Loan Glossary

A deposit made by a buyer to show serious intent when making an offer on a property. Typically 1%–3% of the purchase price, it is applied toward the down payment at closing.

A loan or lease specifically to purchase business equipment. The equipment serves as collateral. Terms typically match the useful life of the equipment (3–7 years).

The difference between a property's market value and the outstanding loan balance. Equity grows as the borrower makes payments and/or the property appreciates in value.

A neutral third party that holds funds or documents during a real estate transaction until all conditions are met. Lenders also use escrow accounts to collect and pay property taxes and insurance on behalf of borrowers.