Credit and Lending

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30-Day Delinquency

30-Day Delinquency refers to loans or credit accounts that are overdue by one month.

5 Cs of Credit

The 5 Cs of credit assess character, capacity, capital, collateral, and conditions when evaluating borrower creditworthiness.

60-Plus Delinquencies

60-Plus Delinquencies is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

7(a) Loan Program

These are the most common type and can be used for various purposes, including working capital, equipment purchases, and real estate.

90-Day Delinquency

A 90-Day Delinquency occurs when a loan payment is overdue by three months, which can lead to severe financial repercussions, including foreclosure.

A2

An A2 credit rating is an upper-medium-grade rating level on Moody's scale, indicating relatively low credit risk.

Accelerated Amortization

Accelerated amortization repays loan principal faster than the original schedule, reducing interest cost and outstanding balance sooner.

Acceleration

Acceleration in finance refers to a lender's right to demand early repayment of a loan when the borrower defaults on their payment or other contractual obligations.

Accounts Receivable Financing

Accounts Receivable Financing is a type of financial arrangement where a company receives funding based on its receivables.

Accounts Receivable Turnover Ratio

The Accounts Receivable Turnover Ratio evaluates how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.

Act of Bankruptcy

An act of bankruptcy is debtor conduct that can support bankruptcy proceedings or signal inability to meet obligations.

Add-On Interest

Add-on interest calculates borrowing cost on the original principal rather than the declining balance, raising effective cost.

Adjusted Balance Method

The Adjusted Balance Method is a technique used by credit card companies to calculate the interest charged on an outstanding balance.

Advance

An advance is money provided before final settlement or under a loan, credit facility, salary arrangement, or payment account.

Affinity Card

Affinity Card is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Age Analysis

Age analysis groups receivables or debtor balances by how long they have been outstanding to support credit control and collections.

Agricultural Credit Association

An Agricultural Credit Association (ACA) is part of the Farm Credit System (FCS) offering direct loans and financial products to farmers, ranchers, and agribusinesses.

Agricultural Finance

Agricultural finance provides credit, capital, risk tools, and payment structures for farming and agribusiness operations.

Agricultural Loans

Agricultural loans finance farm operations, equipment, land, livestock, and seasonal working-capital needs for agricultural borrowers.

Allowance for Credit Losses

Allowance for Credit Losses is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Altman Z-Score

Altman Z-Score is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Amortization Period

Amortization period is the time over which scheduled payments would fully repay a loan principal and interest.

Amortization Term

Amortization term is the repayment schedule length used to calculate periodic loan payments and principal reduction.

Amortized Loan

An amortized loan is repaid through scheduled payments that include interest and gradually reduce principal.

Ancillary Credit Business

An ancillary credit business provides related credit services such as brokerage, debt counseling, collection, administration, or credit reporting.

Annual Debt Service

Annual debt service is the total principal and interest a borrower must pay on debt over a year.

APR

APR annualizes a loan's stated interest and required charges so borrowers can compare credit costs across offers.

Annulment

Annulment in bankruptcy cancels or reverses a bankruptcy order, changing the debtor's status and creditor enforcement position.

APR Considerations

APR considerations cover how fees, compounding, introductory rates, and disclosure rules affect comparisons between credit offers.

Asset Financing

Asset financing uses equipment, receivables, inventory, or other assets to secure funding for purchases, working capital, or liquidity needs.

Asset Protection Scheme

An asset protection scheme transfers or shares losses on troubled assets to stabilize lenders or financial institutions.

Asset Quality

Asset Quality is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Structured Credit

Asset-backed security, ABCP, CBO, pass-through, securitization vehicle, and structured-credit terms.

Asset-Based Finance

Asset-based finance links borrowing capacity to collateral values, often using receivables, inventory, or equipment as the borrowing base.

Asset-Based Lending

Asset-based lending provides business credit secured primarily by receivables, inventory, equipment, or other operating assets.

Attachment

Attachment is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Automatic Premium Loan

An automatic premium loan uses a life insurance policy's cash value to cover unpaid premiums and keep coverage active.

Automatic Stay

An automatic stay immediately pauses most creditor collection actions after a bankruptcy filing, protecting the estate and debtor while the case proceeds.

Available Credit

Available credit is the unused portion of a borrower's credit limit after subtracting outstanding balances and pending holds.

Bad Credit

Bad credit describes a weak credit history or low credit score that can limit borrowing options and raise loan pricing.

Balance Transfer

A balance transfer moves debt from one credit account to another, often to obtain a lower promotional interest rate.

Balance Transfer Card

A credit card designed to transfer existing debt from high-interest cards to this card, often with a lower or zero introductory interest rate.

Balloon Loan

Loan that uses smaller scheduled payments during the term and leaves a large remaining balance due at maturity.

Balloon Payment

Large final payment due at maturity after smaller scheduled installments leave part of the principal still outstanding.

Bank Credit

Bank credit is borrowing capacity made available by banks through loans, credit lines, overdrafts, and other lending arrangements.

Bank Guarantee

A bank guarantee is a bank's promise to pay if a customer fails to meet a specified obligation.

Bank Line

A bank line is a credit arrangement or lending indication that gives a borrower access to funds up to a stated limit.

Bank Loan

A bank loan is credit extended by a bank under agreed principal, interest, collateral, covenant, and repayment terms.

Bank Syndicate

A bank syndicate is a group of banks that jointly underwrite, fund, distribute, or administer a loan or securities transaction.

Banker's Reference

Banker's Reference is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Bankruptcy

Bankruptcy is a court-supervised process for resolving debts when a borrower cannot meet obligations under normal payment terms.

Bankruptcy and Insolvency

Banking-adjacent bankruptcy and insolvency pages covering bankruptcy courts, trustees, chapters, petitions, discharge, and insolvency procedure.

Bankruptcy Auction

A bankruptcy auction sells debtor assets under court or estate oversight to raise proceeds for creditors or support a restructuring plan.

Bankruptcy Code

The Bankruptcy Code is the body of U.S. federal law governing bankruptcy filings, creditor rights, debtor protections, and court-supervised resolutions.

Bankruptcy Court

Bankruptcy court is the specialized federal court that oversees bankruptcy cases, debtor protections, creditor claims, and plan confirmation.

Bankruptcy Estate

A bankruptcy estate includes debtor property and rights brought under court supervision for administration, sale, exemption, or creditor distribution.

Bankruptcy Law

Bankruptcy law governs how insolvent debtors seek protection, restructure obligations, liquidate assets, and resolve creditor claims.

Bankruptcy Petition

A Bankruptcy Petition is a formal document filed to initiate bankruptcy proceedings, detailing the debtor's financial status and specific chapter under which they are filing.

Bankruptcy Prediction

Bankruptcy prediction uses financial ratios, market signals, and credit models to estimate the likelihood of severe distress or bankruptcy.

Bankruptcy Trustee

A Bankruptcy Trustee is a person appointed by the court to manage the debtor's estate during the bankruptcy process.

Beacon Credit Score

Beacon credit score is a legacy Equifax-branded consumer credit score used in lending and credit-risk evaluation.

Bespoke CDO

A bespoke CDO is a customized structured credit transaction built around investor-selected reference assets, tranche terms, and risk exposures.

Bilateral Bank Facility

A bilateral bank facility is a credit agreement between one borrower and one lender rather than a syndicated lender group.

Borrower

A borrower is a person, company, or entity that receives credit and is obligated to repay under agreed terms.

Borrowing

Borrowing involves incurring debts to finance spending, utilized by individuals, firms, and governments to achieve various financial goals and investment opportunities.

Borrowing Base

Borrowing base is the collateral-linked amount a lender will advance under an asset-based credit facility.

Bridge Loan

A bridge loan is short-term financing used to cover a funding gap until permanent financing, sale proceeds, or another event occurs.

Broker Loan Rate

Broker loan rate is the rate charged on loans to brokers, often tied to margin lending and securities financing.

Bullet Loan

Loan structure with principal generally due in one lump sum at maturity instead of being amortized throughout the term.

Bullet Repayment

Repayment structure where principal comes due in one large maturity payment rather than being reduced steadily over time.

Buyer Credit

Buyer credit is trade financing in which a lender funds an overseas buyer so an exporter can be paid under agreed terms.

Call Loan

A call loan is a demand loan that the lender can require the borrower to repay at short notice.

Canceled Debt

Canceled debt is an obligation a creditor forgives or writes off, which may affect borrower income, credit reporting, and tax treatment.

CARD Act of 2009

The CARD Act of 2009 is a U.S. credit-card law governing disclosures, rate changes, fees, and consumer protections.

Card Issuer

Card Issuer is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Cash Advance

A cash advance lets a borrower access cash through a credit card, line of credit, or short-term lending product.

Cash on Delivery

Cash on Delivery is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy lets a business or eligible debtor reorganize debts while operating under court supervision.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy lets qualifying individuals repay debts through a court-approved plan while keeping certain assets.

Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is a legal process under the United States Bankruptcy Code that involves the liquidation of a debtor's non-exempt assets to repay creditors.

