Commercial Lending Glossary
A glossary of definitions for common terms used in commercial real estate hard money lending & CRE investing.
To give an individual or entity money or an asset under the condition of repayment (usually with interest). Lenders can be individuals, companies, or banks, and may provide funds for many reasons.
A legal right which serves to guarantee an underlying obligation, such as a repayment of a loan. Liens can be acquired by a creditor or granted by the property owner or a law. If the underlying obligation is not satisfied, the creditor can seize the asset.
Line of Credit
A line of credit, or LOC, represents an arrangement between a financial institution and customer that gives the borrower access to a specified amount of funds. The borrower can access funds from the LOC at any time, limited by the maximum balance as set out in the agreement.
The extent to which a person or entity has cash to meet immediate or near-term obligations. Liquidity can also include assets which can quickly be converted for the same purpose. In a market context, liquidity refers to how readily assets within that market can be bought and sold. While cash is the most liquid asset, assets such as real estate or antique cars are much more illiquid.