Advance Rate
/ˈæd.væns reɪt/
Definitions
- (n.) The percentage of the value of collateral that a lender will loan to a borrower before the collateral is sold or liquidated.
The advance rate on the secured loan was set at 80% of the inventory's appraised value.
Forms
- advance rate
- advance rates
Related terms
See also
Commentary
Advance rate is crucial in secured lending, reflecting lender risk tolerance and influencing borrowing capacity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.