MARKETS GLOSSARY
BPS
Basis Point
One hundredth of one percentage point; 100 basis points equal 1%.
What does BPS mean?
One hundredth of one percentage point; 100 basis points equal 1%. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
BPS in context
A rate increase from 7.00% to 7.25% is a 25-basis-point increase.
Why it matters in financing
BPS can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related markets terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.