Loan to Value (LTV)
One of the joys of working for Business Loan Solutions is educating our clients on different financial terms and products. We decided to start blogging about the questions we receive the most. We’ll keep this short and simple.
Today’s term is Loan to Value or (LTV)
Loan to value is the ratio of the maximum loan amount over the collateral property’s value. It represents what percentage of a property’s value the lender is willing to extend as a loan. Higher loan to values represent greater risk for the lender because there is less of a cushion protecting their principal if the borrower defaults.