Journal of Finance Vol. 41 No. 2 1986
Loan Commitment Contracts, Terms of Lending, and Credit Allocation
Abstract
This paper analyzes the structure of loan commitment contracts and the interrelationships among their component parameters. Lenders offer borrowers a set of loan “packages,” from which the latter may choose that “package” found to be most appealing. Borrowers may “trade off” changes in any loan parameter in exchange for other adjustments. The borrower, at this time, may “purchase” a larger credit ration for a price. Supporting empirical evidence is presented.
- DOI
- 10.1111/j.1540-6261.1986.tb05046.x
- Volume
- 41
- Issue
- 2
- Pages
- 425-435
- Language
- en
- Sources
- crossref openalex