Delayed Draw Term Loan
A special feature in a term loan that stipulates that the borrower can withdraw predefined amounts of the total pre-approved amount of a term loan at contractual times. This special type of term loan is only offered to individuals and firms that meet and maintain certain contractual requirements and have outstanding credit ratings. Investopedia Says:
There are different types of contractual caveats the borrower must meet, such as maintaining a certain level of cash on hand or maintaining a minimum quick ratio factor. Any contractual obligations will limit the borrower from performing some particular acts, such as over leveraging, but they are still considered a flexible feature for a term loan. Related Terms:
Debt
Debt Financing
Debt Ratio
Equity Financing
Leverage
Loan
Net Debt
Quick Ratio
Refinancing Risk
Term Loan |