(Special Purpose Company)
|A company established for a special purpose that differs from the purpose of ordinary corporate activities aimed at generating profits, such as the liquidation and securitization of real properties. It takes over properties owned by businesses and uses them as collateral to procure funding.
||A type of financing in which debt collection can be achieved solely from the properties provided as collateral when the borrower is unable to repay the debt. It is high risk in the sense that it depends on the earning power of the real estate. The properties are carefully assessed by strict standards and it has a higher interest rate than ordinary loans. It is a common type of loan in the United States.
||The state of an asset or liability not being stated in balance sheets although it is used in the operation of business. Corporate value can be increased by moving any transaction with accounting risks off of balance sheets.
||A method of calculating investment yield for a single fiscal year. It is used for estimating the yield of a property transaction at an early stage. Net operating income (NOI) ÷ Investment
||The sequence of processes from the development of products and other items in a project to sales and the generation of profit. This metaphor comes from oil and natural gas pipelines.