LENDING GLOSSARY
Down Payment
Down Payment
Cash paid by the borrower toward an acquisition or financed asset.
What does Down Payment mean?
Cash paid by the borrower toward an acquisition or financed asset. 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.
Down Payment in context
A borrower pays $100,000 down on a $500,000 equipment purchase.
Why it matters in financing
Down Payment 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 lending 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.