In
finance, "participation" is an ownership
interest in a
mortgage or other
loan. In particular, loan participation is a cooperation of multiple lenders to issue a loan (known as participation loan) to one borrower. This is usually done in order to reduce individual
risk
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
s of the lenders.
The term is also used as a synonym to profit sharing, an
incentive whereby employees of a company receive a share of the profits of the company.
References
*''
Black's Law Dictionary''
Loans
Business law
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