Loan-to-Value Ratio (LTV)

Definition

The ratio of a loan amount to the appraised value of the underlying collateral, expressed as a percentage. LTV is a primary risk metric used by lenders to assess the adequacy of collateral coverage — a lower LTV indicates greater equity cushion and lower credit risk. In intangible asset lending, LTV ratios are typically more conservative (often 30-50%) than for tangible asset-backed facilities, reflecting the greater uncertainty in intangible asset realisability.