Net worth: Difference between revisions
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''Loan documentation''. | ''Loan documentation''. | ||
Broadly, Net worth is the value of equity, based on book values, which a borrower covenants to maintain at a minimum absolute or relative level (for the protection of the position of the lender). | Broadly, Net worth is the value of equity, based on book values, which a borrower covenants to maintain at a minimum absolute or relative level (for the protection of the position of the lender). | ||
The definition of Net worth for covenant compliance purposes will often be a point of negotiation between the lender and the borrower. For example, ''Tangible net worth'' excludes intangible fixed assets from the total figure. | The definition of Net worth for covenant compliance purposes will often be a point of negotiation between the lender and the borrower. | ||
For example, ''Tangible net worth'' excludes intangible fixed assets from the total figure. | |||
== See also == | == See also == | ||
* [[Covenant]] | * [[Covenant]] | ||
* [[Tangible net worth]] | * [[Tangible net worth]] | ||
Revision as of 15:37, 21 August 2013
Loan documentation.
Broadly, Net worth is the value of equity, based on book values, which a borrower covenants to maintain at a minimum absolute or relative level (for the protection of the position of the lender).
The definition of Net worth for covenant compliance purposes will often be a point of negotiation between the lender and the borrower.
For example, Tangible net worth excludes intangible fixed assets from the total figure.
