loan capital


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Related to loan capital: debenture, Share capital, Working Capital Loan

Loan Capital

Long-term capital employed from sources other than common stock or savings. That is, loan capital is what a company has borrowed or issued in preferred stock. Loan capital is distinguished by the fact that a company is required to pay coupons or dividends periodically. That is, unlike common stock, loan capital carries a fixed liability for a company. Likewise, it is usually collateralized by one or more of the company's assets.

loan capital

or

debt capital

the money employed in a company that has been borrowed from external sources for fixed periods of time by the issue of fixed-interest financial securities such as DEBENTURES. The providers of loan capital do not normally share in the profits of the company but are rewarded by means of regular INTEREST payments which must be paid under the terms of the loan contract. Interest payments are a business expense which must be charged against revenues in calculating profits. See SHARE CAPITAL, BALANCE SHEET, CAPITAL GEARING.

loan capital

or

debt capital

the money employed in a company that has been borrowed from external sources for fixed periods of time by the issue of fixed-interest financial securities. The providers of loan capital do not normally share in the profits of the company, as do providers of SHARE CAPITAL, but are rewarded by means of regular INTEREST payments that must be paid under the terms of the loan contract. Lenders take precedence over shareholders both for receipt of interest payments out of profits and the repayment of the capital sums subscribed in the event of company INSOLVENCY. Loans carry various degrees of risk if the borrower defaults on the loan. Least risky are DEBENTURES, secured by means of a ‘fixed’ charge on a specific company asset such as a particular machine which the lender could claim in the event of default. Next come debentures secured by means of a ‘floating’ charge against all company assets in the event of default. Finally, holders of‘subordinated’ loans (often referred to colloquially as ‘junk bonds’) would receive repayment of their loans only after the claims of other lenders have been met. These increasing degrees of risk are reflected in the interest rates paid to lenders, holders of unsubordinated loans generally being offered higher interest rates than debenture holders. See CAPITAL GEARING.
References in periodicals archive ?
I think, in the past, this region had relied too heavily on loan capital markets.
Loan Capital Advisors focuses on building relationships between buyers and sellers of loans.
Now, despite slight signs of life in economic growth figures for the last quarter of 2009, the country has become dependent on foreign loan capital to survive.
stand-still on any further repayments of loan capital to RBS, as announced on 8
The loan capital is provided by the state Treasury Department and the Pennsylvania Housing Finance Authority.
The letter also reminds the Chancellor that in addition to requiring finance to support day to day operations, printers also need regular injections of loan capital to support necessary investment in new equipment and technologies if they are to remain competitive and meet continuing customer price pressures.
We will take all measures necessary to help small businesses get the loan capital they need.
It has acquired 30 per cent of Toolstation's equity from its founding shareholders for pounds 5 million and will provide an initial loan of pounds 7 million to allow Toolstation to repay its outstanding early stage loan capital.
Farmland officials decided to put the money in loan capital notes.
The new owners have paid DKK 20 million in new capital as well as a loan capital of DKK 10 million, which was converted into responsible capital.
A mortgage insurance program enables private lenders to utilize their existing products and marketing networks to finance multi-family projects in emerging markets, makes it easier for investors to purchase the resulting loans and increases the flow of loan capital into areas the state chooses to target.
All our loan capital has been donated by individuals and foundations.