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Financial Terms | |
Operating Loan |
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Definition of Operating LoanOperating LoanA loan advanced under an operating line of credit.
Related Terms:Annual fund operating expensesFor investment companies, the management fee and "other expenses," Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a 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 flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash ![]() Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions 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. Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current degree of operating leverage (DOL)Percentage change in profits given a 1 percent change in sales. Demand LoanA loan which must be repaid in full on demand. Equivalent loanGiven the after-tax stream associated with a lease, the maximum amount of conventional Farm Improvement and Marketing Cooperatives Loans ActSee here Federal Home Loan BanksThe institutions that regulate and lend to savings and loan associations. The ![]() 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 Net operating lossesLosses that a firm can take advantage of to reduce taxes. Net operating marginThe ratio of net operating income to net sales. operating activitiesIncludes all the sales and expense activities of a business. operating budgeta budget expressed in both units and dollars Operating cash flowEarnings before depreciation minus taxes. It measures the cash generated from operating cash flowSee cash flow from operating activities. Operating Cash FlowIncome available after the payment of taxes, plus the value of the Operating cycleThe average time intervening between the acquisition of materials or services and the final Operating EarningsA term frequently used to describe earnings after the removal of the Operating expenseAny expense associated with the general, sales, and administrative OPERATING EXPENSESThe total amount that was spent to run a company this year. Operating ExpensesThe amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates. Operating exposureDegree to which exchange rate changes, in combination with price changes, will alter a Operating incomeThe net income of a business, less the impact of any financial activity, Operating IncomeA measure of results produced by the core operations of a firm. It is common Operating leaseShort-term, cancelable lease. A type of lease in which the period of contract is less than the Operating leaseThe rental of an asset from a lessor, but not under terms that would Operating LeaseOne where the risks and benefits, as well as ownership, stays with the lessor. Operating leverageFixed operating costs, so-called because they accentuate variations in profits. operating leverageA relatively small percent increase or decrease in operating leveragethe proportionate relationship between operating leverageDegree to which costs are fixed. Operating Line of CreditA bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year. Operating profitThe profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation. operating profitSee earnings before interest and income tax (EBIT). Operating profit marginThe ratio of operating margin to net sales. Operating riskThe inherent or fundamental risk of a firm, without regard to financial risk. The risk that is operating risk (business risk)Risk in firm’s operating income. 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 Short-run operating activitiesEvents and decisions concerning the short-term finance of a firm, such as 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 negative cash flowThe cash flow from the operating activities of a business Net Cash after OperationsCash flow available for debt service—the payment of interest and principal on loans. Generally calculated as cash provided by operating activities before interest Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |