Nonproductive loan

Definition:

A loan that increases spending power, but is used in business that does not directly increase the economy's output, such as a leveraged buyout loan.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Best-interests-of-creditors test

The requirement that a claim holder voting against a plan of reorganization must receive at least as much as if the debtor were liquidated.

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