The sale by a borrower of some or all of the assets that form the actual or implied security for a loan, often subject to provisions restricting such disposal.
A ceiling on a charge; for example, an interest-rate cap would set a maximum interest rate to be charged on a loan, regardless of prevailing general interest-rate levels.
A committed facility is an agreement between a bank and a customer that ensures the bank will provide funds up to a specified maximum at a pre-agreed interest rate, typically for a specified period.
A Cost-of-Living Adjustment (COLA) is an increase in income that keeps up with the cost of living. It is typically used in wage contracts, pensions, social security benefits, and other financial agreements to counteract inflation.
A cross-default clause in a loan agreement that stipulates that a default on one loan can trigger defaults on other loans held by the same borrower.
A promissory note is a negotiable instrument that contains a written promise to pay a specified sum of money to a named person, their order, or the bearer at a predetermined future date. It must be unconditional, signed by the maker, and delivered to the payee or bearer.
A regulated futures contract is a financial agreement that ensures daily settlement of gains or losses through margin accounts, and it must be traded on a qualified exchange following specified rules.
A standby loan is a commitment by a lender to make available a sum of money at specified terms for a specified period. It is generally not a desirable loan and is intended to be replaced by another commitment.
An agreement to receive or participate in a service, product, or offering, typically involving periodic payments or commitments.
