What Is A Compensating Balance
What Is A Compensating Balance. A loan contract, may require. Sometimes referred to as an offsetting balance, the.
Many banks require that their borrowers. The funds that a corporate borrower is required to keep on deposit in a financial institution in order to satisfy the terms of a loan agreement. However, they cannot use this.
A Compensating Balance Is A Minimum Balance That A Company Must Maintain In An Account As Part Of An Agreement With A Current Or Potential Lender.
A compensating balance is an amount that borrowers must maintain in their accounts. A compensating balance is an amount that a borrower must maintain in an account with their bank in order to qualify for a loan. A compensating balance is a minimum bank account balance that a borrower agrees to maintain with a lender.
A Compensating Balance Is A Minimum Balance That Must Be Maintained In A Bank Account, And The Compensating Balance Is Used To Offset The Cost Incurred By A Bank To Set Up A Business.
A compensating balance is a balance that must be kept with a lender in order for a borrower to qualify for a line of credit or instalment loan. A compensating balance is a minimum balance that must be maintained in a bank account,. A compensating balance reduces the lending cost.
The Funds That A Corporate Borrower Is Required To Keep On Deposit In A Financial Institution In Order To Satisfy The Terms Of A Loan Agreement.
However, they cannot use this. Balance offset banking costs in lending or credit levels. A compensating balance is an amount held by a borrower to offset the cost of lending.
What Is The Accounting For A Compensating Balance For The Borrower?
Many banks require that their borrowers. Bankers often offer this as a means of. What is a compensating balance?
The Deposit May Be In A.
In the event that the compensating balance drops below the minimum required, the interest rate applied to the loan will rise accordingly. It is a minimum balance that. If you want to take out a loan or qualify for a line of credit, there are obligations for you to meet.
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