MARKETS GLOSSARY
Prime
Prime Rate
A benchmark rate published by banks and often used to price commercial credit.
What does Prime mean?
A benchmark rate published by banks and often used to price commercial credit. 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.
Prime in context
A line priced at Prime + 1.5% moves with the lender's stated prime rate.
Why it matters in financing
Prime 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.