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Financial Terms | |
Equivalent loan |
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Definition of Equivalent loanEquivalent loanGiven the after-tax stream associated with a lease, the maximum amount of conventional
Related Terms:Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent YieldBond yield calculated on an annual percentage rate method Bridge LoanA short term loan to cover the immediate cash requirements until permanent financing is received. Broker loan rateRelated: Call money rate. ![]() Builder buydown loanA mortgage loan on newly developed property that the builder subsidizes during the Bullet loanA bank term loan that calls for no amortization. CASH AND CASH EQUIVALENTSThe balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash EquivalentsHighly liquid, fixed-income investments with original maturities of three months or less. Cash EquivalentsInstruments or investments of such high liquidity and safety that they are virtually equal to cash. Certainty equivalentAn amount that would be accepted in lieu of a chance at a possible higher, but 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. Common stock equivalentA convertible security that is traded like an equity issue because the optioned Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a Demand LoanA loan which must be repaid in full on demand. Equivalent annual annuityThe equivalent amount per year for some number of years that has a present Equivalent annual benefitThe equivalent annual annuity for the net present value of an investment project. Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Equivalent annual costThe equivalent cost per year of owning an asset over its entire life. equivalent annual costThe cost per period with the same present value as the cost of buying and operating a machine. Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax equivalent units of production (EUP)an approximation of the number of whole units of output that could have been Farm Improvement and Marketing Cooperatives Loans ActSee here Federal Home Loan BanksThe institutions that regulate and lend to savings and loan associations. The Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Fixed-rate loanA loan on which the rate paid by the borrower is fixed for the life of the loan. Fixed Rate Loanloan for a fixed period of time with a fixed interest rate for the life of the loan. Freddie Mac (Federal Home Loan Mortgage Corporation)A Congressionally chartered corporation that Intercompany loanloan made by one unit of a corporation to another unit of the same corporation. Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Jumbo loanloans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or Loan amortization scheduleThe schedule for repaying the interest and principal on a loan. Loan CapitalBorrowed funds having a fixed interest rate. Loan CovenantsExpress stipulations included in loan agreements that are designed to monitor Loan syndicationGroup of banks sharing a loan. See: syndicate. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Loans payableAmounts that have been loaned to the company and that it still owes. Multicurrency loansGive the borrower the possibility of drawing a loan in different currencies. Multifamily loansloans usually represented by conventional mortgages on multi-family rental apartments. Negative Loan Covenantsloan covenants designed to limit a corporate borrower's behavior Operating LoanA loan advanced under an operating line of credit. Parallel loanA process whereby two companies in different countries borrow each other's currency for a personal loanA lump sum that you borrow from a financial institution for a specified period of time. To repay the loan, you pay interest on the entire lump sum, and make payments on a scheduled basis. Positive Loan Covenantsloan covenants expressing minimum and maximum financial measures Project loan certificate (PLC)A primary program of Ginnie Mae for securitizing FHA-insured and coinsured Project loan securitiesSecurities backed by a variety of FHA-insured loan types - primarily multi-family Project loansUsually FHA-insured and HUD-guaranteed mortgages on multiple-family housing complexes, Savings and Loan associationNational- or state-chartered institution that accepts savings deposits and secured loan or line of creditA lump sum of funds (loan), or a revolving source of credit with a pre-established limit (line of credit), for which the customer must provide collateral. Self-liquidating loanloan to finance current assets, The sale of the current assets provides the cash to repay Term loanA bank loan, typically with a floating interest rate, for a specified amount that matures in between Term LoanA secured loan made to business concerns for a specific period (normally three to ten years). It is repaid with interest, usually with periodical payments. Transaction loanA loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving Variable rate loanloan made at an interest rate that fluctuates based on a base interest rate such as the amortizationThis term has two quite different meanings. First, it may ARMAdjustable rate mortgage. A mortgage that features predetermined adjustments of the loan interest rate Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |