Loan Capital Law and Legal Definition
Loan capital is part of a business' capital used that is (1) not equity capital, (2) earns a fixed rate of interest instead of dividends, and (3) must be repaid within a specified period, regardless of the business' financial position. It is that part of a company's capital structure which is raised by loans. It may be obtained from a bank or finance company as long-term loans, or from debt-equity investors in the form of debentures or preferred stock, and is usually secured by a fixed and/or floating charge on the firm's assets. Loan capital is a commodity whose use value is its ability to earn income in the form of interest. Unlike debt capital, it does not include short-term loans (such as overdraft).
Legal Definition list
Related Legal Terms
- Acquisition and Improvement Loan [Veterans' Relief]
- Acquisition Loan [HUD]
- Acquisition, Development and Construction (ADC) Loan
- Adjustable Rate Mortgage Loan
- Adjusted Capital Contribution
- Administrative Cost of Issuing a Loan Guarantee
- Adventure Capitalist
- Air Loan
- Airport Capital Plan [Aeronautics and Space]
- Allowance for Loan and Lease Losses
