Standby Letter of Credit (SBLC)
What is a Standby Letter of Credit (SBLC)? A standby letter of credit, abbreviated as SBLC, refers to a legal document where a bank guarantees the payment of a specific amount of money to a seller if the buyer defaults on the agreement. An SBLC acts as a safety net for the payment of a...
Financial Distress
What is Financial Distress? Financial distress is a term commonly used in corporate finance that describes any situation where an individual’s or company’s financial condition leaves them struggling to pay their bills, especially loan payments due to creditors. Severe, prolonged financial distress may eventually lead to bankruptcy. When a condition of financial distress occurs, it...
Solvency Ratio
What is a Solvency Ratio? A solvency ratio is a performance metric that helps us examine a company’s financial health. In particular, it enables us to determine whether the company can meet its financial obligations in the long term. The metric is very useful to lenders, potential investors, suppliers, and any other entity that would...
Senior Bank Loan
What is a Senior Bank Loan? A senior bank loan is a loan made by a bank or other financial institution to a company with a relatively low credit rating, but a rating that is somewhat higher than that of a company that would be considered an issuer of junk bonds. Senior bank loans are...
Microcredit
What is Microcredit? Microcredit is an extremely small loan given to those who lack a steady source of income, collateral, or any credit history. It aims to support and kickstart entrepreneurs who are unable to obtain the financial backing needed to start a small business or capitalize on an idea. It is also more common...
