Business Financing Glossary — 860 Terms Defined

Accounts Payable Financing Accounts Receivable (A/R) Line Accounts Receivable Aging Report Accounts Receivable Factoring Accounts Receivable Financing Accredited Investor Accrual Accounting Acquisition Financing Adjustable Rate Loan Administrative Expenses Advance Rate Adverse Action Notice After-Tax Cash Flow Agency Lending Agent Bank Aggregate Loan Limit Agreement to Repay All-In Rate Alternative Credit Data Alternative Investment Market Amortization Amortization Schedule Angel Investor Annual Credit Review Annual Fee Annual Percentage Rate (APR) Annual Percentage Rate (APR) Anti-Money Laundering (AML) Application Fee Application Scorecard Appraisal Report Appraisal Waiver Approved Lender As-Stabilized Value Asset Coverage Ratio Asset Liquidation Asset Quality Asset Turnover Ratio Asset-Backed Securities Asset-Based Lending (ABL) Assumed Debt Audit Trail Auto Dealer Financing Automatic Payment Average Collection Period Average Daily Balance Average Maturity

Back-End Ratio Bad Debt Reserve Balance Sheet Balance Sheet Lending Balloon Maturity Balloon Payment Balloon Payment Schedule Bank Covenant Bank Examination Bank Holding Company Bank Reconciliation Bank Run Banker's Acceptance Banking Regulation Bankruptcy Discharge Bankruptcy Estate Bankruptcy Estate Bankruptcy Exemption Bankruptcy Exemption Bankruptcy Petition Bankruptcy Petition Base Rate Base Rate Basis Point Basis Point Basis Points (BPS) Batch Processing Batch Processing Benefit-Cost Analysis Benefit-Cost Analysis Bill of Lading Bill of Lading Bill of Sale Bill of Sale Blanket Assignment Blanket Assignment Blanket Lien Blended Rate Blended Rate Block Financing Block Financing Blue-Sky Laws Blue-Sky Laws Bond Rating Bond Rating Bonding Capacity Bonding Capacity Bonus Depreciation Book Value Book Value Bootstrapping Borrower Profile Borrower Profile Borrowing Base Certificate Borrowing Base Certificate Borrowing Capacity Borrowing Capacity Branch Banking Branch Banking Break-Even Analysis Break-Even Analysis Bridge Financing Bridge Financing Bridge Loan Broker-Dealer Broker-Dealer Brokerage Account Brokerage Account Budget Deficit Budget Deficit Builder's Risk Insurance Builder's Risk Insurance Burn Rate Business Acquisition Loan Business Assessment Business Assessment Business Broker Business Broker Business Cash Reserve Business Cash Reserve Business Continuity Business Continuity Business Credit Card Business Credit Card Business Credit File Business Credit File Business Credit Profile Business Credit Profile Business Credit Rating Business Credit Rating Business Credit Report Business Credit Report Business Credit Score Business Debt Consolidation Business Debt Consolidation Business Default Business Default Business Equity Business Equity Business Exit Strategy Business Exit Strategy Business Expansion Loan Business Expansion Loan Business Financial Statement Business Formation Business Franchise Loan Business Goodwill Business Guarantee Business Income Statement Business Insurance Premium Business Interruption Coverage Business Leverage Ratio Business Liability Business Liquidity Business Loan Application Business Loan Broker Business Loan Comparison Business Loan Default Rate Business Loan Guarantee Business Loan Interest Rate Business Loan Portfolio Business Loan Refinancing Business Loan Requirements Business Mortgage Business Net Worth Business Operating Costs Business Operating Leverage Business Performance Ratio Business Plan Financing Business Profitability Business Property Loan Business Risk Assessment Business Solvency Business Startup Costs Business Structure Financing Business Tax Return Business Valuation Business Valuation Method Business Working Capital Ratio Buyout Financing

