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Banking glossary: Commercial banking terms explained

Get to grips with commercial banking terms and jargon with our simple glossary.



Commercial banking glossary terms 


1. Commercial lending – a loan to a business rather than a loan to an individual consumer. They may have an interest rate based on the LIBOR rate or prime rate and are secured by collateral 


2. Asset-based lending – loaning money in an agreement that is secured by collateral such as stock, plant and machinery, and invoices


3. Bridging – a short-term loan, usually taken out for any amount of time between two weeks to three years pending the arrangement of a longer-term finance arrangement


4. Secured lending – when the borrower is required to give the lender collateral as a form of insurance against defaulting on the loan


5. Term loans – a loan from a bank for a specific amount that has a specified repayment schedule, with a fixed or floating interest rate


6. Trusts – a private legal agreement in which assets such as cash, real estate, and shares are held in trust for a beneficiary


7. Base rate – this is the interest rate that central banks (for example the Bank of England) charge banks for lending to them


8. Factoring – when a company buys a debt or invoice from another company


9. Confidential discounting – a private agreement between an invoice finance provider and a business which remains undisclosed to customers of the business


10. Charge cards – an electronic payment card that charges no interest but requires that you pay the statement balance in full, usually monthly


11. Interest rate – the sum of money you are charged by a lender for borrowing money. This number is usually expressed as a percentage


12. Deposits – a sum of money held by a bank, these can be accessed instantly, fixed for a period of time or accessed within a previously agreed notice period (often 100 days).


Get in touch to discuss your banking needs, or read our glossary of real estate finance terms.


Further reading

Banking Glossary: Real Estate Finance explained

We demystify the world of real estate finance with our glossary of banking terms and jargon.


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Commercial Banking  •  Real Estate  •  Buy to Let