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Back-to-Back Loan: indirect lending where funds are loaned through an intermediary, which enters into separate but linked agreements with a lender and a borrower who are typically related parties. This practice may raise treaty clearance issues if the intermediary is not the beneficial owner of the UK interest, though the nature of the arrangement may not always be immediately obvious. The term is also used to describe parallel loans, whereby companies in different countries each advance sums in their own currency to fund the other company, a US company providing a UK company with dollars, the UK reciprocating in sterling. Other forms of currency management make this arrangement rare.

Balloon Loan or Repayment: this is very similar to a bullet loan or repayment, except that the term “balloon” refers to a very large payment and does not necessarily imply that the principal is repaid in a single sum. The repayment terms may be heavily back-loaded.

Base Case: any kind of model, a business plan for the next five years, say, where the assumptions about performance are neither optimistic nor pessimistic.

Base Rate: this usually refers to the rate at which the Bank of England lends to other banks, though it can mean an interest rate which is used as a basis for pricing loans. Particular rates are arrived at by adding a margin to the base rate reflecting the risk of the lending proposition. It is not the same as LIBOR, which is a reference rate.

Basis Point: one hundred basis points (bp) make up one percentage point, so a single basis point represents a hundredth of one per cent. It is a convenient way of expressing small differences in interest rates in an intelligible way: “seventy-five basis points” is easier than “point seven five per cent”. It is used for expressing margins. For example, a loan might be made at LIBOR + 225 bp i.e. LIBOR + 2.25%.

BBA British Bankers’ Association: the leading trade association for the UK banking and financial services sector, which sets LIBOR and publishes it on the BBA LIBOR website. See INTM577035.

Beneficial Ownership: in international tax, a term mainly relevant to double taxation issues, specifically treaty clearance. The beneficial owner has rights of ownership over a source of income - to enjoy, dispose, etc, as they wish - even where legal ownership lies elsewhere. Under most double taxation agreements, a claim to receive interest gross must be made by the beneficial owner of the income concerned, not merely an intermediary or conduit. See conduit financing.

Bond: a debt instrument issued for a period in excess of a year. The issuer (borrower) is obliged to repay the principal on a specified future date, as well as (usually) making periodic interest payments. Corporate bonds are issued by companies, but governments, local authorities and other public bodies may also issue them. They can be bought and sold. See INTM571030 and the Corporate Finance Manual.

Bullet Loan: this is a type of loan where repayment of the entire principal, and sometimes the interest, falls due at the end of the loan period.

BVCA: the British Private Equity and Venture Capital Association, the representative body for the industry, is involved in negotiating memoranda of understanding with HMRC. It has an extensive website.