California Commercial Finance Disclosure Law (CFDL) Call Option Capital Adequacy Capital Asset Pricing Model Capital Budget Capital Call Capital Expenditure (CapEx) Capital Expenditure Loan Capital Gains Capital Investment Capital Lease Financing Capital Markets Capital Reserve Capital Stack Capitalization Rate Capitalization Rate (Cap Rate) Capitalized Cost Carve-Out Cash Burn Rate Cash Conversion Cycle Cash Flow Cash Flow Coverage Ratio Cash Flow Financing Cash Flow Forecasting Cash Flow Gap Cash Flow Lending Cash Flow Negative Cash Flow Positive Cash Flow Statement Cash Management Account Cash Reserve Requirement Cash Runway Casualty Insurance Certificate of Deposit Change in Control Chapter 11 Bankruptcy Chapter 7 Bankruptcy Character Assessment Charge-Off Rate Charter Chattel Mortgage Civil Judgment Clawback Provision Clearing Account Closed-End Credit Co-Borrower Co-Investment Co-Signor Liability Collateral Collateral Assignment Collateral Audit Collateral Coverage Collateral Shortfall Collateral Substitution Collateral Valuation Combined Loan-to-Value Commercial Construction Loan Commercial Finance Commercial Lending Standards Commercial Loan Officer Commercial Loan Origination Commercial Loan Underwriting Commercial Mortgage Commercial Mortgage Broker Commercial Paper Commercial Property Appraisal Commercial Real Estate Loan Commercial Truck Financing Commitment Fee Commitment Letter Community Development Financial Institution Community Development Financial Institution (CDFI) Community Reinvestment Act Compensating Balance Competitive Bid Compliance Risk Compound Growth Rate Concentration Risk Conditional Approval Consolidation Loan Construction Draw Schedule Construction Loan Commitment Construction Loan Disbursement Construction-to-Permanent Loan Consumer Financial Protection Bureau Consumer Financial Protection Bureau (CFPB) Consumer Reporting Agency Contingent Liability Continuing Covenant Continuous Funding Convertible Debt Convertible Note Corporate Bond Corporate Finance Corporate Guarantee Corporate Restructuring Cost of Capital Cost of Goods Sold Covenant Compliance Covenant Default Covenant Violation Credit Analyst Credit Application Credit Approval Process Credit Bureau Score Credit Card Merchant Account Credit Ceiling Credit Concentration Credit Default Swap Credit Enhancement Credit Exposure Credit Facility Agreement Credit Freeze Credit Grade Credit History Length Credit Inquiry Impact Credit Insurance Credit Memo Credit Mix Credit Monitoring Service Credit Policy Credit Profile Credit Quality Credit Rating Agency Credit Rehabilitation Credit Report Dispute Credit Reporting Credit Risk Management Credit Risk Model Credit Score Credit Score Range Credit Scoring Model Credit Sensitivity Credit Spread Credit Structuring Credit Support Credit Sweep Credit Threshold Credit Tightening Credit Underwriting Standards Credit Utilization Ratio Credit Utilization Ratio Credit Watch Cross-Border Lending Cross-Collateralization Cross-Default Currency Risk Current Assets Current Liabilities Current Ratio Customer Concentration Risk Cyclical Business Lending

D&B PAYDEX Score Days Payable Outstanding (DPO) Days Sales Outstanding (DSO) Debenture Debt Capacity Debt Ceiling Debt Consolidation Strategy Debt Covenant Package Debt Covenants Waiver Debt Coverage Debt Cycle Debt Forgiveness Debt Instrument Debt Management Plan Debt Maturity Profile Debt Obligation Debt Payoff Calculator Debt Restructuring Debt Schedule Debt Service Coverage Ratio (DSCR) Debt Service Reserve Debt Trap Debt-to-Asset Ratio Debt-to-Income Ratio (DTI) Debt-to-Revenue Ratio Default Default Interest Rate Default Probability Default Rate History Deferred Interest Deferred Payment Loan Deferred Revenue Demand Deposit Demand Loan Demand Note Denial Letter Deposit Account Control Agreement Depository Institution Depreciation Schedule Disbursement Schedule Discounted Cash Flow Diversification Strategy Dividend Recapitalization Documentary Credit Double-Dip Recession Draw Request Draw Schedule Due Diligence Due Diligence Checklist Duration Risk

Early Payment Discount Early Repayment Penalty Earnings Before Interest and Taxes Earnings Before Tax Earnout EBITDA Economic Capital Economic Cycle Effective Annual Rate Effective Interest Rate Emergency Business Loan Employee Retention Credit Encumbered Asset End-to-End Underwriting Enterprise Value (EV) Environmental Due Diligence Equal Credit Opportunity Act (ECOA) Equipment Financing Equipment Lease Equipment Loan Term Equity Cushion Equity Financing Mix Equity Injection Equity Kicker Equity Multiple Escrow Account Escrow Agreement Evergreen Credit Facility Exit Strategy Financing Expense Ratio Export Financing Exposure at Default Extended Payment Terms

Factor Rate Factor Rate Calculator Factoring Fee Fair Lending Fair Market Value Federal Reserve Bank Fee Income FICO SBSS FICO Score FICO Score Tiers Finance Charge Finance Lease (Capital Lease) Financial Distress Financial Due Diligence Financial Leverage Financial Leverage Financial Modeling Financial Performance Metrics Financial Ratio Analysis Financial Reporting Standards Financial Risk Financial Stress Test Fintech Lender First Lien Fixed Asset Loan Fixed Asset Turnover Fixed Charge Coverage Ratio Fixed Interest Rate Fixed Rate Mortgage Fleet Financing Float Period Floating Rate Note Floor Rate Forbearance Forbearance Agreement Forbearance Period Force Majeure Foreclosure Process Foreign Exchange Risk Forward Commitment Franchise Disclosure Document Franchise Fee Financing Franchise Royalty Fraud Detection Free Cash Flow Freight Bill Factoring Front-End Debt Ratio Full Recourse Full-Spectrum Lending Funding Gap Funding Rate Funding Runway Funding Stage Future Receivables Financing

Gap Analysis Gap Financing General Ledger Going Concern Goodwill Goodwill Amortization Government-Backed Loan Grace Period Gross Margin Gross Profit Financing Gross Profit Margin Gross Revenue Lending Growth Capital Guaranteed Loan Program Guaranty Agency Guaranty Fee

Hard Cap Hard Cost Hard Credit Inquiry Hard Money Lender Hard Money Loan Hard Pull Hazard Insurance High-Risk Business Loan High-Yield Debt Historical Cash Flow Hold-Back Reserve Holdback Rate Holding Period Home Equity Business Loan HUBZone Program Hybrid Financing

Income Approach Valuation Income Statement Analysis Income-Based Repayment Incremental Cash Flow Indenture Agreement Indirect Lending Industry Risk Assessment Initial Draw Initial Public Offering Financing Insider Lending Installment Sale Institutional Investor Insurance-Backed Lending Interest Accrual Interest Coverage Ratio Interest Expense Deduction Interest Rate Interest Rate Cap Interest Rate Differential Interest Rate Floor Interest Rate Hedge Interest Rate Risk Management Interest Rate Sensitivity Interest Rate Spread Interest Rate Swap Interest-Only Mortgage Inventory Audit Inventory Financing Inventory Financing Agreement Inventory Turnover Ratio Invoice Assignment Invoice Discounting Invoice Factoring Invoice Finance Facility Invoice Funding Invoice Payment Terms

Joint Venture Financing Junior Creditor Junior Debt Junior Lien

Key Man Insurance Key Performance Indicator Key Risk Indicator Know Your Customer (KYC)

Late Payment Fee Late Payment Penalty Lead Lender Lease Buyout Financing Lease-to-Own Lender of Last Resort Lender Rating Lending Criteria Lending Limit Lending Platform Lending Policy Letter of Intent (LOI) Leverage Buyout Leverage Ratio Leveraged Buyout (LBO) Leveraged Finance Lien Perfection Lien Priority Lien Search Lien Subordination Lien Waiver Limited Guarantee Line Utilization Fee Liquid Assets Liquidation Preference Liquidation Value Liquidity Covenant Liquidity Crisis Liquidity Facility Liquidity Management Liquidity Premium Liquidity Ratio Liquidity Risk Loan Acceleration Loan Application Fee Loan Approval Rate Loan Closing Costs Loan Commitment Loan Constant Loan Conversion Loan Covenant Loan Covenant Package Loan Coverage Ratio Loan Default Management Loan Disbursement Loan Documentation Loan Extension Loan Forgiveness Program Loan Funding Timeline Loan Grade Loan Modification Loan Origination Process Loan Participation Loan Performance Loan Portfolio Management Loan Prepayment Fee Loan Processing Loan Qualification Loan Repayment Strategy Loan Review Loan Servicing Transfer Loan Settlement Loan Stacking Loan Syndication Loan-to-Cost Ratio Loan-to-Cost Ratio (LTC) Loan-to-Value Ratio (LTV) Long-Term Debt Ratio Long-Term Financing Loss Given Default Loss Mitigation Loss Reserve

Marginal Cost of Capital Market Risk Marketplace Lending Material Adverse Change Maturity Extension Maximum Loan Amount Mechanics Lien Medical Practice Loan Merchant Cash Advance (MCA) Mezzanine Capital Structure Mezzanine Financing Micro-Enterprise Loan Mini-Perm Loan Minimum Payment Modified Loan Money Market Account Monthly Payment Calculator Mortgage Broker Network Mortgage Rate Lock Multi-Family Lending Multi-Lender Platform Multiple Draw Loan

