ability to pay
Definition
Borrower's ability to service a loan from his or her disposable income or cashflow, or the taxpayer's ability to pay the tax. Called 'capacity' in banking, it is a critical factor in obtaining a loan. See also five C's of credit and fixed charge coverage ratio.
ability to pay is in the Banking, Commerce & Finance subject.
ability to pay appears in the definitions of the following terms: dividend cover, risk, weighted average contribution margin ratio, coverage ratio, debt service coverage, gilt edged security, interest coverage ratio and ability to pay principle
This content can be found on the following page:
http://www.businessdictionary.com/definition/ability-to-pay.html
email to a friend print this definition cite this definition








