Glossary

39 terms, defined in plain English.

A

asset based lending — Asset-based lending is a secured financing method where a lender extends credit primarily based on the value of a company’s collateral, such as accounts…

B

bridge loan facility — A bridge loan facility is a short-term financing instrument designed to provide immediate capital to cover a temporary cash-flow gap or to facilitate a…
business credit score — A numerical rating that evaluates a company’s creditworthiness and ability to fulfill financial obligations, such as repaying loans and honoring vendor payment…
business debt refinancing — The process of replacing existing business debt obligations with new loans or credit facilities, typically to secure more favorable interest rates, extend…
business debt refinancing options — The strategic process of replacing existing business liabilities with new debt instruments that offer more favorable terms, such as lower interest rates…
business funding application process — The structured sequence of steps a business undertakes to solicit, submit, and negotiate capital from lenders or investors, encompassing eligibility…
business line of credit — A business line of credit is a flexible financing arrangement where a lender approves a maximum borrowing limit, allowing a company to draw funds as needed…
business line of credit limit — The maximum principal amount a lender authorizes a borrower to draw against a revolving credit facility, serving as the upper boundary for available working…
business term loan — A business term loan is a lump-sum capital advance provided by a lender that is repaid over a fixed schedule with interest, typically used for significant…

C

commercial construction loan — A short-term, high-interest financing instrument used to fund the acquisition of land and the construction of commercial real estate projects, typically…
commercial loan application — A formal request submitted by a business to a financial institution or alternative lender seeking debt financing for operational needs, capital expenditures…
commercial term loan — A commercial term loan is a lump-sum business loan provided by a bank or alternative lender that is repaid over a fixed schedule with regular payments of…
crowdfunding campaign — A fundraising initiative where a business or individual solicits small financial contributions from a large number of people, typically via online platforms…

D

debt service coverage — A financial ratio that measures a business’s ability to generate sufficient cash flow to cover its total debt service obligations, including both principal and…

E

equipment financing loan — A secured debt instrument where the purchased machinery or heavy machinery serves as collateral, allowing businesses to acquire assets with reduced upfront…

I

invoice factoring lending — Invoice factoring lending is a financial arrangement where a business sells its accounts receivable (outstanding invoices) to a third-party lender at a…

L

line of credit — A business line of credit is a flexible financing arrangement where a lender approves a maximum borrowing limit, allowing a company to draw, repay, and redraw…
loan approval credit check — The formal evaluation of a borrower’s creditworthiness conducted by a lender to determine eligibility, interest rates, and loan terms during the underwriting…
loan approval process — The loan approval process is the structured sequence of evaluation steps a lender undertakes to assess a borrower’s creditworthiness, financial stability, and…
loan to value — Loan to Value (LTV) is a financial ratio that compares the amount of a loan to the appraised or fair market value of the asset securing it, expressed as a…

M

mezzanine debt financing — A hybrid capital instrument combining features of senior debt and equity, typically used to finance growth, acquisitions, or buyouts when traditional bank…

S

safe agreement funding — Safe agreement funding refers to capital raised by a company through the issuance of Simple Agreements for Future Equity, a legal instrument that provides…
sba 504 loan — A U.S. Small Business Administration (SBA) 504 loan is a long-term, fixed-rate financing program designed to help small businesses acquire major fixed assets…
sba 7a loan — A 7(a) loan is the U.S. Small Business Administration’s primary program for providing financial assistance to small businesses, where the government guarantees…
seasonal working capital — Seasonal working capital refers to the temporary increase in current assets required to support business operations during predictable periods of high demand…
secured business lending — A financing arrangement where a borrower pledges specific assets as collateral to guarantee repayment, reducing lender risk in exchange for potentially lower…
secured commercial loan — A business debt instrument where the borrower pledges specific assets as collateral to guarantee repayment, reducing lender risk in exchange for typically…
seed funding stage — Seed funding stage is the earliest formal phase of startup financing, where founders raise initial capital to develop a minimum viable product, validate market…
series a funding — Series A funding is the first significant round of venture capital financing raised by a startup after its initial seed stage, typically used to scale…
series b funding — Series B funding is the second major stage of venture capital financing, occurring after a company has achieved product-market fit and demonstrated initial…
short term business loan — A short term business loan is a financing instrument that provides a lump sum of capital to a company with a repayment period typically ranging from three…

U

unsecured business lending — A financing arrangement where a lender provides capital to a business without requiring specific physical assets, such as real estate, equipment, or inventory…
unsecured business loan — A business financing instrument that does not require the borrower to pledge specific physical assets, such as real estate or equipment, as collateral to…

V

venture capital funding — Venture capital funding is equity financing provided by professional investors to early-stage, high-growth companies in exchange for ownership stakes and…

W

working capital cash flow — The net movement of liquid funds into and out of a business’s short-term operational cycle, reflecting the timing differences between receiving customer…
working capital cycle — The working capital cycle is the number of days it takes for a business to convert its investments in inventory and other resources into cash flows from sales.
Working capital gap — The timing difference between cash a business needs for day-to-day operations and cash currently available from operations.
working capital loan — A short-term debt financing instrument designed to cover immediate operational expenses and bridge cash-flow gaps without requiring the liquidation of…
working capital requirement — The minimum amount of liquid assets a business must hold to cover its short-term operational expenses and current liabilities.