These agreements have both pros and cons that you should be aware of before signing one.. Hire purchase agreements are a type of financing agreement where you agree to make regular payments over a set period of time in order to ultimately own the item you are purchasing. There are both pros and cons to … Read more
A shutdown point is the stage in a company’s life cycle at which it can no longer continue operating without incurring additional debt. This point is typically reached when a company is unable to meet its financial obligations, such as paying its employees or suppliers. A shutdown can also occur when a company is unable … Read more
The term “bail-ins during financial crisis” refers to the process whereby financial institutions that are struggling to stay afloat during a financial crisis are bailed out by the government. This is done by injecting capital into the institution, or by providing guarantees for its debts. This helps to stabilize the institution and prevent it from … Read more
Project Finance: Definition, Types of Loans, and How It Works. What is project life cycle? A project life cycle is the process that a project goes through from its initiation to its completion. It is typically divided into four phases: initiation, planning, execution, and closure. The initiation phase is when the project is first proposed … Read more
The recovery rate is the percentage of the face value of a debt instrument that is expected to be repaid to the investor in the event of default. The recovery rate is an important consideration when assessing the risk of a debt investment, as it will determine the amount of loss that an investor would … Read more
A lien is a claim or legal right against a property that secures the payment of a debt or other obligation. A lien arises when a creditor agrees to lend money to a debtor and the debtor agrees to give the creditor a security interest in their property. The debtor gives the creditor a lien … Read more
A commercial loan is a loan that is typically given to a business rather than an individual. The loan may be used for a variety of purposes, such as to purchase equipment, expand a business, or for working capital. Commercial loans are typically made by banks, but there are also many other types of lenders, … Read more
Prepackaged bankruptcies are corporate bankruptcies in which the debtor company and its creditors develop and agree upon a reorganization plan prior to filing for bankruptcy. This type of bankruptcy allows the company to avoid some of the costly and time-consuming aspects of traditional bankruptcy proceedings. Prepackaged bankruptcies are typically used when a company is facing … Read more
A backup line definition is a document that outlines the terms and conditions of a backup line of credit agreement. This document defines the parameters of the agreement, including the borrowed amount, the interest rate, the repayment schedule, and any collateral requirements. Why do issuers of commercial paper back-up their paper with a line of … Read more
A demand letter is a formal notice that requests payment or action from another party. Demand letters are often used to demand payment for a past due debt, such as an overdue bill, or to request action from another party, such as a repair or return of goods. How do you write a demand letter … Read more
