UNIT 5 - LOANS AND CREDIT

Match the words with their definitions.

• portfolio

• 2. all the securities and financial assets held by a financial institution or an individual

• collateral

• 4. something of value that secures a loan or other credit; if the borrower cannot repay, the lender can sell it to pay off the loan

• maturity

• 3. an evaluation of a borrower’s ability to pay interest and pay back a loan in the future

• credit rating

• 1. the abbreviation for a company’s earnings before interest and taxes

• EBIT

• 5. the date on which a loan must be repaid, or the length of time until this date

1    the difference between the interest rate a lender pays and the rate it charges its borrowers

1    the expenses of operating a business that are not directly related to individual products or services [e.g. electricity, telephones, administrative costs]

8     the maximum amount that a bank will lend to a customer

the money generated from a business’s normal activities

the price (interest rate] that a financial institution must pay for the use of money

Normally the bank analyzes the customer's annual (a)   and current ​ (b)   .​

• reports
• figures

The bank has to evaluate the customer's current and future ____.

The bank discusses the loan with the ____.

• shareholder

• customer

• creditor

• branch manager

Normally the company should be able to repay the loan from its ____ or its EBIT.

• retained earnings

• expenses

• overhead costs

• operating cash flow