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 ?
Delayed payments to a source of loan capital, judgmental enforcements of debts and claims in the amount that exceeds 30% of company's balance cost, as well as complaints from tax authorities have a negative influence on company's credit rating.
This article will present formulas which will help us determine the share of own and loan capital relying on values determined on the basis of financial plan assumptions, without the necessity to assess the company value first.
The loan capital to Danionics Asia was recognised as DKK0 at 30 September 2011, unchanged compared to the third quarter of 2010.
He specializes in securing private loan capital and business consulting.
Palmetto, FL, May 02, 2010 --(PR.com)-- Dynamic Global Solutions, LLC (DGS) today announced the formation of Loan Capital Advisors (LCA), a division specializing in loan purchases, loan sales and secondary market advisory services.
At the state level, the Washington State Department of Commerce offers grants and loans to small and medium-sized businesses through loan capital for startup and expansion projects.
David Kyle, the CEO of ISFC, and other company officials were not available for this story but those who have dealt with the lender say school borrowers, besides meeting credit and collateral requirements on average loans of Rs 12 lakh, are required to be able to demonstrate project management skills needed to use and repay borrowed loan capital effectively.
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.
In the retail sector, the unrestricted issuing of credit cards contributed to a personal debt mountain; the mis-selling of numerous financial products had to be sorted out at great cost by the Financial Ombudsman Service; thousands of endowment mortgages failed to provide sufficient funds to pay off home loan capital; managed pension funds are worth less than they were ten years ago; and mortgage offers of 125 per cent of property values must surely lead to negative equity and house repossessions now that the property market is faltering and unemployment has risen.
Simultaneously, they pour billions in to prop up the very banks that now sit on the loan capital so desperately needed to get industry moving again.
The loan capital is provided by the state Treasury Department and the Pennsylvania Housing Finance Authority.
"We will take all measures necessary to help small businesses get the loan capital they need."