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 ...
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