Technical Default
What is a Technical Default? A technical default is a violation (often called a breach) of one (or more) terms of a loan agreement between a borrower and a lender. When a lender (a creditor) extends credit to a borrower (a debtor), both parties agree to loan terms by way of a loan (or credit)...
SWOT Analysis
What is SWOT Analysis? SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a framework to help assess and understand the internal and external forces that may create opportunities or risks for an organization. Strengths and weaknesses are internal factors. They are characteristics of a business that give it a relative advantage...
Collateral
What is Collateral? Collateral is an asset pledged by a borrower, to a lender (or a creditor), as security for a loan. Borrowers generally seek credit in order to purchase things – it could be a house or a car for an individual, or it could be manufacturing equipment, commercial real estate, or even something...
Letter of Credit
What is a Letter of Credit? A Letter of Credit (LC) can be thought of as a guarantee that is backstopped by the Financial Institution that issues it. One party is required to guarantee something to another party; typically, it’s payment, but not always – it could also be guaranteeing that some project will be...
Trade Finance
What is Trade Finance? Trade Finance is a broad term with many important sub-topics – all revolving around structuring transactions to de-risk as many elements as possible for the parties involved: sellers, buyers, and the finance community. Trade finance risks include (but are not limited to) payment risk, performance risk, and currency risk. Conducting business...
