Accounts Receivable
Money owed to a business by customers for goods or services already delivered but not yet paid for.
Amortization
Paying off a loan over time through regular scheduled payments covering both principal and interest.
Bridge Loan
Short-term financing used to bridge a gap until permanent financing or a capital event is arranged.
Cash Flow
The net movement of money in and out of a business — the amount available after operating expenses are paid.
CLTV (Combined Loan-to-Value)
The ratio of all loans secured by a property compared to its appraised value. Lower CLTV means more equity and less lender risk.
Collateral
An asset pledged as security for a loan. If the borrower defaults, the lender can seize it.
DSCR (Debt Service Coverage Ratio)
A ratio assessing a property's ability to cover its loan payments. Calculated by dividing net operating income by total debt service. 1.0 means income exactly covers payments.
Draw Period
The period during which a borrower with a line of credit or HELOC can withdraw funds up to their credit limit.
Factor Rate
A multiplier used in short-term financing products to calculate the total payback amount. A factor rate of 1.35 on $100K means you repay $135K.
Factoring
The sale of accounts receivable (invoices) to a third party at a discount in exchange for immediate cash. Not a loan.
HELOC (Home Equity Line of Credit)
A revolving line of credit secured by the equity in a home, allowing the borrower to draw and repay funds over a set term.
LTV (Loan-to-Value)
The ratio of a loan amount to the appraised value of the collateral asset. Lower LTV means more borrower equity.
Origination Fee
A fee charged by a lender to process and fund a loan — may be a flat amount or percentage of the loan.
PITIA
Principal, Interest, Taxes, Insurance, and Association (HOA) dues — the total monthly housing payment used in underwriting calculations.
Prime Rate
The interest rate banks charge their most creditworthy customers, often used as a benchmark for variable-rate loans.
Purchase Order (PO) Financing
Financing that allows businesses to fund large customer orders by paying suppliers directly, then repaying from customer payment.
Revolving Credit
Credit that can be used, repaid, and reused — like a credit card or line of credit — up to a set limit.
SBA (Small Business Administration)
A U.S. government agency that partially guarantees small business loans made by approved lenders, enabling better terms for borrowers.
Term Loan
A lump sum loan repaid over a fixed period through regular scheduled payments of principal and interest.
Underwriting
The process a lender uses to evaluate borrower risk and determine loan terms — including credit analysis, income verification, and property valuation.
Working Capital
The difference between a business's current assets and current liabilities — the short-term liquidity available for daily operations.