Acquisition Loan
Barron's Real Estate Dictionary:
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Acquisition Loan
Money borrowed for the purpose of purchasing a property.
Example: The developer negotiated an acquisition loan for the purchase of land and a development loan to improve the land for homesites.
Example: The developer negotiated an acquisition loan for the purchase of land and a development loan to improve the land for homesites.
| Acquisition Cost, Acquisition | |
| Acquisition, Development, and Construction (ADC) Loan, Acre |
Investopedia Financial Dictionary:
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Acquisition Loan
A loan given to a company to purchase a specific asset or to be used for purposes that are laid out before the loan is granted. The acquisition loan is typically only able to be used for a short window of time, and only for specific purposes.
Once repaid, funds available through an acquisition loan cannot be reborrowed as with a revolving line of credit at a bank.
Investopedia Says:
Acquisition loans are sought when a company wants to complete an acquisition for an asset but doesn't have enough liquid capital to do so. The company may be able to get more favorable terms on an acquisition loan because the assets being purchased have a tangible value, as opposed to capital being used to fund daily operations or release a new product line.
Related Links:
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. The Basics Of Mergers And Acquisitions
Companies use M&As and spinoffs to boost profits - learn how you can do the same. Cashing In On Corporate Restructuring
Borrowed funds can mean a leg up for companies, or the boot for investors. Find out how to tell the difference. Will Corporate Debt Drag Your Stock Down?
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Barron's Real Estate Dictionary
Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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