safety margin

safety margin definition - business

safety margin

The amount in excess of the minimum requirement. For example, a borrower maintains a balance of $6,000 in his or her account, a safety margin of $1,000 above the lender's compensating balance requirement of $5,000. An engineer builds in a safety margin by utilizing components that are stronger than called for by the manufacturer.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.