Annual Credit Review
What is an Annual Credit Review? An annual credit review is a review process that lenders conduct on current accounts with outstanding credit. Creditors, such as banks, credit bureaus, and financial services companies conduct assessments on both individual and corporate customers to assess their risk level and their ability to continually honor outstanding credit obligations....
Debt Settlement
What is a Debt Settlement? A debt settlement refers to an agreement reached between a creditor and a borrower in which a reduced payment from the borrower is regarded as full payment. In other words, a debt settlement is a debt reduction agreement reached between a creditor and borrower. Understanding a Debt Settlement A debt...
Debt Refinancing
What is Debt Refinancing? Debt refinancing is the replacement of an existing debt by means of another debt with terms and/or conditions that are more favorable. In other words, debt refinancing refers to the replacement of existing debt with new debt. How It Works Debt refinancing is commonly used to take advantage of new financing...
Financial Covenants
What are Financial Covenants? Financial covenants are the promises or agreements entered into by a borrowing party that are financial in nature. An example of a financial covenant is when a borrowing company agrees to maintain (staying above or below) an agreed ratio, typically financial ratios such as the interest coverage ratio, total assets to...
Collateral Quality
What is Collateral? Collateral (often referred to as collateral security) is when an asset is pledged to a lender, by a borrower, in support of a credit request. If a loan cannot be repaid or refinanced, a lender may take enforcement action against the borrower’s assets in order to recover the outstanding loan principal plus...
