The sale by a borrower of some or all of the assets that form the actual or implied security for a loan, often subject to provisions restricting such disposal.
A home equity loan is a loan secured by a second mortgage on one's principal residence, typically used for non-housing expenses. It gained popularity in the late 1980s due to its tax-deductible interest.
Limited recourse financing, also known as project financing, involves securing loans or investments based on the projected earnings and assets of the specific project rather than the borrower's overall assets.
A covenant in a loan agreement wherein the borrower commits to refrain from securing new borrowings during the loan's term or ensures equal and rateable security for any new borrowings, as specifically defined.
A spreading agreement is a financial arrangement that extends the collateral of a loan to include multiple properties, providing lenders with enhanced security and borrowers with greater flexibility.
A trust certificate is a financial instrument issued to finance the purchase of railroad equipment. Under this arrangement, trustees hold the title to the equipment as security for the loan until the debt is fully repaid.
