Business / Debt Glossary

Late Charge: A charge imposed by a lender to a borrower when the borrower fails to make payment on the due date.

Laundry (Money): The manipulation of money obtained in a wrongful manner, for example theft, so as to seem to have originated from a lawful source. An example is to pay the unlawful money into an overseas ba . . . View Full Definition

Lease: A contract in which the legal owner of property or other asset agrees to another person using that property or asset in return for a regular specified payment (known as rent) over a set term . . . View Full Definition

Legacy: Another term for bequest, that is, the making of a gift by will. In the main there are three main types of legacy. Pecuniary legacy: A gift of a fixed sum of money left for example to an ind . . . View Full Definition

Lender: A person or company that offers to lend money to a borrower for a given period of time. The borrower is obliged to repay the loan either by instalments or single payment together with specif . . . View Full Definition

Liability: The debts of a person or company

Liability Insurance: Insurance against legal liability to pay compensation and court costs where the insured has been found negligent in respect of injuries sustained by another person or damage to his/her property.

Life Assurance: An insurance policy which, in return for the payment of regular premiums, pays a lump sum on the death of the insured. In the case of policies limited to investments which have a cash value, . . . View Full Definition

Limited (LTD): Ltd' after a company name indicates that the company is privately owned with 'limited liability' status. This means that the directors of the company are not liable for the company's debts i . . . View Full Definition

Liquid Assets: Cash plus assets which can readily be converted into cash.

Liquidated Damages: A definite amount of damages, set forth in a contract, to be paid by the party breaching the contract. A pre-determined estimate of actual damages from a breach.

Loan: An advance of money from a lender to a borrower over a period of time. The borrower is obliged to repay the loan either at intervals during or at the end of the loan period together with interest.

Loan Account: An account, opened for a customer by a bank, following the granting of a loan. The amount of the loan is credited to the customer's current account and similarly debited to the loan account. . . . View Full Definition

Loan Policy: A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss caused by invalid title in the borrower, or . . . View Full Definition

Loan Ratio: The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum pe . . . View Full Definition

Loan Sharking: Charging an illegally high interest rate on a loan.

Lower Earnings Limit: The level of income at which employees start to pay Class 1 National Insurance contributions.

Lump Sum: A sum of money paid in a single instalment.

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