- Loan–to-value (LTV) – The maximum amount an institution is prepared to advance as a percentage of the value of the eligible collateral, it being the ratio of the loan amount divided by the collateral’s value;
- Net operating income (NOI) – The overall performance of a firm’s operations before considering nonoperating revenue and expenses, extraordinary items and income taxes; and
- Debt-service coverage ratio (DSCR) – A ratio of net operating income to annual debt service, which indicates how many times a firm is able to meet all of its fixed charges from net operating income.
| IFC Loan-to-Value Ratios in OECD Countries and Emerging Markets | |||
|---|---|---|---|
| Emerging Markets | |||
| Type of Collateral | OECD | Friendly/Reformed | Difficult/Unreformed |
| Immovable Property | ≤ 90% | ≤ 80% | Cities: 60%-80%; rural: 30%-60% |
| Movable Property | |||
| Vehicles | ≤ 100% | 70%-100% | 60%-85% |
| Equipment | ≤ 80% | ≤ 80% | 60%-80%; secondary collateral |
| Accounts Receivable | ≤ 80% | ≤ 50% | Secondary collateral |
| Inventory | ≤ 50% | Secondary collateral | Secondary collateral |
| Source: International Finance Corporation | |||