bank loan

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Bank Loan

The extension of money from a bank to another party with the agreement that the money will be repaid. Nearly all bank loans are made at interest, meaning borrowers pay a certain percentage of the principal amount to the lender as compensation for borrowing. Most loans also have a maturity date, by which time the borrower must have repaid the loan. A bank loan occasionally is called a bank advance. See also: Loan.

bank loan

or

bank advance

the advance of a specified sum of money to an individual or business (the borrower) by a COMMERCIAL BANK, SAVINGS BANK. etc. (the lender). A bank loan is a form of CREDIT which is extended for a specified period of time, usually on fixed-interest terms related to the base rate of interest, with the principal being repaid either on a regular instalment basis or in full on the appointed redemption date. Depending upon the nature of the loan and the degree of risk involved, a bank loan may be unsecured or secured, the latter requiring the borrower to deposit with the bank an approved form of COLLATERAL SECURITY (for example the property deeds to his house). In the case of businesses, bank loans are usually renegotiated shortly before expiring, thus providing the borrower with a ‘revolving’ line of credit used mainly to finance WORKING CAPITAL requirements. See OVERDRAFT, INTEREST RATE.

bank loan

the advance of a specified sum of money to an individual or business (the borrower) by a COMMERCIAL BANK, SAVINGS BANK, etc. (the lender). A bank loan is a form of CREDIT that is often extended for a specified period of time, usually on fixed-interest terms related to the base INTEREST RATE, with the principal being repaid either on a regular instalment basis or in full on the appointed redemption date. Alternatively, a bank loan may take the form of overdraft facilities under which customers can borrow as much money as they require up to a pre-arranged total limit and are charged interest on outstanding balances. In the case of business borrowers, bank loans are used to finance WORKING CAPITAL requirements and are often renegotiated shortly before expiring to provide the borrower with a ‘revolving’ line of credit.

Depending on the nature of the loan and the degree of risk involved, bank loans may be unsecured or secured, the latter requiring the borrower to deposit with the bank COLLATERAL SECURITY (e.g. title deeds to a house) to cover against default on the loan.

References in periodicals archive ?
The analysis made by study report reflects a trend of concentration of bank advances to primarily three provinces or regions of the country i.
The business sector considers that bank advances are a close substitute for money transactions balances.
The financial impact of the sale of securities and the prepayment of the Federal Home Loan Bank advances will reduce the Company's pretax income by approximately $1.
These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, products and services; changes in interest rates and the effects of, and changes in, trade, monetary and fiscal policies and laws; and achieving the expected benefits of the prepayment of the Federal Home Loan Bank advances.
Acquisition of capital assets (208) (288) (208) (288) Increase in Cash 12,057 631 Bank Advances - Beginning of Period (473) (3,586)
The net proceeds of the equity offering will be used as follows: $1 million downstreamed to ASRVB to support the prepayment of approximately $100 million of Federal Home Loan Bank advances (6% interest rate and 2010 maturity) and related interest rate swaps, $1 million capital infusion into AmeriServ Trust and Financial Services Company to support growth, and $7.
This growth in assets was primarily funded by a $54 million increase in deposits to $293 million and, a $16 million increase in Federal Home Loan Bank advances.
Another factor was a margin squeeze associated with sharp increases in short-term cost of funds, primarily from Home Loan Bank advances.
These investments were funded primarily with Federal Home Loan Bank advances.
The company also announced that in the fourth quarter, it is prepaying approximately $42 million in fixed-rate Federal Home Loan Bank advances at a cost of approximately $2.
3 million combined decrease in ESB-NC's deposits and Federal Home Loan Bank advances.
The Corporation prepaid approximately $81 million in longer-term, fixed rate Federal Home Loan Bank advances that carried a weighted average rate of 6.