A bank pool loan (BPL) is a fairly new form of loan, used by US based firms trading on public markets that need funding of under $10,000,000. In a BPL, a group of European based banks (the pool), create a European firm whose sole purpose is to loan money to a US based

company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...

. Because this loan to the European based bank is completely insured, the BPL does not have as high a risk if the loan is defaulted on. Additionally, the pool actually makes more annual interest than if they were to loan money traditionally. This allows US based firms to borrow as much as $10,000,000 completely interest free as long as it is backed by

collateral Collateral may refer to: Business and finance * Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan * Marketing collateral, in marketing and sales Arts, entertainment, and media * ''Collate ...

of some sort (usually

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

). The

Regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...

require that the loan be of "good value" and so the newly formed European

usually requires securities to back the loan to pass this qualification. As its initial intentions are to help induce European companies to invest abroad, it in fact has become a cheap way for low priced companies un the us over the counter markets like the OTCBB and the Pink Sheets to fund their companies by purposely defaulting on the loan and forfeiting the

shares In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...

Details

Bank pool loans (BPL) have only been in existence for the past eight years.{{Clarify, date=November 2009, reason=As of WHEN? Don't say "the past X years" - time keeps moving! Specify an actual start date. In order to encourage European based firms to invest in firms based in foreign nations, Universal

banking regulations Bank regulation is a form of government regulation which subjects banks to certain requirements, restrictions and guidelines, designed to create market transparency between banking institutions and the individuals and corporations with whom they ...

have set forth that any European Union based firm, which is

invested Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

in a non- European Union member nations, which currently are not receiving international aid or have had a significant change in government in the past twenty years and borrow funds no greater than € 7,000,000 EUR or $ 9,874,058.49 USD from any

individual An individual is that which exists as a distinct entity. Individuality (or self-hood) is the state or quality of being an individual; particularly (in the case of humans) of being a person unique from other people and possessing one's own Maslow ...

or group of EU member banking

institution Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions a ...

s ---- The BPL insurance will only apply under the following circumstances: If the loan is made to a firm based in a non EU member country. The Loan is collateralized by some form of equity in the borrowers firm. The Bank or group of banks involved with a given BPL must assign a central Administrator. Other regulations set forth in the BPL guidelines. Credit Loans