Net Income Net Operating Income (NOI) Net Present Value Net Profit Margin Net-30 Account New York Commercial Finance Disclosure Law Non-Bank Lender Non-Dilutive Financing Non-Performing Asset Non-Performing Loan Non-Recourse Debt Non-Recourse Factoring Note Modification Note Payable

Off-Balance Sheet Financing Offer Letter Online Business Loan Online Lending Platform Open-End Credit Operating Agreement Operating Cash Flow Operating Lease Operating Line of Credit Opportunity Cost Origination Fee Origination System Overcollateralization Overdraft Line of Credit Overdraft Protection Owner-Occupied Commercial

Paid-In Capital Partial Release Payment History Payment in Kind Payoff Letter Percentage of Sales Repayment Performance Bond Personal Guarantee Personal Guarantee Waiver Phase I Environmental Assessment Pipeline Financing Pledge Agreement Pledged Asset Portfolio Lender Post-Closing Compliance Post-Closing Condition Pre-Revenue Financing Preferred Equity Prepayment Penalty Prepayment Premium Prime Borrower Prime Rate Principal Balance Reduction Priority Lien Private Credit Fund Private Debt Private Equity Loan Private Placement Pro Forma Financial Statement Pro Forma Income Statement Proceeds Project Finance Promissory Note Default Proof of Revenue Purchase Order Financing Purchase Price Allocation

Qualified Business Income Qualified Lender Quick Ratio

Rate Buydown Rate Cap Agreement Rate Lock Agreement Real Estate Investment Trust Loan Recapitalization Receivable Aging Reconciliation Report Recourse Factoring Recovery Rate Refinancing Refinancing Break-Even Refinancing Costs Regulatory Capital Reinvestment Risk Renewal Fee Repayment Capacity Repayment History Repayment Schedule Repurchase Agreement Residual Value Restricted Cash Return on Assets Return on Equity Return on Investment (ROI) Revenue Share Agreement Revenue-Based Advance Revenue-Based Financing Revolving Credit Revolving Credit Agreement Revolving Credit Facility Risk-Adjusted Return Risk-Based Pricing Roll Rate Runway

Sale-Leaseback Sale-Leaseback Financing Same-Day Funding SBA 504 Loan SBA 7(a) Loan SBA Express Loan SBA Franchise Directory SBA Microloan SBA Preferred Lender Program (PLP) Seasonal Business Loan Second Lien Section 179 Deduction Secured Business Credit Card Secured Loan Agreement Security Agreement Security Interest Perfection Seed Funding Self-Employed Business Loan Seller Discretionary Earnings (SDE) Seller Note Senior Secured Debt Senior Unsecured Debt Service Fee Settlement Agreement Short-Term Business Loan Short-Term Cash Flow Single-Purpose Entity Small Business Administration 504 Loan Small Business Administration Microloan Small Business Credit Initiative Small Business Development Center Small Business Development Center (SBDC) Small Business Grant vs Loan Small Business Investment Company SOFR (Secured Overnight Financing Rate) Soft Cost Financing Soft Credit Inquiry Soft Credit Pull Sole Proprietor Loan Solvency Ratio Special Assets Division Specialty Finance Spread Lending Stabilized Asset Standby Fee Standby Letter of Credit Startup Business Loan Statement of Cash Flows Stress Testing Financials Structured Finance Structured Settlement Sub-Prime Business Lending Subordinate Financing Subordination Agreement Supplier Credit Surety Bond Sweep Account

Tax Lien Release Technology Business Loan Tenant Improvement Loan Term Sheet Negotiation Termination Fee Third-Party Guarantee Time Value of Money Title Insurance Title Search Total Debt Service Total Interest Cost Trade Credit Insurance Trade Finance Facility Tradeline Transaction Fee Transfer Tax Treasury Management Triple Net Lease (NNN) Triple Net Lease Financing Trust Deed Trust Receipt Financing Truth in Lending Act (TILA)

UCC Filing (UCC-1) Uncommitted Line of Credit Underperforming Loan Underwriting Decision Underwriting Guidelines Underwriting Process Uniform Commercial Code Unit Economics Unqualified Opinion Unsecured Business Loan Unsecured Line of Credit Upfront Fee USDA Business & Industry (B&I) Loan

Variable Interest Rate Variable Rate Business Loan Vendor Financing Program Venture Capital (VC) Venture Debt Vintage Analysis Voluntary Default

Waiver of Subrogation Warehouse Line of Credit Working Capital Working Capital Cycle Working Capital Deficit Working Capital Loan Working Capital Management Working Capital Ratio Working Capital Turnover Write-Down Write-Off Policy

Zero-Based Budgeting