LEGAL RATE OF
INTEREST
The maximum rate of interest fixed by the laws of the various states which a lender may charge a borrower for the
use of money.
LENDING
INSTITUTION
Any institution, including a commercial bank, savings and loan association, commercial finance company, or other
lender qualified to participate with SBA in the making of loans.
LEVERAGED
BUY-OUT
The purchase of a business with financing provided largely by borrowed money, often in the form of junk
bonds.
LIEN
A charge upon or security interest in real or personal property maintained to ensure the satisfaction of a debt or
duty ordinarily arising by operation of law.
LIQUIDATION
The disposal, at maximum prices, of the collateral securing a loan and the voluntary and enforced collection of the
remaining loan balance from the obligators and/or guarantors.
LIQUIDATION
VALUE
The net value realizable in the sale (ordinarily a forced sale) of a business or a particular
asset.
LITIGATION
Refers to a loan in "liquidation status" which has been referred to attorneys for legal action.
Also: The practice of taking legal action through the judicial process.
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