Evergreen Funding


DEFINITION of 'Evergreen Funding'

1. A British term that describes a revolving credit arrangement in which the borrower periodically renews the debt financing rather than having the debt reach maturity.

2. The gradual infusion of capital into a new or recapitalized enterprise. This type of funding differs from the situation in which the aggregate capital required for a business venture is supplied up-front, in which case the company invests in short-term, low-risk securities until it is ready to use the money for business operations.

BREAKING DOWN 'Evergreen Funding'

1. In a normal debt-financing arrangement, company-issued bonds or debentures have a maturity date and require principal repayment at some future point in time. An evergreen funding arrangement, however, allows a business to renew its debt periodically, pushing back the maturity date each time so that the time until maturity remains relatively constant while the arrangement is in place.

2. This use of the name comes from coniferous evergreen trees, which keep their leaves and stay green throughout the entire year, rather than losing them during winter. Similarly, evergreen funding means capital is provided throughout the course of a company's development phase.

  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. Capital

    1) Financial assets or the financial value of assets, such as ...
  3. Allocated Funding Instrument

    A specific type of insurance or annuity contract that pension ...
  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  5. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  6. Debenture

    A type of debt instrument that is not secured by physical assets ...
Related Articles
  1. Investing Basics

    Will Corporate Debt Drag Your Stock Down?

    Borrowed funds can mean a leg up for companies or the boot for investors. Find out how to tell the difference.
  2. Investing Basics

    What Is A Corporate Credit Rating?

    Is the bond you're buying investment grade, or just junk? Find out how to check the score.
  3. Personal Finance

    The Frosty, Festive World Of Investing

    From Santa Claus rallies to evergreen loans, Wall Street can be a veritable winter wonderland for investors.
  4. Investing

    Debt Reckoning

    Learn about debt ratios and how to use them to assess a company's financial health. You could save a lot of money!
  5. Economics

    Explaining Silo Mentality

    A silo mentality occurs when certain departments in an organization do not share information or knowledge with other departments.
  6. Economics

    5 Steps of a Bubble

    In the financial sense, a bubble refers to a situation where the price of an asset far exceeds its fundamental value.
  7. Credit & Loans

    Home-Equity Choice: Loan or Line of Credit?

    Before using your home as loan collateral, consider both your financing needs and your appetite for uncertainty.
  8. Credit & Loans

    5 Steps To Getting a Home-Equity Loan/Credit Line

    Want to use your residence as collateral for some financing? Our handy how-to guide to getting a home-equity loan or line of credit explains it all.
  9. Credit & Loans

    Home-Equity Loan vs. HELOC: Which Is Better?

    Knowing the difference between a home-equity loan and a HELOC is important. Here's how to tell which is a better fit for your needs.
  10. Entrepreneurship

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  1. What is evergreen funding?

    Evergreen funding is a term used to describe the incremental addition of money into a business. Before a business is started ... Read Full Answer >>
  2. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  3. What are typical forms of long-term debt for a public company?

    Public companies fund their operational needs and capital expenditures with equity or debt. Most often, companies choose ... Read Full Answer >>
  4. What is the difference between subordinated debt and senior debt?

    The difference between subordinated debt and senior debt is the priority in which the debt claims are paid by a firm in bankruptcy ... Read Full Answer >>
  5. How would a standby letter of credit be used during an export transaction?

    A standby letter of credit is typically used to provide a bank guarantee of payment for an exporter in the event that an ... Read Full Answer >>
  6. What are some reasons banks deny applications for checking accounts?

    Consumers and businesses use credit to finance major purchases or emergency expenses that exceed regular cash flow. Credit ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!