreement.
For example, a business secures a $200,000 demand loan from its bank to fund short-term working capital. Three years later, the bank determines the borrower's risk has increased and issues a demand notice requiring repayment of the full balance within 30 days.
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