purpose statement

Definition

Statement submitted by a loan borrower that specifies what the loan, which is backed by securities, will be used for. The statement also asserts that the borrower will abide by guidelines set forth by the Federal Reserve regarding the purchase of securities and will not take part of any action that violates these rules.

Use purpose statement in a sentence

You need to make sure that you fill out a full purpose statement so that you know exactly what you need.

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Our brand new teams' purpose statement was very clear and lucid and was backed by securities, like it should be.

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When my company needed to take out a new revolving credit line, my boss put me in charge of explaining to the bank what we needed the funds for, and put me in charge of drafting the purpose statement.

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purpose loan non-purpose loan