Chapters 12 and 13

Chapters 12 and 13 bankruptcy provide repayment-plan frameworks for family farmers, fishermen, and qualifying individuals.

Charge Buyer

A Charge Buyer, also referred to as a Credit Buyer, is an individual or entity that acquires goods or services on credit.

Charge Card

Charge Card is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Charge-Off

Accounting recognition that a lender no longer expects to collect a debt in full, even though collection efforts may continue.

Charge-Off Rate

Portfolio-loss metric comparing charge-offs, usually net charge-offs, with the loan base used for the measurement period.

Charged-off Debt

Charged-off debt is a loan or receivable a creditor has written off for accounting purposes while collection rights may still remain.

Cheque-In Facility

A cheque-in facility supports cheque deposit, processing, or credit availability arrangements within banking and cash-management services.

Chose in Action

A Chose in Action is a personal right to sue for recovery, becoming a possessory asset upon the successful completion of a lawsuit.

Co-Borrower

A co-borrower shares legal responsibility for repaying a loan and may share ownership or benefit from the financed asset.

Co-Funding

Co-Funding involves collaborative funding from multiple sources for a single project, aiming to pool resources and share risks for achieving common objectives.

Collateral

Collateral is property or financial assets pledged to secure a loan, obligation, or credit exposure.

Collateral Assignment

Collateral assignment pledges rights in an asset, often insurance cash value or benefits, to secure a debt.

Collateral Management

The practice of overseeing and ensuring the safety and valuation of collateral to mitigate financial and operational risks in various industries, including finance and banking.

Collateralize

To collateralize means to pledge assets as security for repayment or performance of an obligation.

Collateralized Debt Obligation

A collateralized debt obligation is a structured credit vehicle that pools debt exposures and issues tranches with different risk and return profiles.

Collateralized Debt Position

A collateralized debt position locks collateral in a smart contract or lending structure to support borrowing against the pledged assets.

Collateralized Loan

A collateralized loan is secured by pledged assets that the lender may claim if the borrower defaults.

Collection

Collection is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Commercial Agricultural Loans

Commercial agricultural loans finance farm operations, equipment, land, inputs, inventory, or agribusiness working capital.

Commercial Collection Agency

Commercial Collection Agency is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Commercial Lending

Commercial lending covers loans and credit facilities made to businesses for operations, investment, acquisitions, or refinancing.

Commercial Loan

A commercial loan is credit extended to a business for working capital, equipment, expansion, acquisitions, or operating needs.

Commercial Paper

Commercial paper is unsecured short-term debt issued by creditworthy companies to fund working capital and other near-term cash needs.

Commitment Letter

A Commitment Letter is an official notification from a lender to a borrower indicating that the loan application has been approved and outlining the terms of the prospective loan.

Community Reinvestment Act

The Community Reinvestment Act encourages insured banks to help meet credit needs in the communities they serve.

Comparative Credit Analysis

A method of company evaluation where a firm is compared with other similar firms that have a desired credit rating to determine appropriate accounting ratio targets.

Composition

An agreement between a debtor and their creditors discharging debts in exchange for a proportion of what is due.

Composition of Creditors

An arrangement in which creditors agree to accept partial payment in full settlement of their claims, commonly seen in small, unincorporated business failures.

Consolidation Loan

A consolidation loan combines multiple loans or debts into a single loan, often with the aim of reducing the total monthly payments.

Consortium Lending

Consortium Lending involves multiple banks coming together to provide a large loan to a single borrower, sharing both risks and returns.

Constant-Payment Loan

A constant-payment loan uses equal periodic payments that cover interest and principal over the amortization schedule.

Consumer Borrowing

Consumer borrowing is household credit used for purchases, liquidity, education, vehicles, homes, or other personal finance needs.

Consumer Credit

Consumer Credit refers to financial products that allow consumers to borrow funds or make payments over time.

Consumer Credit Act

The Consumer Credit Act regulates consumer lending, credit agreements, disclosures, licensing, and borrower protections in covered credit transactions.

Consumer Credit Agreement

A consumer credit agreement is the legal contract setting repayment, interest, fees, disclosures, and borrower rights for consumer credit.

Consumer Debt

Consumer debt refers to the total amount of borrowed money that individuals use for personal, family, or household purposes.

Contingent Interest

Contingent interest is interest payable only if a specified event or performance condition occurs, changing expected loan or security cash flows.

Convertible Debt

Convertible debt is borrowing that can convert into equity under specified terms, combining creditor protection with potential ownership upside.

Countervailing Credit

Countervailing credit is a back-to-back credit arrangement used in trade finance to support payment security between parties.

Covenant Lite

Covenant-lite debt gives borrowers fewer maintenance covenant restrictions, affecting lender protections and downside control.

Cram Down

Cram down refers to the reduction of various classes of debt to a lower amount during bankruptcy proceedings under Section 1129(b) of the Bankruptcy Code.

Credit

Credit is the ability to borrow money, receive goods or services now, or defer payment based on a promise to repay.

Credit Administration

Credit Administration is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Agreement

A credit agreement is a legally binding contract between a lender and a borrower that specifies the terms and conditions under which credit is extended.

Credit Analyst

A Credit Analyst is a financial professional responsible for evaluating the creditworthiness of individuals, businesses, and other entities.

Credit Authorization

Credit authorization approves a borrower, cardholder, or transaction for credit use under specified limits and controls.

Credit Balance

Credit Balance is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Bureau

A credit bureau collects and reports borrower credit information used by lenders, insurers, landlords, and other permitted users.

Credit Bureau Scores

Credit bureau scores are numerical risk scores derived from credit-report data to estimate borrower repayment risk.

Credit Card

A credit card is a revolving credit product that lets cardholders borrow for purchases, cash advances, or transfers up to a limit.

Credit Card Authorization

Credit card authorization is the approval or decline step that checks account status, available credit, and fraud controls before a transaction clears.

Credit Card Balance

Credit card balance is the amount owed on a card account from purchases, fees, interest, transfers, or cash advances.

Credit Card Fees

Credit card fees are charges such as annual fees, late fees, balance-transfer fees, cash-advance fees, or foreign transaction fees.

Credit Card Fraud

Credit card fraud is unauthorized or deceptive use of a card account, card number, or payment credential.

Credit Card Holder

A credit card holder is the person authorized to use a credit card account and responsible under the card agreement.

Credit Card Kiting

Credit card kiting involves using multiple credit cards to create an artificial float by exploiting billing cycles, often leading to unauthorized accumulation of debt.

Credit Card Warning Bulletin

Credit Card Warning Bulletin is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Credit Control

Credit control sets policies for extending, monitoring, and collecting customer credit to manage receivables, cash flow, and default risk.

Credit Counseling

Professional services that provide advice and support for debt management and financial planning without direct collection attempts.

Credit Creation

Credit creation is the banking process through which lending expands deposits and increases the amount of credit circulating in the economy.

Credit Crunch

Credit Crunch is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Credit Cycle

A credit cycle is the expansion and contraction of lending conditions, borrower risk appetite, defaults, and credit availability.

Credit Derivative

A credit derivative transfers or prices credit risk without requiring direct ownership of the underlying debt instrument.

Credit Disability Insurance

Credit Disability Insurance is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Downgrade

A credit downgrade refers to the reduction in the credit rating of a bond, which signifies increased perceived default risk.

Credit Enhancement

Credit enhancement improves the credit profile of a loan or security through support such as guarantees, overcollateralization, subordination, or insurance.

Credit Facility

A credit facility is an arranged source of borrowing that lets a borrower draw funds under specified terms and limits.

Credit Freeze

A credit freeze restricts access to a credit report, helping prevent new accounts from being opened without authorization.

Credit History

Credit history records a borrower's past borrowing, repayment, delinquencies, account age, and credit usage patterns.

Credit Insurance

Credit insurance provides protection against potential losses incurred due to the non-payment of debts by buyers.

Credit Life Insurance

Credit Life Insurance is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Limit

A credit limit is the maximum amount a lender allows a borrower to owe on a credit card, line, or facility.

Credit Line

A credit line is a borrowing limit that allows repeated draws and repayments subject to lender terms.

Credit Memo

Credit Memo is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Memorandum

A Credit Memorandum is a document issued to acknowledge a customer's account credit, typically arising from returns, overpayments, or corrections.

Credit Monitoring

Credit monitoring involves continuously reviewing credit activities to identify potential errors, fraud, and unauthorized transactions, ensuring financial security.

Credit Note

A Credit Note is a financial document that signifies the acknowledgment of debt owed by the issuer to the customer, usually due to the return of goods or services.

Credit Order

Credit Order is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Period

Credit Period is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Policy

Credit Policy is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Provider

Credit Provider is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Pull

A credit pull is a request to access credit-report information for underwriting, account review, identity checks, or monitoring.

Credit Quality

Credit quality assesses the likelihood that a borrower, issuer, or obligation will meet promised payments.

Credit Rating

A credit rating is an agency or lender assessment of borrower or issuer creditworthiness and expected repayment risk.

Credit Rating Agency

A credit rating agency evaluates issuer and debt creditworthiness and publishes ratings used by investors, lenders, and regulators.

Credit Rationing

Credit rationing occurs when lenders limit credit availability even if borrowers are willing to pay higher rates.

Credit Report

A credit report summarizes credit accounts, payment history, inquiries, public records, and identifying information for underwriting review.

Credit Report Fee

A credit report fee is a charge for obtaining borrower credit information during lending, leasing, or underwriting review.

Credit Reporting Act (CRA)

A credit reporting act governs how consumer credit information is collected, reported, disputed, and protected.

Credit Requirements

Credit requirements are the standards and criteria that creditors use to evaluate the eligibility of potential debtors for credit.

Credit Restriction

Credit Restriction is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Risk Analyst

Credit Risk Analyst is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Credit Risk Insurance

Credit Risk Insurance is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Risk Management

Credit Risk Management is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Credit Sale

Credit Sale is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Score

Borrower-risk score built from credit-report data, widely used in loan approval, pricing, and other screening decisions.

Credit Scoring

Credit scoring converts borrower and credit-history data into a risk score for lending, pricing, and account-management decisions.

Credit Scoring Models

Credit scoring models use statistical methods to assign a credit score to borrowers, helping lenders evaluate the likelihood of repayment.

Credit Squeeze

A policy package intended to restrain the level of demand by restricting credit through various measures such as limiting the money supply and raising interest rates.

Credit Standing

Credit Standing refers to the reputation one earns for paying debts, which tends to be more qualitative than quantitative, differentiating it from credit rating.

Credit Terms

Credit Terms is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Credit Underwriting

Credit underwriting involves evaluating the creditworthiness of a potential borrower based on their credit history and financial condition.

Credit Utilization Ratio

Credit utilization ratio compares outstanding revolving balances with available credit limits and can affect consumer credit scores.

Credit Watch

Credit watch flags a rating under near-term review because new information could lead to an upgrade, downgrade, or confirmation.

Credit-Linked Note (CLN)

A credit-linked note combines a debt security with embedded credit exposure to a reference borrower, index, or portfolio.

Credit Risk

Credit-risk terms for borrower default, counterparty exposure, sovereign and political credit risk, migration models, and credit-risk transfer.

Creditor

Creditor refers to an individual or entity to whom money is owed by a debtor, with legal rights to demand and recover money.

Creditors' Buffer

The fixed capital of a company, which provides assurance to creditors by indicating a stable financial base that cannot be reduced or distributed without special permission.

Creditors' Committee

A creditors' committee represents unsecured creditors in bankruptcy and helps review debtor proposals, asset sales, and reorganization plans.

Creditors' Meeting

A creditors' meeting lets creditors review debtor information, coordinate claims, and vote or consult on restructuring or insolvency matters.

Creditworthiness

Creditworthiness is a borrower-credit concept used to assess repayment behavior, credit quality, and underwriting risk.

Cross-Default Clause

A cross-default clause triggers default under one agreement when the borrower defaults on another specified debt obligation.

Crown Loan

A Crown Loan is a specific type of demand loan intended for the children or parents of the lender.

DDD

A DDD credit rating indicates very high default risk or distressed credit quality under rating-agency scales that use the grade.

Deadweight Debt

Deadweight debt is borrowing that does not produce enough economic benefit to support repayment or improve borrower capacity.

Debenture

A debenture is a debt instrument backed mainly by the issuer's creditworthiness rather than specific collateral.

Debt

Debt is a financial obligation that one party (the debtor) owes to another party (the creditor).

Debt Administration

Debt administration covers payment tracking, covenant monitoring, reporting, and refinancing control after debt has been issued or borrowed.

Debt Buyer

A debt buyer purchases delinquent or charged-off debt at a discount and then seeks to collect, settle, or resell the claims.

Debt Capital

Debt capital is capital a business raises by borrowing rather than by selling ownership.

Debt Capital Market (DCM)

Debt capital markets help companies, governments, and financial institutions raise funding through bonds, notes, and other debt securities.

Debt Consolidation

Debt consolidation is the process of merging multiple debts into a single loan, which can potentially lower interest rates and simplify repayment terms.

Debt Covenant

A debt covenant is a loan or bond condition that restricts borrower behavior or requires financial thresholds to protect creditors.

Debt Discharge

Tax pages covering forgiven debt, canceled balances, and when discharged debt becomes taxable income.

Debt Financing

Borrowing-based capital raising through loans, bonds, notes, and debentures.

Debt for Equity

A debt-for-equity exchange converts creditor claims into ownership interests, often as part of a distressed restructuring.

Debt Forgiveness

Debt forgiveness cancels part or all of a borrower's obligation, changing creditor recovery, borrower tax treatment, and credit outcomes.

Debt Instrument

A debt instrument is a contract or security that creates a borrower obligation and a creditor claim for repayment.

Debt Issue

A debt issue is the process and resulting security package through which an issuer raises borrowed funds from investors or lenders.

Debt Management

Debt management coordinates repayment, refinancing, budgeting, and creditor negotiation to keep borrowing obligations under control.

Debt Management Plan

A debt management plan organizes borrower repayments, often through a counseling agency, to resolve unsecured debts over time.

Debt Market

The debt market, also known as the bond market or fixed-income market, is a financial marketplace where investors can trade securities that represent debt.

Debt Obligation

A debt obligation is a contractual responsibility to repay borrowed funds, interest, or other credit claims under agreed terms.

Debt Recovery

Debt recovery is the process of collecting overdue amounts through internal collections, negotiated settlement, legal action, or asset realization.

Debt Relief

Debt relief reduces, restructures, postpones, or cancels obligations to make borrower repayment more sustainable.

Debt Rescheduling

Debt rescheduling changes repayment dates, maturities, or installment timing to relieve borrower stress without necessarily reducing principal.

Debt Restructuring

Debt restructuring modifies debt terms, balances, priority, or repayment plans to address distress and improve recoverability.

Debt Retirement

Debt retirement is repayment, redemption, or extinguishment of outstanding debt through scheduled payments, refinancing, sinking funds, or buybacks.

Debt Service

Debt service is the scheduled cash required to pay interest, principal, fees, or lease obligations on outstanding debt.

Debt Service Ratio

The debt service ratio compares debt payments with income or external earnings to assess repayment burden and credit risk.

Debt Servicing

Debt servicing refers to the process of making regular payments on debt, covering both interest and principal repayments.

Debt Servicing Ratio

The debt servicing ratio measures how much income is consumed by debt payments and helps lenders judge repayment capacity.

Debt Settlement

Debt settlement involves negotiating with creditors to pay a lower amount than the total debt owed, often agreeing on a one-time payment to settle the debt for less.

Debt Swaps

Debt swaps are financial strategies that involve the exchange of existing debt for another type of asset or commitment, such as equity.

Debt vs. Equity Financing

Debt-versus-equity financing compares borrowing with ownership capital and the tradeoffs in control, repayment, risk, and cost of capital.

Debt vs. New Money

Debt vs. New Money is a credit or lending concept used in borrowing, debt markets, underwriting, or repayment-risk analysis.

Debt-for-Nature Swap

A Debt-for-Nature Swap involves converting national debt into funding for environmental projects, serving as a form of sovereign debt swap that promotes environmental conservation.

Debt-to-Capital Ratio

Debt-to-capital ratio measures how much of a company's permanent capital structure is funded by debt rather than equity.

Debt-to-Equity (D/E) Ratio

Debt-to-equity ratio compares debt financing with shareholder equity to assess leverage and capital-structure risk.

DTI Ratio

Borrower affordability ratio comparing debt obligations with income, widely used in consumer and mortgage underwriting.

Debtor

A debtor is a person, company, or government that owes money or another enforceable obligation to a creditor.

Debtor in Possession (DIP)

A debtor in possession keeps control of assets and operations during Chapter 11 while owing duties to creditors and the bankruptcy estate.

Debtor vs. Creditor

Debtors and creditors sit on opposite sides of a credit relationship, with one owing payment and the other holding the claim.

Debtor’s Examination

A debtor's examination is a post-judgment process used to identify assets, income, and other information relevant to debt collection.

Debtors' Account

A debtors' account records amounts owed to a business by customers and supports receivables monitoring, collections, and working-capital analysis.

Deed of Arrangement

A Deed of Arrangement is a legally binding agreement between a debtor and his or her creditors to resolve outstanding debts without resorting to bankruptcy.

Default

Default is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Default Rate

Portfolio metric measuring the share of loans that have entered default under the lender's or reporting framework's definition.

Defaulted Interest

Defaulted Interest is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Defeasance

Defeasance is a financial concept and technique that originated in the 1980s.

Deferment

Deferment temporarily postpones loan payments under approved conditions, with interest treatment depending on the loan type and program.

Deferred Interest

Deferred interest postpones interest charges or payment recognition until a later date, often with conditions or retroactive charges.

Deferred Interest Loans

Deferred interest loans delay interest payments or charges for a period, changing cash flow and potential repayment cost.

Deleverage

Deleverage refers to the process of reducing debt levels by any entity, from corporations to governments and individuals, to improve financial health and stability.

Delinquency

Past-due status on a debt obligation before or short of formal default, commonly tracked by missed-payment timing such as 30, 60, or 90 days late.

Delinquency Rate

Portfolio metric measuring the share of loans that are past due but not necessarily yet charged off.

Delinquent

Delinquent is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Delinquent Credit Card Account

Delinquent Credit Card Account is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Delinquent Debt

Delinquent Debt is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Demand Loan

A demand loan is a type of loan that is payable on request by the creditor rather than on a specific date, offering flexibility to both lenders and borrowers.

Direct Loan

A direct loan is lending made directly by the lender to the borrower without an intermediary funding the credit.

Discharge in Bankruptcy

Discharge in bankruptcy releases a debtor from personal liability for eligible debts after the required bankruptcy process is completed.

Discharge of Indebtedness

Discharge of indebtedness formally cancels or releases a borrower from a debt obligation under settlement, bankruptcy, or other legal terms.

Discharged Bankrupt

A discharged bankrupt has completed the bankruptcy discharge process and is released from many pre-bankruptcy debts, subject to exceptions.

Discounted Loan

A discounted loan is a financial instrument offered or traded for less than its face value. This entry covers its types, applications, and examples.

Distressed Debt

Distressed debt is debt of a borrower facing default, restructuring, bankruptcy, or severe market concern about repayment.

Distressed Securities

Distressed securities are debt or equity instruments issued by borrowers under severe financial stress, default risk, or restructuring pressure.

Drawn Amount

Drawn amount is the portion of a credit facility, commitment, or line of credit that the borrower has already used.

Early Repayment Tax Clause

An early repayment tax clause lets or requires a borrower to repay when tax changes materially alter loan economics.

Effective Debt

Effective debt measures economic leverage after including debt-like obligations such as capitalized leases or off-balance-sheet commitments.

Enterprise Finance Guarantee

An enterprise finance guarantee is a government-backed guarantee that helps eligible businesses access lender financing.

Equal Credit Opportunity Act

The Equal Credit Opportunity Act prohibits discrimination in credit transactions based on protected borrower characteristics.

Equal-Principal Loans

Equal-principal loans repay the same amount of principal each period, causing interest charges and total payments to decline over time.

Equipment Leasing

Equipment leasing finances business use of machinery, vehicles, technology, or other equipment through scheduled lease payments.

Esoteric Debt

Esoteric debt refers to complex financial instruments that have intricately structured features and pricing mechanisms, understood by a limited number of market participants.

Evergreen Loans

Evergreen loans renew or remain available over time, giving borrowers continuing access subject to lender review and conditions.

Exemption Laws

Exemption Laws is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Expected Loss

Credit-risk measure estimating the average loss a lender expects after combining default probability, exposure, and loss severity.

External Funds

External funds are capital raised from outside a company, including bank borrowing, bonds, equity issuance, and other third-party financing.

Facility

A facility is a committed or arranged source of financing, credit, or borrowing capacity made available under agreed terms.

Factoring

Factoring sells or finances accounts receivable to convert invoices into earlier cash and transfer or manage collection risk.

Fair Credit Billing Act (FCBA)

The Fair Credit Billing Act (FCBA) is a federal law established in 1974 aimed at protecting consumers from unfair billing practices.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is a federal law that allows individuals to access and correct their credit records at credit reporting bureaus.

Farm Credit

Farm credit is financing provided to farmers, ranchers, cooperatives, and rural borrowers for agricultural operations and investment.

Federal Direct Loan Program

The Federal Direct Loan Program provides U.S. federal student loans directly from the government to eligible students and parents.

Federal Intermediate Credit Bank

A Federal Intermediate Credit Bank was a Farm Credit System lender that provided funding support for agricultural credit institutions.

Federal Loan

A federal loan is government-backed or government-originated financing that must usually be repaid with interest under program rules.

FICO Score

A FICO score is a widely used consumer credit score that estimates repayment risk from credit-report information.

Financial Aid

Financial aid helps students pay education costs through grants, scholarships, loans, work-study, or other funding sources.

Financial Covenants

Financial covenants are loan-agreement tests, such as leverage or coverage ratios, that monitor borrower risk and lender protections.

Financial Distress

Financial distress occurs when a borrower struggles to meet obligations, raising the risk of default, restructuring, or insolvency.

Financial Facility

A financial facility is an arranged source of funding, credit, or liquidity that a borrower can use under agreed terms and limits.

Floating Charge

A floating charge is a security interest over changing assets that crystallizes under specified events.

Floating-Rate Loan

A floating-rate loan resets its interest rate against a benchmark, causing borrower interest cost to move with market rates.

Floor Loan

A floor loan sets the minimum amount a lender will advance, commonly in staged financing or construction-lending contexts.

Forbearance

Forbearance refers to the leniency or temporary postponement given by a lender to a borrower who is facing difficulties in meeting their repayment obligations.

Forfaiting

Forfaiting is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Form 1099-C

Form 1099-C reports canceled debt that may create taxable income for a borrower unless an exclusion applies.

Fraudulent Transfer

Fraudulent transfer refers to the intentional transfer of assets to evade creditors, often seen in bankruptcy and asset protection cases.

Front-End Fee

A front-end fee is an upfront loan charge paid at origination or closing, affecting proceeds received and total borrowing cost.

Front-Loaded Interest

Front-loaded interest means early loan payments carry a larger interest share, slowing principal reduction at the start of repayment.

Full Amortization Term

The Full Amortization Term refers to the complete duration over which a loan is amortized, such that by the end of this period, the loan balance is fully paid off.

Fully Amortized Loan

A fully amortized loan is repaid through scheduled payments that reduce principal to zero by the final maturity date.

Fully Amortizing Loan

A fully amortizing loan uses periodic payments that cover interest and principal so no balance remains at maturity.

Gap Financing

Gap Financing refers to a short-term loan used to cover an immediate funding requirement until long-term financing is secured.

Garnishee

A garnishee is an entity or individual who, upon receiving a legal notice, is required to hold assets that belong to another person until the conclusion of legal proceedings.

Garnishee Order

Garnishee Order is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Good Credit

Good credit indicates a borrower is viewed as reliable and likely to repay, often improving access to credit and pricing.

Government Loan Schemes

Government loan schemes provide public-sector credit support, guarantees, subsidies, or direct loans for targeted borrowers or policy goals.

Grace and Notice Provision

A grace and notice provision gives a borrower time or formal warning before a missed obligation becomes a default.

Grace Period

A grace period is extra time after a due date or triggering event before penalties, default, or required repayment begins.

Greenlining

Greenlining refers to initiatives aimed at increasing access to financial services, such as lending and investments, in historically underserved communities.

Guarantee

A guarantee is a promise by one party to answer for another party's debt, default, or performance failure.

Guaranteed Loan

A guaranteed loan is backed by a third-party promise to repay or cover losses if the borrower defaults.

Guarantor

A guarantor is a person or entity that promises to repay or perform if the primary obligor fails.

Haircut

A haircut is a discount applied to collateral value to protect against market, liquidity, or credit risk.

Hard Inquiry

A hard inquiry is a credit-report access tied to a credit application and may affect consumer credit scores.

Hard Loan

A hard loan is short-term, collateral-focused credit that often carries higher rates because borrower or deal risk is elevated.

High Credit

High Credit refers to the maximum amount of loans or trade credit recorded for a customer or company, providing a clear indication of their creditworthiness.

Hypothecation

Hypothecation pledges assets as collateral while the borrower retains possession or use of the asset.

Impaired Credit

Impaired credit reflects damaged borrower credit quality from missed payments, defaults, high leverage, insolvency, or other negative credit events.

Impaired Loan

An impaired loan is a loan for which the lender no longer expects to collect all contractual principal and interest as scheduled.

Impaired Loan vs. Bad Loan

Impaired loan and bad loan both signal credit weakness, but they differ in accounting treatment, collectability assessment, and lender classification.

Impaired Loan vs. Defaulted Loan

Impaired loan and defaulted loan compare expected collectability with actual borrower failure to meet contractual loan obligations.

Income-Driven Repayment Plan

An income-driven repayment plan adjusts student loan payments using borrower income, family size, and program rules.

Incremental Borrowing Rate

Incremental borrowing rate is the rate a borrower would pay for similar secured borrowing over a comparable term.

Indexed Loan

An indexed loan adjusts its rate, payment, term, or principal according to a specified benchmark or index in the contract.

Indirect Loan

An indirect loan is originated or arranged through an intermediary, dealer, or third party rather than directly between borrower and lender.

Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is a formal agreement between a debtor and creditors to pay off debts under manageable terms.

Insolvency

Insolvency is a financial condition where an individual or company is unable to pay their debts when they fall due.

Insolvency Administration Order

An insolvency administration order places an insolvent estate or entity under formal administration for creditor protection and orderly resolution.

Installment Credit

Installment Credit involves borrowing a specific amount of money to be paid back over time through regular, scheduled payments including interest.

Installment Debt

Installment debt is borrowing repaid through scheduled payments over time, often with principal and interest components.

Installment Loan

An Installment Loan is a type of loan repaid over a period of time with a set number of scheduled payments, typically used for large purchases or debt consolidation.

