participation loan

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Participation Loan

Definition:
A "participation loan" is a type of loan that is shared by a group of banks. These banks come together to lend money because the amount of money needed is too large for just one bank to provide alone.

Advanced Usage:

In finance, participation loans are useful for spreading risk among several lenders. Each bank involved in the loan takes a part of the loan amount and shares the responsibility of repayment.

Word Variants:

• Participate (verb): To take part in something.
• Participation (noun): The act of taking part in something.

Different Meaning:

While "participation loan" specifically refers to a banking term, "participation" in general can refer to being involved in any activity, such as a participation in a game or meeting.

Synonyms:

• Syndicated loan: This is a similar term where multiple lenders come together to fund a single borrower.
• Group loan: This can refer to a loan taken by a group, although it may not specifically mean multiple banks.

Idioms and Phrasal Verbs:

• "In the same boat": This idiom means being in a similar situation as others. It can relate to banks being in the same situation when they share a loan.
• "Go in together": This phrasal verb can mean to combine resources or efforts, similar to how banks join to create a participation loan.

Summary:

A participation loan is a financial agreement where multiple banks come together to lend a large amount of money that would be too risky or too large for one bank to handle alone.

Academic

Noun

1. a loan that is shared by a group of banks that join to make a loan too big for any one of them alone

Synonyms

• loan participation
• participation financing