An acceleration clause is a loan provision giving the lender the right to declare the entire amount immediately due and payable upon the violation of a specific provision of the loan, such as failure to make payments on time.
A Bilateral Bank Facility is a loan arrangement made between a single bank and a corporate customer, facilitating a direct relationship between the lender and the borrower. This kind of facility contrasts with a syndicated bank facility, which involves multiple lenders.
A financial arrangement in which both the maximum (cap) and minimum (floor) rate of interest payable on a loan are fixed in advance, offering protection against interest rate fluctuations.
The act of affixing one's signature on a contract, such as a loan, in addition to the principal signature of another. Both signers are liable for the loan or other contract.
A critical clause in a loan agreement where breaching certain conditions can make the loan immediately repayable. The breaching of any covenant clause, failure to pay, failure to perform other duties and obligations, false representation and warranty, material adverse change, bankruptcy, and alienation of assets all account for events of default.
Prepaid interest is the interest paid in advance before it is earned, often seen in loan agreements and mortgage practices. Generally, prepaid interest is not tax deductible, except for the customary points paid by a borrower on the initial mortgage to purchase a principal residence.
Representation and Warranty is a clause in loan agreements where borrowers assure their ability to borrow and provide guarantees, along with other critical confirmations.
