There are many terms used in the world of business finance, so here is our A-to-Z list to help you navigate your way:
- Asset Finance – a funding solution used to purchase business assets.
- Business Loan – another finance agreement used to purchase items for the business.
- Cashflow – the level of cash a business has.
- Debt Finance – also known as invoice finance where funding is secured against accounts receivable.
- Equity – the value of the business (based on liabilities deducted from assets).
- Factoring – the same as invoice and debt finance.
- Gross Profit – the gross income of the business (calculated by reducing the cost of goods from revenue).
- Hire Purchase – a finance contract where goods are purchased using a deposit and then subsequent monthly payments.
- Interest – the charge associated with borrowing money over a set period.
- Journal – the ongoing record of the business’s financial transactions.
- Key Performance Indicators – set in place to measure the businesses performance against key targets.
- Line of Credit – funding which gives a business the ability to drawdown on funding when they need it.
- Mortgage – a commercial mortgage used for purchasing premises.
- Net Profit – deducting the total gross profit from all business expenses gives you your bottom line.
- Overdraft Facility – an agreement which allows a business to withdraw more money than what exists in their account.
- Profit – the total amount of business revenue once relevant expenses have been subtracted.
- Quarterly Reporting – keeping track of income and expenditure to assist with business planning purposes.
- Refinance – the ability to refinance existing debt through a new funding agreement.
- Stocking Finance – also known as inventory finance where business can secure funding against the value of their stock.
- Turnover – the total number of sales made over a set period of time.
- Underwriter – a specialist that evaluates finances and assess the risk associated with offering a funding solution.
- Variable Rates – applies to a form of funding where the interest rate is varied so monthly repayment could regularly change.
- Working Capital – cash available to a business generally uses for day-to-day expenses.
- X-Value Adjustment – a type of adjustment applied to a business contract.
- Yields – the return on investment over a set period, often displayed as a percentage.
- Zero Interest – where no interest is applied to any form of business finance.
If you are looking for any help in relation to business finance please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.