Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Home
  • Economics, Finance, & Analytics
  • Banking, Lending, and Credit Industry

Waterfall Payment Scheme - Definition

Written by Jason Gordon

Updated at December 19th, 2020

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Professionalism & Career Development
  • Courses
+ More
Back to:BANKING, LENDING, & CREDIT INDUSTRY

Waterfall Payment Scheme Definition

A waterfall payment is a payment scheme in which higher-interest loans or higher-tiered creditors receive payment before lower-interest loans or subordinate lenders receive payment. A waterfall payment is a payment (repayment) scheme under complex payment arrangements, it is used for multiple loan arrangement with varying degree of hierarchy and priority. In waterfall payments, multiple loans are split into tranches and higher loans receive interest and principal before lower ones receive any payment of interest. All tiers of loan tranches receive payment in the payment circle but this is done based on hierarchy. For instance, higher-tiered creditors are paid back in full before the lower ones receive principal payments.

References for Waterfall Payment Scheme

  • http://www.businessdictionary.com/definition/waterfall-payment.html
  • https://en.wikipedia.org/wiki/Waterfall
  • https://dictionary.cambridge.org/dictionary/english/waterfall
  • https://www.investopedia.com/terms/w/waterfallpayment.asp

Academic Research on Waterfall Payment Scheme

Global marketing management, Lee, K., & Carter, S. (2011). Strategic Direction, 27(1).Waterfall and sprinkler new-product strategies in competitive global markets, Kalish, S., Mahajan, V., & Muller, E. (1995). international Journal of research in Marketing, 12(2), 105-119.International Market-Entry Decision Models: How Important Are They?, Okonkwo, P. A. (1991). American Journal of Business, 6(2), 62-68.Capturing the cross-national learning effect: An analysis of an industrial technology diffusion, Ganesh, J., & Kumar, V. (1996). Journal of the Academy of Marketing Science, 24(4), 328-337.Converging trends within the European Union: Insights from an analysis of diffusion patterns, Ganesh, J. (1998). Journal of International Marketing, 32-48.Learning effect in multinational diffusion of consumer durables: An exploratory investigation, Ganesh, J., Kumar, V., & Subramaniam, V. (1997). Journal of the Academy of Marketing Science, 25(3), 214-228.Understanding and managing international growth of new products, Stremersch, S., & Tellis, G. J. (2004). International Journal of Research in Marketing, 21(4), 421-438.Project marketing in multi-project organizations: A comparison of IS/IT and engineering firms, Blomquist, T., & Wilson, T. L. (2007). Industrial Marketing Management, 36(2), 206-218.What makes for CRM system successOr failure?, Foss, B., Stone, M., & Ekinci, Y. (2008). Journal of Database Marketing & Customer Strategy Management, 15(2), 68-78.Internationalization strategies of emerging markets firms, Tsai, H. T., & Eisingerich, A. B. (2010). California Management Review, 53(1), 114-135.The international takeoff of new products: The role of economics, culture, and country innovativeness, Tellis, G. J., Stremersch, S., & Yin, E. (2003). Marketing Science, 22(2), 188-208.

Was this article helpful?

Yes
No

Related Articles

  • Accounts Receivable Conversion - Definition
  • Default - Definition
  • Itemized Statement - Definition
  • CAP (Finance) - Definition

©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand