Distressed loan
Distressed loan means a loan that the borrower does not have the financial capacity to pay according to its terms, as determined by the qualified lender, and exhibits one or more of the following characteristics: (1) The borrower is demonstrating adverse financial and repayment trends. (2) The loan is delinquent or past due under the terms of the loan contract. (3) One or both of the factors listed in paragraphs (1) and (2) of this section, together with inadequate collateralization, present a high probability of loss to the qualified lender.