Business / Loan Glossary

Creditfyi: A web site for checking business credit reports

Current Asset: Assets that will normally be turned into cash within a year.

Current Liability: Liability that will normally be repaid within a year.

Current Ratio: Current assets divided by current liabilities -- a measure of liquidity. Generally, the higher the ratio, the greater the 'cushion' between current obligations and a firm's ability to meet them.

Debt: An amount owed for funds borrowed. The debt may be owed to an organization's own reserves, individuals, banks, or other institutions. Generally, the debt is secured by a note, bond, mortgage . . . View Full Definition

Debt Financing: A loan with pre-agreed terms, including payback schedule and interest.

Debt Service: Amount of payment due regularly to meet a debt agreement; usually a monthly, quarterly or annual obligation.

Debt Service Reserve: Term used to refer to cash reserves set aside by a borrower, either by internal policy or lender covenant, to repay debt in the event that cash generated by operations is insufficient.

Deed Of Trust: In some states loans are secured by means of a document called a deed of trust, instead of a mortgage document.

Default: A failure to discharge a duty. The term is most often used to describe the occurrence of an event that cuts short the rights or remedies of one of the parties to an agreement or legal disput . . . View Full Definition

Delinquent: In a monetary context, something that has been made payable and is overdue and unpaid,

Document Preparation Fee: An amount of money that you may be charged for the preparation of mortgage loan documents. This charge will be shown on the HUD-1 Settlement Statement.

Due Diligence: Refers to the task of carefully confirming all critical assumptions and facts presented by a borrower. This includes verifying sources of income, accuracy of financial statements, value of a . . . View Full Definition

Dun and Bradstreet: Leading provider of business credit information.

Endowment Or Trust: A fund that contains assets whose use is restricted only to the income earned by these assets.

Equifax: One of three leading providers of personal credit information.

Equipment Leases: Leases allowing companies to purchase new equipment.

Equity: This is the dollar amount of your home that you really own. You can calculate your equity by taking the market value of your home and subtracting out the debt that is secured by your home. F . . . View Full Definition

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