Types of lending

Types of lending

This overview is a guide to the Banking & Finance content within the Types of lending subtopic, with links to appropriate materials

Introductory guide to lending

Practice Note: Introductory guide to lending provides introductory information on lending transactions. It discusses the different types of loan transaction and provides an overview of the structure of a typical loan transaction, before discussing the documentation involved in loan transactions and security, quasi-security and intercreditor issues. It outlines some key legal issues that can arise on lending transactions before providing an overview of specialist finance transactions, including project finance, real estate finance, acquisition finance and asset finance.

Overdrafts, term loans and revolving credit facilities

Three common types of loan facility are:

•
overdrafts
•
term loans, and
•
revolving credit facilities (RCFs)

An overdraft is the most common form of bank lending and is used to help solve short-term, day-to-day cash flow issues. As such, an overdraft facility is sometimes referred to as a 'working capital facility'.

A term loan enables the borrower to borrow sums for a specified period of time, known as the 'term'. The

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Banking & Finance News

LMA responds to FCA consultation on fund tokenisation implications for loan markets

The Loan Market Association (LMA) has submitted a response to Financial Conduct Authority consultation CP25/28 on progressing fund tokenisation, highlighting how the proposed model for tokenised fund units and settlement assets could reduce friction across loan value chains. The LMA supports the FCA's outcomes-based approach to token standards while identifying barriers including unclear tax treatment, cross-jurisdictional recognition issues, and integration challenges with existing market infrastructure.

ICMA publishes joint statement on EU securitisation framework reforms

The International Capital Market Association (ICMA) has published a joint statement with six other trade associations responding to European Commission proposals for EU securitisation framework reforms announced in June 2025. The statement, developed with AFME, AIMA, EFAMA, IACPM, LMA and MFA, expresses concerns that certain proposed measures may discourage rather than encourage investment in securitisation. The associations highlight four key issues: limitations on global market access for EU investors, disproportionate monetary sanctions, reclassification of private securitisations as public securitisations increasing reporting burdens, and mandatory reporting of private securitisations to repositories. The associations call for a more proportionate and globally aligned approach to achieve the objective of revitalising the EU securitisation market.

EESC issues opinion on proposed amendments to the EU securitisation framework

The European Economic and Social Committee (EESC) has issued an opinion on proposed amendments to the EU securitisation framework, aimed at reviving the market in a targeted manner to support strategic objectives such as green, digital and social transitions. The Committee endorses the Commission’s goals but stresses that recalibrating prudential requirements alone will not suffice. It calls for complementary measures to strengthen equity financing and address structural weaknesses in the real economy, alongside harmonised ESG reporting standards to enhance transparency and sustainability in securitisation practices.

Commission proposes streamlined SFDR rules to simplify ESG disclosures

The European Commission has proposed amendments to the Sustainable Finance Disclosure Regulation (SFDR) (Regulation (EU) 2019/2088) to simplify and improve transparency rules for sustainable financial products. The reform aims to make disclosures shorter, clearer and more comparable for investors, reduce compliance costs for financial market participants (FMPs) and enhance the EU’s competitiveness in sustainable finance. These proposals follow a review by the Commission which found the SFDR’s current framework too complex and lengthy, hampering investors’ ability to understand and compare products and contributing to risks of greenwashing and mis-selling.

View Banking & Finance by content type :

News