Sterling loan. A loan of a bill of sterling exchange. The borrower of the bill gives his note for it
and pledges stocks or other property for its payment when due. Then he sells the bill of exchange
and obtains the money on it, unless he should wish to use it in discharging a remittance abroad, in
which case he forwards it to London or wherever the obligation may be payable. When the
obligation becomes due it is (generally) settled by the delivery of a demand bill of sterling
exchange which the debtor (the borrower of the original bill) has purchased for the purpose.
Sterling loans are obtained when it is difficult to obtain money in the usual ways.