A balloon payment is a large sum repaid as an irregular installment in loan repayment, often seen as the final payment in loan structures where it is significantly larger than previous regular payments.
Inventory financing is a type of short-term loan businesses use to purchase inventory. This is often necessary for small to mid-sized businesses to manage operational cash flow effectively.
A Loan Creditor is an individual or institution that provides financing to a business or individual, thereby becoming entitled to repayment of the principal amount along with interest.
Mezzanine financing is a hybrid form of financing that includes both debt and equity components. It is typically used by companies to fund growth and expansion projects, and it is structured as subordinated debt but often comes with attached equity instruments like warrants or convertible shares.
The establishment of a long-term relationship between a bank and its corporate customers. The main advantage is that it enables the bank to develop in-depth knowledge of a company's business, which improves its ability to make informed decisions regarding loans to the company. The company expects to benefit by increased support during difficult times.
The Small Business Administration (SBA) is a federal government agency based in Washington, D.C., dedicated to supporting and encouraging small businesses through various programs, including low-interest loans to qualified businesspersons.
The Small Firms Loan Guarantee (SFLG) was a government-backed scheme in the UK designed to help small businesses secure financing when they could not offer sufficient collateral. It has been succeeded by the Enterprise Finance Guarantee (EFG).
A short-term credit line allowing business borrowers to access funds quickly and efficiently, often to manage temporary shortfalls in other credit arrangements.
Unsecured debt is an obligation or loan that is not backed by the pledge of specific collateral as security for the repayment of the debt.
