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Glossary of Terms

Set out below is a Glossary of standard transactional terminology for private equity and corporate finance transactions. Use the filter menu if you are looking for a specific term, or to navigate the Glossary alphabetically.

Loan notesThese may be offered by the purchaser of the company shares to the seller agreeing to make payments to the holder of the loan notes at a specified date. It is a form of deferred payment.

Subordinated loanLoans which are ranked after other debt. It is normally repayable after other debt. As such it is more risky for the lender. An example of a subordinated loan is mezzanine finance.

Bridging loanA form of short-term financing used until longer-term financing can be achieved.

Debt financingThe use of borrowed money to finance a business. Different forms of debt can be used to raise money for working capital or capital expenditure such as overdrafts, bank loans, lease financing, commercial mortgage, invoice finance, asset finance or bonds. The loan can be secured or unsecured, short or long-term. The lender receives interest at an agreed rate and if the loan is not repaid may be entitled to take control of or sell assets which are owned by the company.