Installment Payment

An Installment Payment refers to a series of regular, fixed payments made over a specified period of time.

Interest

Interest is the cost of borrowing money or the return for lending capital, usually stated as a rate over time.

Floor

An interest rate floor sets the minimum rate for a loan or floating-rate instrument, protecting lenders or investors when benchmarks fall.

Interest-Only Loan

Loan structure where scheduled payments cover interest for a period while principal repayment is deferred to later amortization or maturity.

Inventory Loan

An inventory loan is secured by goods held for sale, helping businesses finance stock purchases or seasonal inventory needs.

Invoice Discounting

Invoice discounting is a financial strategy wherein businesses sell their invoices to a factoring company at a discounted rate to receive immediate cash.

Invoice Financing

Invoice financing lets a business borrow against unpaid customer invoices to convert receivables into near-term cash.

Involuntary Bankruptcy

Involuntary bankruptcy is a legal process in which creditors petition the bankruptcy court to declare a debtor bankrupt.

IOU

An IOU is an informal written acknowledgment of debt that identifies the amount owed and may include simple repayment terms.

Joint and Several Liability

Joint and several liability lets a creditor pursue any liable party for the full obligation, not just that party's share.

Joint Credit

Joint credit is credit extended to two or more borrowers who share responsibility for repayment under the credit agreement.

Joint Liability

Joint Liability refers to the legal obligation where more than one party is responsible for repaying a loan or where multiple defendants can be sued together in a legal action.

Joint Liability in Corporate Debt

Joint liability makes more than one borrower or obligor responsible for repayment, strengthening creditor protection and changing borrower risk sharing.

Judgment Creditor

Judgment Creditor is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Judgment Debt

Judgment Debt is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Judgment Debtor

Judgment Debtor is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Judgment Proof

Judgment Proof refers to individuals who are legally shielded from creditor collection efforts due to insolvency or specific legal protections.

Judgmental Credit Analysis

Judgmental credit analysis relies on lender expertise and qualitative assessment rather than only automated scoring or formulas.

Keep and Pay

Keep and pay describes a bankruptcy arrangement where a debtor keeps collateral while continuing required payments.

Late Fee

A late fee is a charge assessed when a borrower or account holder misses a required payment deadline.

Lead Arranger

The financial institution responsible for organizing and managing a syndicated loan. The primary bank organizing the loan syndication and coordinating among lenders.

Lead Bank

A lead bank coordinates a syndicated loan, underwriting group, or financing process and often manages lender communication and execution.

Lease Financing

Lease financing uses recurring lease payments to fund access to equipment, vehicles, property, or other productive assets without immediate ownership.

Lease vs. Finance

Lease-versus-finance analysis compares asset use, ownership, cash flow, tax treatment, and residual-value risk.

Leasing

Leasing is a financing arrangement that lets a lessee use an asset through periodic payments instead of purchasing it outright.

Leasing Arrangements

Leasing arrangements define how asset use, payments, maintenance, renewal rights, and residual-value risk are allocated between lessee and lessor.

Legal Rate of Interest

The legal rate of interest is the maximum or default rate allowed by law, often used in usury limits, judgments, and loan agreements.

Lender

A lender provides money or credit to a borrower with an expectation of repayment, usually with interest or fees.

Lender Liability

Lender liability is legal risk that a lender may face for improper conduct, breached commitments, or abusive loan practices.

Lenders

Lenders are banks, credit unions, finance companies, investors, or other parties that provide credit and evaluate borrower repayment risk.

Level Debt Service

Level debt service is a financial provision commonly stipulated in municipal charters, ensuring that payments on municipal debt remain approximately equal each year.

Leveraged Finance

Leveraged finance refers to the strategic use of borrowed funds to amplify the potential returns from an investment.

Leveraged Lease

A leveraged lease combines lessor equity with lender debt so high-value assets can be financed through long-term lease payments.

Leveraged Loan

A leveraged loan is credit extended to a borrower with elevated leverage or credit risk, often priced with wider spreads and lender protections.

Leveraged Loan Index (LLI)

A leveraged loan index tracks syndicated leveraged loan market performance, pricing, spreads, and investor return behavior.

Liar Loan

A liar loan relies on limited or overstated borrower documentation, creating elevated underwriting and default risk.

Liquidate

To liquidate debt is to determine, settle, or extinguish the amount owed, often through payment, sale of assets, or legal resolution.

Liquidated Debt

Liquidated debt is debt whose existence and amount are fixed, determined, or not genuinely disputed.

Liquidation

Liquidation converts assets into cash to repay creditors, settle obligations, or wind down a business or position.

Liquidity Crisis

A liquidity crisis occurs when a borrower or market cannot access enough cash or funding to meet near-term obligations.

Loan

A loan is a credit arrangement where a borrower receives funds or property and agrees to repay under stated terms.

Loan Age

Loan age measures how long a loan has been outstanding since origination, often used in credit and prepayment analysis.

Loan Agreement

A loan agreement documents principal, interest, repayment, covenants, collateral, defaults, and other enforceable lending terms.

Loan Amortization

Loan amortization is the scheduled repayment of debt through payments that allocate amounts between interest and principal reduction.

Loan Application

A loan application is the borrower submission lenders use to evaluate identity, income, collateral, credit, and requested loan terms.

Loan Application Fee

A loan application fee is a charge for processing, underwriting, or reviewing a loan request before approval or closing.

Loan Application Fraud

Loan application fraud refers to the act of providing false information or documentation to deceive lenders in order to secure loan approval.

Loan Approval Process

The loan approval process evaluates a borrower, collateral, documentation, and repayment capacity before issuing credit approval.

Loan Basics

Loan Basics and Analysis terms for credit facilities, borrower analysis, pricing, fees, amortization, repayment, loan types, and regulation.

Loan Capital

Loan capital is borrowed long-term funding used by a business as part of its capital structure rather than ownership equity.

Loan Closing

Loan Closing refers to the final process where all documents are signed, and funds are transferred, completing the loan agreement.

Loan Commitment

A loan commitment is a lender promise to provide financing under stated conditions, limits, pricing, and documentation requirements.

Loan Committee

A loan committee is an internal credit group that reviews larger, riskier, or policy-sensitive lending decisions.

Loan Covenant

A loan covenant is a contractual promise or restriction designed to protect lender risk during the life of a loan.

Loan Credit Default Swap (LCDS)

A loan credit default swap transfers credit risk on a loan or loan index, letting investors hedge or trade loan-market default exposure.

Loan Fraud

Loan Fraud involves intentionally providing false information on a loan application to better qualify for a loan. This act may lead to civil liability or criminal penalties.

Loan Grading

Loan grading classifies loans by credit quality, repayment risk, collateral strength, and expected loss.

Loan Guarantee

A Loan Guarantee provides a security mechanism where a third party commits to repaying a loan if the borrower defaults, thereby mitigating risks for lenders.

Loan Life Coverage Ratio (LLCR)

The loan life coverage ratio compares project cash flow available during the loan life with outstanding debt service requirements.

Loan Loss Provision

Loan Loss Provision is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Loan Management vs. Loan Servicing

Loan management covers the broader credit lifecycle, while loan servicing focuses on post-origination administration and borrower payments.

Loan Note

A loan note is a debt instrument or promissory document that records repayment terms, interest, maturity, and borrower obligations.

Loan Officer

A loan officer works with borrowers and lenders to originate, evaluate, structure, or manage loan requests.

Loan Origination

Loan origination is the process of creating a new loan from application through underwriting, approval, documentation, and funding.

Loan Origination Fee

A loan origination fee is an upfront charge for processing, underwriting, or funding a new loan, often included in APR calculations.

Loan Package

A loan package is the assembled documentation lenders use to review, approve, close, or sell a loan.

Loan Participation Note (LPN)

A loan participation note gives investors economic exposure to a loan while the originating lender or arranger remains central to the structure.

Loan Portfolio

A loan portfolio is a lender's collection of outstanding loans, analyzed by credit quality, concentration, maturity, collateral, and repayment performance.

Loan Principal

Loan principal is the amount borrowed or still owed before interest, fees, and other charges are added.

Loan Production Office (LPO)

A loan production office sources and processes loan business for a financial institution without usually taking deposits.

Loan Servicing

Ongoing administration of a loan after origination, including payment processing, record maintenance, borrower communication, and delinquency handling.

Loan Servicing Fee

Fee or servicing spread earned for administering a loan after origination, especially for payment processing, records, escrow handling, and delinquency management.

Loan Shark

A loan shark is an unlicensed or abusive lender that charges excessive rates or uses coercive collection practices.

Loan Sharking

Loan sharking involves lending money at interest rates significantly higher than those allowed by law (usury).

Loan Stock

Loan stock is a long-term debt security that represents issuer borrowing and normally ranks as debt rather than ordinary equity.

Loan Syndication

Loan syndication lets multiple lenders share a large credit facility, spreading exposure while giving the borrower one coordinated financing package.

Loan Term

Loan term is the contractual period over which a borrower must repay principal, interest, and required fees.

