Glossary

Tranche

A tranche is a slice of a larger facility with its own terms — letting a loan be drawn in stages or split into layers of differing risk and rate.

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A slice of a facilityOwn terms

Staged drawdownLayered risk

Definition

A tranche is a defined portion of a loan or facility, often with distinct pricing, ranking or drawdown timing. Facilities can be split into tranches by purpose, seniority or schedule.

In plain terms

Instead of one lump, a facility can come in slices — draw tranche A now for equipment, tranche B later for expansion — each on its own terms.

Why it matters for your company

Tranching lets funding match your project timeline, so you pay interest only as you draw. It is common in development and acquisition finance. See drawdown.