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...
Cross Collateralization
What is Cross Collateralization? Cross-collateralization occurs whenever a borrower pledges one asset to serve as collateral to secure multiple loans, enhancing the appeal for lenders. Although the default risk may be lower if the lender deems the existing collateral stronger than other security associated with the new debt, defaulting on any loan may be an...
Problem Loan
What is a Problem Loan? A problem loan is often referred to as a problem credit, or an impaired asset since, counterintuitively, loans are an asset for a creditor (as opposed to a liability for the borrower). In simple terms, a problem loan is one that poses a “challenge” for a lender. It may occur...
Interest
What is Interest? Interest refers to the cost of borrowing money or the reward for lending money. Typically, banks charge interest on money borrowed on top of the expected repayment of the principal. At the same time, banks also pay interest on depositors’ funds in savings and investment accounts. They do so to entice more...
Hard Money
What is Hard Money? Hard money comes with many different meanings depending on the context and can relate to currency, loans, and political donations, to name a few. In general, it refers to a specific funding chain that is generally provided by a government agency or other financial organizations. Rather than a one-time permit, hard...
