BKF 1 - Bank Lending

Funding a company's operations and assets.

Funds for daily company operations.

Funds for maintaining or purchasing physical assets.

Borrowing money from lenders.

Selling shares to investors.

A contract between a lender and a borrower.

Securities issued to raise money publicly.

A promise by a borrower to either do something (positive covenant) or not do something (negative covenant) in a loan agreement.

A promise by the borrower to do something.

A promise by the borrower not to do something.

Covenants related to borrower actions, acquisitions, capital expenditures, and dividend restrictions.

Covenants requiring the borrower to provide specific information.

Covenants that test the borrower's financial performance against projections.

Forecasts of a borrower's financial performance.

A restriction on granting security interests (pledges) to others.

Potential future financial obligations like guarantees.

A test of a company's ability to meet its short-term obligations.

A revolving loan can be borrowed and repaid throughout its term. The borrower can take multiple tranches (chunks) of the loan, potentially at different times, even sometimes rolling over these tranches into subsequent repayment periods.

A formal notification from a borrower to a lender, specifying the amount and time frame for a loan drawdown. This provides the lender with concrete details of a loan draw request.

When a borrower repays a revolving loan, the funds become available for future borrowing within the facility's timeframe.

Secured loans utilize assets as collateral, while unsecured loans rely solely on the borrower's creditworthiness. Security is often sought by lenders as guarantee against risk.

Describes the procedures for borrowing, conditions required for obtaining the loan, and the repayment or early repayment of the loan.

Includes interest rates and fees associated with borrowing.

Includes the borrower's promises (representations), loan use restrictions (covenants), and scenarios that allow the lender to take action faster (events of default).

The time between signing the loan agreement and the borrower's request for the loan funds.

Lenders assess the borrower's ability to repay the loan before advancing funds.

Events that allow a lender to demand immediate loan repayment and enforce security.

The act of paying back money borrowed, often with interest.

Assets pledged by the borrower to back up a loan in case of default.

When default on one loan triggers a default on another loan held by the same borrower.

When default on one loan causes all loans to the same borrower to become immediately due.

Calculations presented that give a strong sense of a borrower's financial status.

A legal agreement that outlines specific commitments and representations between a lender and a borrower.

Breach in a facility agreement that can be fixed by the borrower within a specified period.

Legal actions taken when borrowers cannot repay their debts.

A loan agreement where the borrower pledges assets to ensure repayment.

A loan where the lender has no claim on a specific asset if the borrower defaults. This means the lender shares the available funds alongside other unsecured creditors.

A loan where the lender has a claim on a specific asset (e.g., property) if the borrower defaults. This allows the lender to sell the asset to recover the loan amount.

A type of secured loan where the borrower hands over legal title of the asset to the lender as security. The borrower retains possession of the asset.

A type of secured loan where the lender has a claim on the asset but doesn't own it. The borrower retains legal title but the lender has an equitable interest.

A type of secured loan where the borrower delivers possession of the asset to the lender as security. Typically used in trade finance (not corporate borrowing).