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 ?
Government policy requirements will also no longer pertain to commercial bank loans and the provision rate for bad loans will be increased by 1% this year and continue to rise in following years, he said.
Also, the relative cost of bank loans, as measured by the unusually wide spread between the prime rate and banks' cost of funds, is high.
Use these sources of financing to shore you up and make you more presentable to bank loan officers.
The subscript is used to indicate that Fitch bank loan ratings are specifically designed to be useful to investors that focus on ultimate recovery, as well as default.
Despite this material change in Aladdin's management, DerivativeFitch affirms their 'CAM2-' rating based on the depth and breadth of Moroney's experience in the bank loan market.
The creditors received the bulk of the total recovered value on the defaulted bank loans within one year of the default date.
To sum up, investigating the relationship between trade credits and bank loans for such a strategic industry of Turkey is a crucial issue to keep track of their healthy financial stability.
In a memorandum opinion, the Tax Court held for the Service, ruling that E could not treat his personal guarantee of R's bank loan as a capital contribution that increased his basis in R.
The study considers the prospects for a substantial increase in competition between the bank loan and private placement markets and for a substantial change in hanks' roles as agents.
The Municipal Securities Rulemaking Board today encouraged state and local governments that issue municipal securities to make information about their bank loan financings publicly available on the MSRB's Electronic Municipal Market Access (EMMA[R]) website.
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In response, they have cut interest rates on bank loans to levels below inflation rates.