Loan Underwriting

Loan underwriting is the meticulous process used by financial institutions to evaluate the risk associated with extending credit to a borrower.

Loan Value

Loan value is the economic or accounting value of a loan based on principal, expected cash flows, risk, and market conditions.

Loan vs. Credit

Loans usually provide a set borrowed amount, while credit gives access to borrowing capacity that may be used as needed.

Loan vs. Line of Credit

A loan provides borrowed funds under a defined repayment structure, while a line of credit gives flexible access up to a limit.

Loan-Loss Reserve

Loan-Loss Reserve is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Loans and Advances

Loans and advances are credit arrangements that provide funds upfront and require repayment under agreed terms.

London Approach

The London Approach is a creditor coordination framework for consensual corporate workouts during borrower financial distress.

Long-term Loan

A long-term loan has an extended repayment period, often used for major assets, expansion, mortgages, or durable financing needs.

Loss Given Default

Credit-risk metric measuring the share of exposure expected to be lost if a borrower defaults, after considering recoveries.

Low-Interest Loans

Low-interest loans charge below-market or subsidized rates, often to improve affordability for eligible borrowers or policy programs.

Margin Interest

Margin interest is the financing cost charged on money borrowed from a broker in a margin account.

Margin Loan

A margin loan is broker credit secured by securities in a margin account and used to finance investment exposure.

Margin Loan Availability

Margin loan availability is the broker-calculated borrowing capacity remaining after current collateral, loans, and margin requirements.

Marker Rate

A marker rate is the base rate in a variable-rate loan agreement before the contractual spread is added.

Maximum Loan Amount

Maximum loan amount is the largest loan a lender will approve based on collateral, income, credit risk, and program limits.

Means Test

A means test compares debtor income and expenses to statutory thresholds to determine bankruptcy eligibility or repayment capacity.

Mercantile Agency

A mercantile agency gathers business credit and payment information to support trade credit, supplier, and lending decisions.

Mercantile Agency Services

Mercantile agency services collect and report business credit information used by lenders, suppliers, and insurers to assess trade risk.

Mezzanine Finance

Mezzanine finance sits between senior debt and equity, often combining subordinated lending with warrants, conversion rights, or equity-like returns.

Microcredit

Microcredit is small-scale lending to individuals or small businesses that lack conventional collateral or bank access.

Microfinance

Microfinance provides small loans and financial services to borrowers who often lack access to traditional banking.

Microfinancing

Microfinancing involves providing small loans to individuals who do not have access to conventional banking services.

Microloan

A microloan is a small loan used by entrepreneurs, small businesses, or underserved borrowers with limited access to conventional credit.

Microloan Program

A microloan program provides small loans to startups, small businesses, or underserved borrowers that may not qualify for conventional credit.

Minimum Monthly Payment

Minimum Monthly Payment is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Money Factor

Money factor is a lease-finance rate used to calculate rent charges and can be converted to an approximate APR.

Mortgage Discrimination

Mortgage discrimination occurs when borrowers receive unfair treatment in home lending because of protected characteristics or location.

Negative Amortization

Negative amortization occurs when payments do not cover accrued interest, causing unpaid interest to increase the loan balance.

Negative Equity

Condition in which debt secured by an asset exceeds the asset's market value, commonly seen in underwater mortgages and upside-down auto loans.

Negative Pledge

A negative pledge restricts a borrower from granting liens or security interests that could weaken existing creditors' position.

Negotiable Instrument Facility

A negotiable instrument facility supports short-term note issuance by backing the borrower with bank commitments or credit support.

Net Charge-Off

Realized credit-loss amount equal to gross charge-offs minus recoveries on previously charged-off debt.

Net Rate

Net rate measures interest as a percentage of actual loan proceeds received, highlighting how discounts or fees change borrowing cost.

New Money

New Money refers to additional long-term financing provided to a company or government through new issues or issues exceeding the amount of a maturing issue or refunded issues.

New Money vs. Equity Financing

New money financing brings additional debt or cash into a transaction, while equity financing raises capital by selling ownership.

NINJA Loan

A NINJA loan is a high-risk loan made with little or no verification of borrower income, job, or assets.

Nominal Loan Rate

A nominal loan rate is the stated interest rate before adjusting for fees, compounding, inflation, or the borrower's effective cost.

Non-Amortizing Loan

A non-amortizing loan does not repay principal through regular scheduled amortization, usually leaving a lump-sum balance due later.

Non-Conforming Loan

A non-conforming loan does not meet standard agency, lender, or underwriting criteria, often affecting pricing and marketability.

Non-Marketable Debt

Non-marketable debt cannot be freely traded in secondary markets, making liquidity, valuation, and transferability more limited.

Non-Performing Debt

Non-performing debt is debt on which required payments are overdue or collection is doubtful under lender or regulatory standards.

Non-Performing Loan (NPL)

A non-performing loan is a loan on which the borrower has stopped making required payments or is unlikely to pay as agreed.

Non-Purpose Loan

A non-purpose loan is credit backed by securities when the proceeds are not used to buy, carry, or trade securities.

Non-Ratio Covenant

A non-ratio covenant is a loan agreement promise or restriction that is not expressed as a financial ratio test.

Non-Recourse Loan

A non-recourse loan limits lender recovery primarily to the pledged collateral if the borrower defaults.

Non-Revolving Bank Facility

A non-revolving bank facility provides credit that cannot be redrawn after repayment, making it closer to a term loan than a revolving line.

Nonaccrual Loan

A nonaccrual loan stops recognizing interest income because full collection of principal or interest is doubtful.

Nonperforming Asset

Nonperforming Asset is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Nonperforming Loan (NPL)

Nonperforming Loan (NPL) is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Note and Note Payable

A note or note payable is a written promise to repay a specified amount under stated maturity, interest, and payment terms.

Note Issuance Facility

A note issuance facility lets a borrower issue short-term notes over time, usually with banks providing underwriting or backup liquidity.

Obligation

An obligation is a legal or financial commitment to pay, perform, or deliver value under a contract, debt instrument, or other enforceable arrangement.

Open-End Credit

Open-end credit lets borrowers draw, repay, and borrow again up to a credit limit rather than receiving one fixed loan amount.

Original Creditor

Original Creditor is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Origination Date

Origination date is the date a loan is created or funded, often used for interest, maturity, and disclosure timing.

Outstanding Balance

Outstanding balance is the unpaid amount still owed on a loan, credit card, receivable, or other credit account.

Overdraft Fee

An overdraft fee is charged when an account transaction exceeds available funds and the bank covers or attempts the payment.

Overnight Loan

An overnight loan is short-term funding usually borrowed and repaid by the next business day for liquidity management.

Parallel Loan

A parallel loan uses offsetting loans in different currencies or jurisdictions to manage funding, currency, or transfer restrictions.

Pari Passu Clause

A pari passu clause states that specified obligations rank equally with other obligations of the same class.

Participation Loan

A participation loan lets multiple lenders share exposure to one credit, often with a lead lender servicing the borrower relationship.

Past Due

Past Due is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Past Due Loan Payments

Past due loan payments are missed scheduled payments that can trigger late fees, delinquency reporting, default rights, or collection activity.

Past-Due Loan

A past-due loan has missed one or more required payments, increasing delinquency risk and potential collection action.

Payday Loan

A payday loan is short-term consumer credit typically repaid from the borrower's next paycheck and often priced at high fees.

Payment

Payment is the transfer of money or value to satisfy a debt, obligation, purchase, claim, or contractual amount due.

Payment Bond

A payment bond is a type of surety bond that guarantees subcontractors and suppliers are paid for their work and materials.

Peer-to-Peer Lending

Peer-to-peer lending matches borrowers with individual or marketplace investors outside a traditional bank loan channel.

Performing Assets

Performing assets are loans or advances that are being repaid according to agreed terms.

Personal Guarantee

A personal guarantee makes an individual personally liable for a business, borrower, or entity's obligation.

Personal Line of Credit

A personal line of credit is an unsecured revolving credit arrangement with generally higher interest rates due to the lack of collateral.

Personal Loan

A personal loan is consumer credit borrowed for individual use and repaid under agreed interest, term, and installment terms.

Piggybacking (Credit Score)

Piggybacking adds a person to another account's credit history, often as an authorized user, to affect credit profile reporting.

Pledge

A pledge is the transfer or commitment of property as security for a debt or obligation.

Precomputed Interest

Precomputed interest refers to the total interest calculated at the beginning of a loan and included in the scheduled payments.

Predatory Lending

Predatory lending uses unfair, deceptive, or abusive credit practices that exploit borrower vulnerability or information gaps.

Preference

A debtor might prioritize paying off a particular creditor before others when they realize they are insolvent.

Preferential Creditor

A preferential creditor has priority over ordinary unsecured creditors in insolvency or winding-up distributions.

Prefinancing

Prefinancing provides funding before expected permanent financing, bond proceeds, grants, or project cash flows are available.

Prepackaged Bankruptcy

Prepackaged bankruptcy, often referred to simply as "prepack," is a type of bankruptcy procedure under Chapter 11 of the U.S.

