glossary

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.