Double Gearing
What is Double Gearing? Double gearing refers to the practice of borrowing money against an asset, with the money being used to buy shares of stock. Then, more money is borrowed against the shares to establish a margin loan that can be used to purchase even more shares. In short, double gearing is a form...
Credit Event
What is a Credit Event? A credit event refers to a negative change in the credit standing of a borrower that triggers a contingent payment in a credit default swap (CDS). It occurs when an individual or organization defaults on its debt and is unable to comply with the terms of the contract entered, triggering...
Lending Ratios
What are Lending Ratios? Lending ratios, or qualifying ratios, are ratios used by banks and other lending institutions in credit analysis. Financial institutions assign a credit score to borrowers after performing due diligence, which involves a comprehensive background check of the borrower and his financial history. Lending ratios are extensively used in the underwriting approval...
Business Banking
What is Business Banking? Business banking involves activities and offerings that financial institutions engage in to solve the financial challenges of businesses. The specialized suite of financial products and services is designed for companies to compete effectively and for financial institutions to grow their share of wallets. Business banking relies primarily on the business, although...
Asset-Based Loans
What are Asset-Based Loans? Asset-based loans involve something physical (an asset) that is used as collateral for a loan. For most companies, it is inventory or accounts receivable that act as the collateral. However, any asset whose value can be accurately quantified may potentially be used as collateral. Lenders who offer asset-based loans meet with...
