Loan Structure & Mechanics
“Frame It Tight, Fund It Right.”
The process of designing a loan’s terms, repayment schedule, collateral, and covenants to align borrower needs with lender risk tolerance.
“Assets on Deck, Risk in Check.”
Assets pledged to secure a loan and the percentage of their value that can be borrowed against them.
“Play it clean or face the Scene”
Conditions or performance requirements that borrowers must meet to remain in compliance with loan agreements.
“Skin in the Game, Name on the Line”
Commitments by third parties or owners to repay the loan if the borrower defaults, providing additional security to the lender.
“One follows the loan, the other follows you home”
Defines whether lenders can pursue a borrower’s personal or corporate assets beyond the collateral if default occurs.
“More Flow than what you Owe”
A key measure comparing cash flow available for debt payments to the amount owed, indicating repayment capacity.
“What Builds the Rate You Pay”
How rates are built from benchmark indexes, spreads, and risk premiums.
“The Lump at the End”
Large, lump-sum payments due at the end of a loan term after smaller periodic installments, often used in commercial financing.
“Wait your turn, junior”
Documents that establish repayment priority and temporarily restrict creditor enforcement actions during restructuring.
“A little tweak in how you pay”
Two different ways of structuring loan repayments, particularly in relation to how principal and interest payments are handled.
“Beat the term, meet the burn.”
Charges applied when a borrower pays off a fixed-rate loan early, protecting the lender from lost interest income.
Fees that may apply to early repayment of variable-rate loans, designed to offset reinvestment or yield-maintenance costs.
“Your loan’s life story, line by line”
Timetables that detail how each loan payment is divided between principal reduction and interest over time.
“When Things Go Sideways”
Terms specifying what constitutes a loan default and how lenders and borrowers may resolve or restructure distressed debt.
“Priority isn’t personal — it’s contractual.”
Contracts between multiple lenders outlining their respective rights, priorities, and remedies in a shared credit arrangement.
“LTV talks the value. LTC walks the cost”
Ratios that show a loan’s size relative to property value or project cost, used to gauge leverage and lending risk.