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 ?
In the last ten years, the total amount of bank advances received by Punjab is 1193.55 billion, Sindh 997.49 billion and KP 22.97 billion, Balochistan 2.02 billion, Islamabad 182.16 billion and FATA 0.18 Billion.
The analysis made by study report reflects a trend of concentration of bank advances to primarily three provinces or regions of the country i.e.
President KPCCI also disclosed that in private sector, KP had a market share of 2.55 percent in bank advances to private sector in 2001 which gradually declined to 1.29 percent by 2011.
The business sector considers that bank advances are a close substitute for money transactions balances.
[RADR.sub.t] = Real rate of interest on bank advances.
Total assets at the end of the third quarter 2015 were USD1.712 billion, USD34.7 million higher (+2.1 percent) than at the end of the second quarter 2015, primarily funded by deposit growth (USD48.4 million) net of a decline in Federal Home Loan Bank advances (USD19 million).
BANKING AND CREDIT NEWS-June 9, 2014--Umpqua Bank advances "neighbourhood store" concept
Under the terms of the transaction, UFCU has acquired all loans, investments, real estate, accrued interest receivables, and other banking-related assets of GSB with an estimated value of around USD80m, and assumed all deposits, Federal Home Loan Bank advances, and accrued interest payable of around USD80m.
M2 EQUITYBITES-June 9, 2014--Umpqua Bank advances "neighbourhood store" concept
The company intends to use the gross proceeds for general corporate purposes, including the optimization of its balance sheet through the restructuring of Federal Home Loan Bank advances. Its ultimate goals are repurchasing its preferred stock and warrants issued to the US Treasury through the Troubled Asset Relief Program and exiting from the written agreement with the Federal Reserve Bank of Richmond and the Virginia Bureau of Financial Institutions.
The excess cash we are carrying at the end of the current quarter will be utilized to pay down a substantial amount of fixed rate Federal Home Loan Bank advances that mature in the fourth quarter and carry a weighted average rate of 4.94%, thus further benefiting our net interest margin.'
Also, continuation of priority sector status for bank advances to NBFCs for onward lending to farmers is critical for their business growth.