![]() |
|
Financial Terms | |
Borrow |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: payroll, business, money, financial advisor, accounting, finance, credit, stock trading, |
Definition of BorrowBorrowTo obtain or receive money on loan with the promise or understanding that it will be repaid.
Related Terms:Borrower (Credit Insurance)A consumer who borrows money from a lender. Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be co-borrowerA co-borrower is the secondary borrower on a borrowing account. The primary borrower will receive mailed monthly statements while the co-borrower has the option to choose whether or not he/she will also receive statements. Limitation on subsidiary borrowingA bond covenant that restricts in some way a firm's ability to borrow at Additional hedgeA protection against borrower fallout risk in the mortgage pipeline. amortizationThis term has two quite different meanings. First, it may Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to ![]() Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a Bankers AcceptancesA bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque. Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. BONDA long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years. BondA long-term debt instrument in which the issuer (borrower) is BondA financial asset taking the form of a promise by a borrower to repay a specified amount (the bond's face value) on a maturity date and to make fixed periodic interest payments. Buy on marginA transaction in which an investor borrows to buy additional shares, using the shares BuydownsMortgages in which monthly payments consist of principal and interest, with portions of these ![]() BuyoutPurchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is capitalA very broad term rooted in economic theory and referring to Cash Flow Provided or Used from Financing ActivitiesCash receipts and payments involving CollateralAssets than can be repossessed if a borrower defaults. collateralA pledge of property or other assets by a customer who is borrowing from a financial institution. Financial institutions require collateral as security in the event that the customer defaults on his/her loan. Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Conventional mortgageA loan based on the credit of the borrower and on the collateral for the mortgage. Cost of DebtThe cost of debt (bonds, loans, etc.) that a company is charged for Cost of fundsInterest rate associated with borrowing money. creditOn your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit. Credit RationingRestriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans. Credit riskThe risk that an issuer of debt securities or a borrower may default on his obligations, or that the Credit TermsConditions under which credit is extended by a lender to a borrower. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. current liabilitiesCurrent means that these liabilities require payment in Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a DebtMoney borrowed. Debtborrowings from financiers. Debt capacityAbility to borrow. The amount a firm can borrow up to the point where the firm value no Debt displacementThe amount of borrowing that leasing displaces. Firms that do a lot of leasing will be Debt leverageThe amplification of the return earned on equity when an investment or firm is financed DefeasancePractice whereby the borrower sets aside cash or bonds sufficient to service the borrower's debt. Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Disability Insurance (Credit Insurance)Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Discount rateThe interest rate that the Federal Reserve charges a bank to borrow funds when a bank is Discount windowFacility provided by the Fed enabling member banks to borrow reserves against collateral Documented discount notesCommercial paper backed by normal bank lines plus a letter of credit from a Either/or facilityAn agreement permitting a bank customer to borrow either domestic dollars from the equityRefers to one of the two basic sources of capital for a business, the EurocreditsIntermediate-term loans of Eurocurrencies made by banking syndicates to corporate and Eurocurrency marketThe money market for borrowing and lending currencies that are held in the form of External financeFinance that is not generated by the firm: new borrowing or a stock issue. Fallout riskA type of mortgage pipeline risk that is generally created when the terms of the loan to be Federal Financing BankA federal institution that lends to a wide array of federal credit agencies funds it Federal funds marketThe market where banks can borrow or lend reserves, allowing banks temporarily Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or Financial IntermediaryAny institution, such as a bank, that takes deposits from savers and loans them to borrowers. Financial IntermediationThe process whereby financial intermediaries channel funds from lender/savers to borrower/spenders. financial leverageThe equity (ownership) capital of a business can serve financing activitiesOne of the three classes of cash flows reported in the Fiscal agency agreementAn alternative to a bond trust deed. Unlike the trustee, the fiscal agent acts as an Fixed-rate loanA loan on which the rate paid by the borrower is fixed for the life of the loan. Formalized Line of CreditA contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year. Forward rate agreement (FRA)Agreement to borrow or lend at a specified future date at an interest rate Free reservesExcess reserves minus member bank borrowings at the Fed. FrictionsThe "stickiness" in making transactions; the total hassle including time, effort, money, and tax Funding CostsThe price of obtaining capital, either borrowed or equity, with intent to carry on business operations. Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments Homemade leverageIdea that as long as individuals borrow (or lend) on the same terms as the firm, they can IndentureAgreement between lender and borrower which details specific terms of the bond issuance. Insured MortgageAn insured mortgage protects only the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC [Canada Mortgage and Housing Corporation] and is required if a person has a high-ratio mortgage. [A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or appraised value, whichever is less.] Insured Retirement PlanThis is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today." InterestThe price paid for borrowing money. It is expressed as a percentage rate over a period of time and InterestThe cost of money, received on investments or paid on borrowings. interestThe cost of a loan or the compensation paid for the use of money. For example, you are paid interest for deposits you make into a savings account, and you pay interest for money that you borrow from a low-cost borrowing account. Interest Rate, NominalPayment for the use of borrowed funds, measured as a percentage per year of these funds. Interest Rate RiskPossibility that interest rates will rise during the term of a loan thereby increasing the annual cost of borrowing. Investor falloutIn the mortgage pipeline, risk that occurs when the originator commits loan terms to the Lender (Credit Insurance)Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Leveraged buyoutThe purchase of one business entity by another, largely using borrowed leveraged buyout (LBO)Acquisition of the firm by a private group using substantial borrowed funds. Leveraged leaseA lease arrangement under which the lessor borrows a large proportion of the funds needed Leveraged portfolioA portfolio that includes risky assets purchased with funds borrowed. Leveraged portfolioA portfolio that includes risky assets purchased with funds borrowed. LIBORThe London Interbank Offered Rate; the rate of interest that major international banks in London Life Insurance (Credit Insurance)Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. Line of credit An informal arrangement between a bank and a customer establishing a maximum loan Line of creditAn informal arrangement between a bank and a customer establishing a maximum loan line of creditAgreement by a bank that a company may borrow at any time up to an established limit. Line of CreditAn agreement negotiated between a borrower and a lender which establishes the maximum amount against which a borrower may draw. The agreement also sets out other conditions, such as how and when money borrowed against the line of credit is to be repaid. Loan Capitalborrowed funds having a fixed interest rate. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate MarginThis allows investors to buy securities by borrowing money from a broker. The margin is the Market clearingTotal demand for loans by borrowers equals total supply of loans from lenders. The market, Money marketMoney markets are for borrowing and lending money for three years or less. The securities in Money MarketFinancial market in which funds are borrowed or lent for short periods. (The money market is distinguished from the capital market, which is the market for long term funds.) Money market hedgeThe use of borrowing and lending transactions in foreign currencies to lock in the MortgageA loan secured by the collateral of some specified real estate property which obliges the borrower MortgageDebt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan. Mortgage (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home. Mortgage pipelineThe period from the taking of applications from prospective mortgage borrowers to the Mortgage-pipeline riskThe risk associated with taking applications from prospective mortgage borrowers Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |