The following contains a glossary with terms and information you should know about a business loan . Read on if you are interested in obtaining a business loan and want to get started.
The following information was sourced from businesstown.com.
Accounts Receivable Financing - A loan gained by borrowing against receivables. Loans are paid down as receivables are collected.
Annual Fee - The amount charged by the lender each year to cover the administrative costs of the loan.
Business Credit Card - An amount of money, which a business can borrow against at times it needs capital. Using a card accesses the money.
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.
Credit Rating - A predictor of the ability to pay back a loan. The credit rating is a result of credit scoring.
Credit Report - Financial history supplied by a credit information company like Dun and Bradstreet, Equifax, Experian or TransUnion. Contains credit information on a business or an individual, including payment history of bank cards, store cards, mortgages, student loans, and trade payments.
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 payment history, new credit sought by owner of business, and financial strength and longevity of business.
CreditFYI - A web site for checking business credit reports.
Debt Financing - A loan with pre-agreed terms, including payback schedule and interest.
Dun & Bradstreet - Leading provider of business credit information.
Equifax - One of three leading providers of personal credit information.
Equipment Leases - Leases allowing companies to purchase new equipment.
Experian - One of three leading providers of personal and business credit information.
Fixed Interest Rate - An interest rate that is the same throughout the life of a loan.
Interest Rate - The amount charged by a lender for the money borrowed. It can be fixed or variable.
Inventory Financing - Money borrowed on the basis of finished inventory. The loan is paid as inventory is sold.
Line of Credit - An amount of money, which a business can borrow against at times it needs capital. Often accessed by check, ATM, or business card.
LiveCapital.com - A web site for small business loan offers from a variety of lenders instantly.
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