Prepayment Clause

A prepayment clause sets the rules, limits, or penalties that apply when a borrower repays debt before maturity.

Prepayment Penalty

Fee some lenders charge when a borrower pays off or refinances a loan early and cuts off expected interest income.

Prepayment Privilege

Prepayment privilege refers to the borrower's right to repay a portion or the entirety of their loan before its scheduled maturity date without incurring penalties.

Prepayment Risk

Prepayment risk is the risk that borrowers repay debt earlier than expected, reducing interest income or reinvestment yield.

Prime Loans

Prime loans are loans extended to borrowers who have exceptional credit histories, characterized by lower interest rates and more favorable terms.

Prime Rate

Bank lending benchmark applied to many floating-rate consumer and business loans for strong borrowers.

Principal

Principal refers to the sum on which interest is paid in finance and to a person who gives authority to another to act as an agent in agency relationships.

Principal Amount

The principal amount (also known as the face value) of an obligation refers to the original sum of money that is borrowed or invested, which must be repaid at maturity.

Principal Balance

Principal balance is the outstanding amount of loan principal still owed before future interest and fees.

Principal Forbearance

Principal forbearance temporarily postpones repayment of part of a loan's principal balance without necessarily forgiving it.

Principal vs. Interest

Principal is the amount borrowed or owed, while interest is the cost charged for using that borrowed money.

Priority

"Priority" is a multifaceted term that encompasses preferential treatment or the order of claims in various contexts, particularly in legal and financial scenarios.

Private Loans

Private loans are non-government loans from banks, credit unions, online lenders, or other private lenders under their own underwriting terms.

Probability of Default (PD)

Probability of default estimates the likelihood that a borrower will fail to meet debt obligations over a stated time horizon.

Project Financing

Project financing funds a specific asset or project primarily from its own cash flows, contracts, collateral, and risk allocation.

Purchase APR

Purchase APR is the credit card interest rate applied to purchases that carry past the grace period or billing cycle.

Qualified Endorsement

A qualified endorsement is a type of endorsement on negotiable instruments designed to limit the endorser's liability.

Quasi-Loan

A quasi-loan is an arrangement where one party meets another party's obligation with an expectation of later reimbursement.

Quick-Rinse Bankruptcy

A quick-rinse bankruptcy is a rapid bankruptcy strategy used to resolve debt problems or asset transfers under accelerated court procedures.

Rating Agency

A rating agency assesses credit risk, financial strength, or securities quality and publishes ratings or research.

Ratio Covenant

A ratio covenant requires a borrower to maintain, meet, or avoid specified financial ratios under a loan agreement.

Readjustment

Readjustment involves the voluntary restructuring of a corporation's debt and capital structure by its stockholders, often necessitated by financial difficulties.

Reaffirmation Agreement

A reaffirmation agreement makes a debtor remain personally liable for a debt that might otherwise be discharged in bankruptcy.

Recasting a Debt

Recasting a debt is the process of modifying the terms of an existing loan to alleviate the borrower's financial burden, often initiated under the imminent threat of default.

Receivables Financing

Receivables financing involves using trade receivables as collateral to secure short-term financing, helping businesses manage cash flow and capital needs.

Receivership

Receivership is the process by which a lender appoints a receiver to manage and realize assets of a defaulting borrower in order to repay outstanding debts.

Recontracting

One common mathematical approach involves calculating the Net Present Value (NPV) of new debt terms.

Recourse Loan

Loan structure that lets the lender pursue the borrower beyond the collateral if sale proceeds do not fully repay the debt.

Recovery Rate

Percentage of a defaulted exposure that is ultimately recovered through collections, collateral proceeds, restructuring, or other workout actions.

Redlining

Redlining is the denial or restriction of credit and financial services to areas or groups based on discriminatory criteria.

Refinancing

Refinancing replaces existing debt with new borrowing to change rate, maturity, payment structure, collateral, or lender terms.

Refunding

Refunding replaces existing debt with new debt, often to lower interest cost, extend maturity, or change covenants.

Releveraging

Releveraging refers to the financial strategy of increasing the level of debt in a company's capital structure to potentially enhance returns on equity.

Reorganization

Reorganization entails the restructuring of an entity's finances and operations, often to overcome financial distress, as seen in Chapter 11 bankruptcy.

Reorganization Plan

A reorganization plan is a strategic proposal by a debtor in bankruptcy to restructure its operations and outline a plan for repaying creditors.

Repayment Plans

Repayment plans define different schedules and terms under which a borrower repays the loan, impacting the interest paid and the length of the loan term.

Repayment Term

The repayment term refers to the period over which a loan is to be repaid.

Representation and Warranty

A representation and warranty is a contractual statement of fact that supports lender diligence, risk allocation, and remedies if untrue.

Repudiation in Finance

Repudiation in finance occurs when a borrower or issuer refuses to honor a debt obligation or contractual payment commitment.

Reschedule Debt

To reschedule debt is to change the timing of required payments, often by extending maturity or revising installment dates.

Restructured Loan

A restructured loan has modified terms because the borrower is financially distressed or unable to meet the original agreement.

Retail Credit

Retail credit is credit issued by a retailer to customers for the payment of purchases. This can be done through third-party credit cards or in-house store cards.

Retail Credit Bureau

A retail credit bureau focuses on consumer or merchant credit information relevant to retail lending, store credit, or trade accounts.

Revolver vs. Term Loan

Revolver vs. term loan compares reusable credit capacity with a fixed borrowing amount repaid over a defined schedule.

Revolving Bank Facility

A revolving bank facility lets a borrower draw, repay, and redraw bank credit within a committed limit during the facility term.

Revolving Charge Account

A Revolving Charge Account is a credit account that allows for continuous borrowing up to a credit limit, without requiring the balance to be paid in full each month.

Revolving Credit

Revolving credit allows repeated borrowing and repayment up to a limit, making available credit refresh as balances are paid down.

Revolving Credit Facility

A revolving credit facility gives committed borrowing capacity that can be reused as amounts are repaid during the agreement period.

Revolving Line of Credit

A revolving line of credit allows repeated borrowing up to a limit as balances are drawn down and repaid.

Revolving Loan

A revolving loan can be borrowed, repaid, and borrowed again within an agreed credit limit and maturity.

Revolving Loan Facility

A revolving loan facility is a committed loan arrangement that lets the borrower reuse available capacity after repayments.

Rewards Card

A Rewards Card is a type of credit card that offers points, cash back, or other incentives for purchases, providing tangible benefits to cardholders for their spending.

Rewards Points

Rewards Points are a form of loyalty currency that consumers earn through spending on specific credit card programs.

Rewards Program

Rewards Program is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Roll-Over of Loans

Roll-over of loans extends or renews borrowing at maturity instead of requiring full repayment at the original due date.

Rollover

A rollover moves or renews a debt, investment, or account balance into a new arrangement without fully ending exposure.

Rollover Loan

A rollover loan resets its interest rate at periodic intervals, commonly combining long amortization with shorter rate terms.

Rule of 78

The Rule of 78 is a precomputed interest method that front-loads interest charges on some installment loans.

Rule of 78s

The Rule of 78s is a method used to calculate the interest charged on installment loans with add-on interest. It is based on the sum of the digits from 1 to 12 for a 12-month loan.

Rural Development Loans

Rural development loans finance housing, infrastructure, businesses, or community projects in eligible rural areas.

Satisfaction of a Debt

Satisfaction of a debt occurs when a borrower fulfills an obligation and the creditor releases the claim.

SBA 504 Loan

An SBA 504 loan provides long-term financing for eligible small-business fixed assets through a certified development company structure.

504 Loan Program

The SBA 504 loan program provides long-term fixed-asset financing through a lender and CDC structure for qualifying small businesses.

Seasoned Loan

A seasoned loan is a financial instrument, such as a loan bond or mortgage, that has successfully accumulated several scheduled payments from the borrower.

Secondary Creditor

A secondary creditor is an entity, often a collection agency, that purchases debt from the original creditor.

Secured Credit Card

Secured Credit Card is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Secured Creditor

A secured creditor has a collateral-backed claim that may receive priority over unsecured creditors.

Secured Debenture

A secured debenture is debt backed by collateral or a security interest in issuer assets.

Secured Debt

Secured debt is borrowing backed by collateral that gives the lender a claim on specified assets.

Secured Liability

A secured liability is an obligation backed by collateral, lien, pledge, or other enforceable security interest.

Secured Loan

A secured loan is backed by collateral that gives the lender a claim on pledged assets if the borrower defaults.

Secured Party

A secured party refers to the lender or holder of the security interest who has a legal claim to collateral offered by a borrower to secure a loan.

Secured Transaction

A secured transaction creates a security interest in collateral to support payment or performance of an obligation.

Secured vs. Unsecured Debt

Secured debt is backed by collateral, while unsecured debt relies on the borrower's general credit and legal claim priority.

Securitization

Securitization pools loans or receivables into securities so investors can buy cash-flow exposure backed by underlying assets.

Security Agreement

A Security Agreement is a legal document used in modern loan agreements where personal property is used as collateral under the Uniform Commercial Code (UCC).

