Original post by sky-blueFor large companies, if they need a small amount of debt, e.g. $10m. They are more likely to get bank debt (loan) and are not going to issue a bond, its expensive due to marketing, meeting sec requirements, fees to bank are higher, also the market won't be liquid enough.
When in the short term you need to meet working capital requirements you won't issue a bond you will draw on a revolver (loan).
Non investment grade large companies, e.g an LBO candidate, a loan is the cheapest form of financing.
Loans are more flexible, and terms can often be re-negotiated if needed, bonds cannot.
Bonds lock in interest rates. Bank debt for large companies are often variable, linked to a rate such as libor or the base rate. Long term this can be a good/bad thing, e.g. if rates fall you would be better off with a loan. You can pay off the bullet maturity on a bond earlier if rates did fall, however you would have to pay the par value plus a certain fraction of the coupon (%) (callable premium).