Capital Structures
The rate is not the cost. Repayment structure, collateral requirements, covenants, and prepayment terms determine what financing costs and how much risk you carry.
These guides break down how commercial loans are structured so you know what you are agreeing to before you sign.
Structure Guides
Amortization vs. Interest-Only Payments
A structural comparison of amortizing and interest-only repayment formats in commercial lending, covering mechanics, cost implications, and appropriate...
Balloon Payments
Balloon payments require borrowers to repay a large lump sum at the end of a loan term after...
Blanket Liens
A blanket lien gives a lender a security interest in all of a borrower's business assets, providing broad...
Collateral Valuation
Collateral valuation determines the recoverable worth of assets pledged against commercial loans. Lenders use standardized appraisal methods and...
Cross-Collateralization
Cross-collateralization ties multiple assets to one loan or multiple loans to one asset pool, giving lenders broader security...
Debt Service Coverage Ratio (DSCR)
The debt service coverage ratio (DSCR) measures whether a business generates enough cash flow to cover its debt...
Debt-to-Equity Ratio
The debt-to-equity ratio measures how much of a company's capital structure relies on borrowed funds versus owner investment....
Fixed vs Variable Interest Rates
Fixed and variable interest rates define how borrowing costs behave over the life of a commercial loan. Understanding...
Loan Covenants
Loan covenants are contractual conditions embedded in credit agreements that require borrowers to maintain specific financial metrics and...
Loan-to-Value Ratios
Loan-to-value (LTV) ratios measure the percentage of a property or asset's appraised value that a lender will finance....
Mezzanine Financing
Mezzanine financing is a hybrid capital instrument combining subordinated debt with equity participation, filling the gap between senior...
Personal Guarantees
Personal guarantees make business owners personally liable for commercial debt. Understand the types, legal implications, and negotiation strategies...
Prepayment Penalties
Prepayment penalties are fees lenders charge when borrowers pay off a loan before its scheduled maturity date. These...
SBA Equity Injection Requirements (10% Rule Explained)
Equity injection and down payment requirements define how much capital borrowers must contribute from their own resources to...
Subordinated Debt
Subordinated debt sits below senior obligations in the capital stack, absorbing losses first in exchange for higher yields....
UCC Liens
UCC liens are public filings that give lenders a legal claim on business assets used as collateral. Understanding...