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LEASE
A contract through which an owner (the lessor) of property (real or personal) conveys the right to use its property to another party (the lessee) for a specified period of time (the lease term) for specified periodic payments.
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 in the making of loans.
LESSEE
The party to a lease agreement who is obligated to pay the rentals to the lessor and is entitled to use and possess the leased property during the lease term.
LESSOR
The party to a lease agreement who has legal or tax title to the property (in the case of a true tax lease), grants the lessee the right to use and possess the leased property for the lease term and is entitled to receive the rental payments.
LETTER OF INTENT
A letter, which states an intention, willingness and ability to do business. Some letters of intent may be binding upon the parties.
LEVERAGE
The degree to which an investor or business uses borrowed money. Measured by the debt/equity ratio.
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 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.
LOAN AGREEMENT
Agreement to be executed by borrower, containing pertinent terms, conditions, covenants and restrictions.
LOAN PAYOFF AMOUNT
The total amount of money needed to meet a borrower's obligation on a loan. It is arrived at by accruing gross interest for one day and multiplying this figure by the number of days that exist between the date of the last repayment and the date on which the loan is to be completely paid off. This amount, known as accrued interest, is combined with the latest principal and escrow balances that are applicable to what is now referred to as the loan payoff amount. In the case where prepaid interest exceeds the accrued interest the latter is subtracted from the former and the difference is used to reduce the total amount owed.
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