banking/ finance principles Flashcards
what is general corporate leading?
where companies borrow money from lenders, for example to fund their day to day operational activities
what is acquisition finance?
where companies or investors borrow money for the specific purpose of financing an acquisition of another company
this type of work might be carried out by a leveraged finance team, alongside other types of lending
what is asset finance?
where a borrower borrows money for the purpose of acquiring specific assets, such as equipment, machinery and vehicles. Usually the assets purchased will be used as a security for the loan.
what is security?
its a form of protection for lenders
it refers to the right given by a borrower to a lender that typically entitles the lender to take control of some or al, of the borrowers assets if the borrower fails to repay the loan as agreed
what are some examples of security?
mortgages
fixed charges
floating charges
guarantees
what is a guarantee?
involves a guarantor making a legal promise to a lender that they will fulfil any outstanding financial obligations covered under the guarantee if the borrower defaults on a loan
what are subsidiaries?
these are companies that are owned or controlled by another company ( parent or holding company )
what is project finance/ infrastructure finance?
where borrowers such as companies or governments, secure long term funding for a large long term project or infrastructure development
the funding for these projects is usually structured so that the borrowed funds are released in traces, the release of each being contingent on the borrower hitting certain milestones
what is an example of a large long term project?
building a wind farm
what is an example of an infrastructure development project?
building an airport or high speed rail network
what is real estate finance?
where borrowers borrow money for the purpose of acquiring property
what are capital markets?
where companies raise money through the capital markets, for instance through raising debt through the debt capital markets or selling equity through equity capital markets
what is restructuring in the event of insolvency?
where the team assists businesses that are experiencing financial difficulties or have been declared bankrupt, for instance by organising the restructuring of its financial arrangements, or helping to administer its assets during a bankruptcy process.
what is insolvency?
a company is considered insolvent when it cannot pay off its debts when they become due, or when the total of tis liabilities exceeds its assets.
in the event of insolvency the business must cease trading
what are liabilities?
legal responsibility for a particular problem or finance its terms outstanding debt
