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  • Asset – Any item of economic value owned by you or your corporation, especially that which could be converted to cash.

     

  • Bank Base Rate – The minimum interest rate that the bank will charge you for your loan.

     

  • Fixed Rate – The interest rate (i.e. the percentage) applied to the outstanding principal remains constant through out the life of the loan.

     

  • Lender – A financial entity that makes funds available to others to borrow.

     

  • Loan Commitment – A formal offer by a lender making explicit the terms under which it agrees to lend the money to a borrower over a certain period of time.

     

  • Loan Schedule – A listing of the amount of principal and interest, due dates and balance after payment for a given loan.

     

  • LIBOR – London Inter-Bank Offer Rate is the interest rate that the largest international banks charge each other for loans.

     

  • Outstanding Principal – The amount borrowed from the lender which, at a point in time, remains unpaid (this excludes interest outstanding).

     

  • Principal – The amount borrowed from the lender.

     

  • Secured – A loan that is backed by the offering of an asset to the lender.

     

  • Terms – The specific condition and details of an agreement or contract.

     

  • Unsecured – A loan in which has no assets backing the loan.

     

  • Variable Rate – The interest rate (i.e. the percentage) applied on the outstanding principal amount fluctuates from period to period.

     

  • Working Capital – The amount of funds in the business required to finance the day-to-day operations of the business.