Security Interest

A security interest is a legal claim in collateral that secures repayment or performance.

Security Rating

Security Rating refers to the evaluation of credit and investment risk of a securities issue by commercial rating agencies, such as Moody's, Fitch Ratings, and Standard & Poor's.

Senior Bank Loan

A senior bank loan is debt with priority over subordinated obligations, usually secured by collateral and central to leveraged credit structures.

Senior Debt

Senior debt has higher repayment priority than subordinated or junior claims in default or liquidation.

Senior Debt vs. Junior Debt

Senior and junior debt differ in repayment priority, risk, pricing, covenant protection, and recovery prospects.

Senior Refunding

Senior refunding issues higher-priority replacement debt to retire or refinance existing obligations in a capital structure.

Set-Off

An agreement to balance one debt against another or offset a loss with a gain.

Short-term Debt Instruments

Short-term debt instruments mature within one year and are used for liquidity management, working capital, and money-market financing.

Short-term Loan

A short-term loan is debt with a brief repayment horizon, often used for working capital, liquidity gaps, or near-term obligations.

SLM Corporation

SLM Corporation, commonly referred to as Sallie Mae, is a publicly traded stock corporation that guarantees student loans and trades on the secondary market.

Small Business Administration

The Small Business Administration (SBA) provides support to entrepreneurs and small businesses in the United States through resources, loans, and expert guidance.

Small Firms Loan Guarantee

A small firms loan guarantee supports small-business borrowing by having a government or program guarantor absorb part of lender risk.

Soft Inquiry

A soft inquiry is credit-report access that does not result from a new credit application and generally does not affect scores.

Soft Inquiry vs. Hard Inquiry

Soft inquiry vs. hard inquiry compares credit-report checks that do not affect scores with application-related checks that may affect scores.

Specialized Finance

Specialized corporate funding terms for co-funding, project-specific finance, export finance, and nonstandard capital sources.

Standby Loan

A standby loan is committed backup credit that can be drawn if specified liquidity or funding needs arise.

Standby Revolving Credit

Standby revolving credit provides backup borrowing capacity that can be drawn, repaid, and redrawn when liquidity needs arise.

Standstill Agreement

A standstill agreement temporarily restricts enforcement, payments, or creditor action while parties negotiate financing or restructuring terms.

Start-Up Loan

A start-up loan provides debt financing to a new business, often when operating history, collateral, or cash flow is limited.

Stated Interest

Stated interest is the nominal rate written into a loan, note, or sales agreement before fees, compounding, or effective-rate adjustments.

Statutory Demand

A statutory demand is a formal request by a creditor to a debtor for repayment of a debt, typically specifying a three-week period for repayment or resolution.

Straight Debt

Straight Debt refers to a debt instrument with a fixed repayment schedule, fixed interest rate, and no convertibility features.

Stressed Assets

Stressed Assets is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Student Loan

A student loan finances education expenses and is repaid by the borrower under federal or private lending terms.

Subordinated Debt

Subordinated debt ranks below senior debt for repayment and recovery if the borrower defaults.

Subordination

Subordination involves the establishment of priority between claims, debts, liens, and other interests, which can significantly impact financial and legal transactions.

Subordination Agreement

A subordination agreement changes creditor priority by making one claim rank behind another.

Subprime Lending

Subprime lending refers to the practice of providing loans, particularly home loans, to borrowers who have poor credit ratings and are therefore considered higher-risk.

Subprime Loan

A subprime loan is credit extended to borrowers with weaker credit profiles, usually at higher rates or stricter terms.

Subsidized Loan

A subsidized loan is a type of loan where the lender or sometimes a third party, typically the government, pays the interest on behalf of the borrower for a designated period.

Swingline Bank Facility

A swingline bank facility gives a borrower rapid short-term advances, usually inside a larger revolving credit agreement.

Swingline Loan

A swingline loan is a short-term draw under a larger credit facility, often used for immediate working-capital or liquidity needs.

Syndicate Member

A syndicate member is a lender or financial institution that participates in a syndicated loan, underwriting group, or distribution syndicate.

Syndicated Bank Facility

A syndicated bank facility is a credit agreement funded by multiple banks, usually coordinated by a lead arranger or agent bank.

Syndicated Loan

A syndicated loan is a large credit facility provided by a group of lenders that share funding, risk, and loan administration.

Term Loan

A term loan provides a fixed amount of credit repaid over a scheduled period, often with amortization, covenants, and stated maturity.

Third-Party Debt Order

A third-party debt order directs a third party, such as a bank, to pay money owed to a debtor toward a judgment creditor.

Trade Reference

A trade reference is information from a supplier or creditor about a customer's payment behavior and commercial credit reliability.

Transferable Loan Facility

A transferable loan facility allows lenders to transfer participations or commitments, supporting secondary-market liquidity in institutional loans.

Truth in Lending Act

The Truth in Lending Act requires standardized consumer credit disclosures so borrowers can compare financing costs and terms.

UCC-1 Statement

A UCC-1 statement is a public financing statement used to perfect a lender's security interest in collateral.

Unclaimed Property

Unclaimed property refers to assets or financial obligations that remain without a claimed ownership for a prolonged duration, subject to escheatment by state authorities.

Underbanked

Underbanked describes people or households with limited access to mainstream financial services despite having some banking relationship.

Underwriter Syndicate

An underwriter syndicate is a temporary group of investment banks or dealers that shares underwriting and distribution responsibility for a securities offering.

Undischarged Bankrupt

An undischarged bankrupt remains subject to bankruptcy restrictions before the formal discharge from eligible debts is granted.

Undrawn Amount

Undrawn amount is the unused portion of a credit commitment that remains available subject to loan terms and conditions.

Unearned Interest

Unearned Interest is a credit or lending concept used in borrowing, debt markets, underwriting, or repayment-risk analysis.

Unitranche Debt

Unitranche debt combines senior and subordinated risk into one credit facility, often simplifying middle-market acquisition financing.

Unlawful Loan

An unlawful loan violates lending laws, licensing rules, rate limits, disclosure requirements, or other credit regulations.

Unliquidated Debt

Unliquidated Debt is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Unsecured Creditor

An unsecured creditor has no specific collateral claim and depends on general creditor recovery rights.

Unsecured Debenture

An unsecured debenture is debt issued without specific collateral backing the investor's claim.

Unsecured Debt

Unsecured debt is borrowing not backed by specific collateral and repaid from general borrower resources.

Unsecured Liability

An unsecured liability is an obligation without a specific pledged asset securing repayment.

Unsecured Loan

An unsecured loan is not backed by specific collateral, so repayment depends mainly on borrower creditworthiness and legal recourse.

Unsubordinated Debt

Unsubordinated debt is not contractually ranked below other debt and usually shares senior claim status.

Unsubsidized Loan

An unsubsidized loan accrues interest while the borrower is in school, deferment, or other nonpayment periods.

Upfront Pricing for Credit Cards

Upfront Pricing for Credit Cards is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Usury

Usury is lending at an illegally or excessively high interest rate under applicable credit or lending rules.

Usury Laws

Usury Laws are regulations that limit the amount of interest that can be charged on loans, designed to prevent excessively high-interest rates that exploit borrowers.

Usury Rate

A usury rate is an interest rate that exceeds the legal maximum or is treated as impermissibly excessive.

Utilization Rate

Utilization Rate is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Voluntary Bankruptcy

Voluntary bankruptcy begins when a debtor files for bankruptcy protection rather than being forced into proceedings by creditors.

Wage Garnishment

Wage Garnishment is a collections concept used to manage overdue balances, recovery activity, and borrower account risk.

Walk-Away Lease

A walk-away lease lets a lessee return the asset at lease end without residual-value purchase obligations, subject to contract conditions.

War Loan

A war loan is government borrowing raised to finance wartime spending, often through bonds sold to citizens or institutions.

Warehouse Bond

A warehouse bond protects against losses tied to warehouse obligations, storage failures, or collateral custody risks.

Warehouse Lending

Warehouse lending gives originators short-term funding to hold loans or receivables before sale, securitization, or permanent financing.

Whole Loan

A whole loan is a single undivided loan asset sold, transferred, or held outside a securitized fractional structure.

Working Capital Loan

A working capital loan finances day-to-day operating needs such as inventory, payroll, seasonal gaps, or supplier payments.

Wrongful Trading

Wrongful trading involves directors continuing to trade when insolvency is likely, potentially increasing creditor losses and director liability.

Yield Maintenance

Yield maintenance is a prepayment provision designed to compensate lenders for lost interest when a loan is paid early.

Zero Liability Policy

Zero Liability Policy is a credit-card concept used to evaluate borrowing cost, account terms, rewards, or repayment risk.

Zeta Model

Zeta Model is a credit-risk concept used to measure default exposure, loss severity, or expected lending losses.

Zombie Companies

Zombie companies generate enough cash to keep operating but not enough to materially reduce debt or fund healthy growth.

Zombie Debt

Zombie debt is old, stale, or previously resolved debt that resurfaces through collection, sale, or credit-reporting activity.

Revised on Sunday, June 21, 2026