Business / Loan Glossary

Business Credit Card: An amount of money, which a business can borrow against at times it needs capital. Using a card accesses the money.

Business Plan: A document that describes an organization's current status and plans for several years into the future. It generally projects future opportunities for the organization and maps the financial . . . View Full Definition

Capital: Broadly, all the money and other property of a corporation or other enterprise used in transacting its business.

Capital Markets: Those financial markets, including institutions and individuals, that exchange securities, especially long-term debt instruments.

Capitalization: Long-term debt, preferred stock and net worth. The loan capital of a community development loan fund; includes that which has been borrowed from and is repayable to third parties as well as . . . View Full Definition

Cash Flow Financing: Short-term loan providing additional cash to cover cash shortfalls in anticipation of revenue, such as the payment(s) of receivables.

Cash-Out Refinancing Loan: A loan that refinances a prior mortgage and that provides additional cash to the borrower. Funds.

Closing Costs: A general term to describe the fees that a borrower will pay at closing. Sometimes called 'settlement fees.'

Collateral: Assets pledged to secure the repayment of a loan.

Commercial Real Estate Loans: Similar to residential mortgages, but collateral is business property. Interest rates are usually fixed, the length of the loan can range from 5 - 20 years and payments due monthly.

Commercial Term Loans: Loans made to businesses that can be either secured and unsecured. Usually made to mid-size and large businesses.

Conforming Loans: Loans which conform to Fannie Mae guidelines.

Courier Fee: This is a fee that may be charged to send documents or payments by courier, messenger or overnight mail service to various parties involved in the loan transaction.

Covenant: An agreement or promise to do or not to do a particular thing; to enter into a formal agreement; a promise incidental to a deed or contract. The following are functional objectives guiding m . . . View Full Definition

Credit Rating: A predictor of the ability to pay back a loan. The credit rating is a result of credit scoring

Credit Report: This is a report which is generated by a credit reporting agency (such as Trans Union, Experion or Equifax). It is supposed to show accurately the history of your on-time and late payments o . . . View Full Definition

Credit Score: This is a number that is supposed to show the lender how likely you are to repay a loan--whether you are a good or poor credit risk. This score can be a very big factor in determining whethe . . . View Full Definition

Credit Scoring: The evaluation system used by lending institutions to determine relative credit riskiness of a business or consumer. When evaluating businesses, it generally considers factors such as credit . . . View Full Definition

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