Glossary

Asset Based Loan – Any type of secured financing, both personal and business, used for a small business loan.    The most common types are secured by Real Estate, both residential and commercial.    Other types of collateral that are commonly used are accounts receivable, certificates of deposit, contracts, equipment, merchant receivables, vehicles, and to a lesser degree, patents, fixtures and furnishings, and trademarks.

Bank Statement Funding – A type of financing in which the beginning balances, ending balances,  average balances, and the number of deposits per month are the primary factors looked as part of the evaluation for a credit request.

Equipment Acquisition – One of the most common types of small business funding requests.    Equipment is selected by the applicant and an equipment supplier, also known as a vendor, is chosen.   Sometimes more than one supplier of equipment is requested by the customer.    In such cases, one, or each equipment supplier may provide internal financing.   If not, one vendor may use an outside funding source in order to provide the financing.   In some cases, a second equipment supplier is also used to provide the financing and possibly some of the equipment items.

Accounts receivable financing –  Cash is advanced against the receivables that a customer currently has in order to facilitate a small business loan.   In this case, the credit quality and cash flow of the customers that have yet to pay the account receivable is the focus.  Receivables more than 45 to 60 days old are often not accepted as part of the financing.

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