|Commercial Business Loan (Credit Insurance)
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Definition of Commercial Business Loan (Credit Insurance)
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.
A loan in which two companies in separate countries borrow each other's currency for a
Key strategies a firm intends to pursue in carrying out its business plan.
The requirement that a claim holder voting against a plan of reorganization
Related: Call money rate.
A mortgage loan on newly developed property that the builder subsidizes during the
A bank term loan that calls for no amortization.
Repetitive cycles of economic expansion and recession.
A business that has terminated with a loss to creditors.
The risk that the cash flow of an issuer will be impaired because of adverse economic
Refers to the fact that the merger of two firms decreases the probability of default on
Demand for payment.
Short-term unsecured promissory notes issued by a corporation. The maturity of
The risk that a foreign debtor will be unable to pay its debts because of business events,
A method of analysis in which a firm is compared to others that have a desired
credit granted by a firm to consumers for the purchase of goods or services. Also called
The process of analyzing information on companies and bond issues in order to estimate the
Purchase of the financial guarantee of a large insurance company to raise funds.
The length of time for which the customer is granted credit.
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the
A statistical technique wherein several financial characteristics are combined to form a single
The interest rate offered on an investment type insurance policy.
Lender of money.
Overnight, collateralized loan made to a dealer financing his position by borrowing from a
Demand line of credit
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
Given the after-tax stream associated with a lease, the maximum amount of conventional
Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and
Short-term notes with maturities up to 360 days that are issued by companies in
Revolving credit without maturity.
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
Federal Deposit Insurance Corporation (FDIC)
A federal institution that insures bank deposits.
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Five Cs of credit
Five characteristics that are used to form a judgement about a customer's creditworthiness:
A loan on which the rate paid by the borrower is fixed for the life of the loan.
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Full faith-and-credit obligations
The security pledges for larger municipal bond issuers, such as states and
Guaranteed insurance contract
A contract promising a stated nominal interest rate over some specific time
The law of averages. The average outcome for many independent trials of an experiment
loan made by one unit of a corporation to another unit of the same corporation.
A secured short-term loan to purchase inventory. The three basic forms are a blanket
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or
Letter of credit (L/C)
A form of guarantee of payment issued by a bank used to guarantee the payment of
Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan
Loan amortization schedule
The schedule for repaying the interest and principal on a loan.
Group of banks sharing a loan. See: syndicate.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan
Give the borrower the possibility of drawing a loan in different currencies.
loans usually represented by conventional mortgages on multi-family rental apartments.
A process whereby two companies in different countries borrow each other's currency for a
A strategy using a leveraged portfolio in the underlying stock to create a synthetic put
Project loan certificate (PLC)
A primary program of Ginnie Mae for securitizing FHA-insured and coinsured
Project loan securities
Securities backed by a variety of FHA-insured loan types - primarily multi-family
Usually FHA-insured and HUD-guaranteed mortgages on multiple-family housing complexes,
credit granted by a firm to consumers for the purchase of goods or services.
Revolving credit agreement
A legal commitment wherein a bank promises to lend a customer up to a
Revolving line of credit
A bank line of credit on which the customer pays a commitment fee and can take
Savings and Loan association
National- or state-chartered institution that accepts savings deposits and
loan to finance current assets, The sale of the current assets provides the cash to repay
Term life insurance
A contract that provides a death benefit but no cash build-up or investment component.
A bank loan, typically with a floating interest rate, for a specified amount that matures in between
Provides a death benefit only, no build-up of cash value.
credit granted by a firm to another firm for the purchase of goods or services.
A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
Variable rate loan
loan made at an interest rate that fluctuates based on a base interest rate such as the
Whole life insurance
A contract with both insurance and investment components: (1) It pays off a stated
Buying or selling goods or services now with the intention of payment following at some time in
Purchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a
One side of a journal entry, usually depicted as the right side.
Amounts that have been loaned to the company and that it still owes.
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
business process reengineering (BPR)
the process of combining information technology to create new and more effective
an activity that is necessary for the operation of the business but for which a customer would not want to pay
Internet business model
a model that involves
Short-term unsecured notes issued by firms.
Procedure to determine the likelihood a customer will pay its bills.
Standards set to determine the amount and nature of credit to extend to customers.
line of credit
Agreement by a bank that a company may borrow at any time up to an established limit.
operating risk (business risk)
Risk in firmâ€™s operating income.
Fluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak.
A privately owned, profit-seeking firm that accepts deposits and makes loans.
A decline in the ability or willingness of banks to lend.
Restriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans.
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
Political Business Cycle
A business cycle caused by policies undertaken to help a government be re-elected.
Real Business Cycle Theory
Belief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy.
A program in which workers and firms pay contributions and workers collect benefits if they become unemployed.
Consumer Credit Protection Act
A federal Act specifying the proportion of
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
A federal Act expanding upon many of the insurance reforms created by
Express stipulations included in loan agreements that are designed to monitor
Negative Loan Covenants
loan covenants designed to limit a corporate borrower's behavior
Positive Loan Covenants
loan covenants expressing minimum and maximum financial measures
Canadian Deposit Insurance Corporation
Better known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.
In medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced.
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