Small Business Loan Glossary / SBA Business Finance Programs

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Small Business Terms (SBA Programs)


Definition Accounting
Definition Accounting, Accounting is an art of recording, classifying, summarizing and interpreting financial events and transactions in a significant manner and in terms of money. - SBA Loans, Financing Programs: Small Business Administration

Definition Accounts Payable
Definition Accounts Payable, Amounts owed by an organization or individual to another for goods or services it has received. - SBA Loans, Financing Programs: Small Business Administration

Definition Accounts Receivable
Definition Accounts Receivable, Amounts due to an organization or individual from another for goods or services it has supplied evidenced by notes, statements, invoices or other written evidence of a present obligation. - SBA Loans, Financing Programs: Small Business Administration

Definition Acid Ratio
"Definition Acid Ratio, Current assets less inventories divided by current liabilities. Also known as "Quick

Definition Acquisition
Definition Acquisition, The acquiring of supplies or services by the federal government with appropriated funds through purchase or lease. whether the supplies or services are already in existence or must be created, developed, demonstrated and evaluated. An acquisition begins at the point when FCS personnel identify and establish needs and ends with the close out of the contract file. - SBA Loans, Financing Programs: Small Business Administration

Definition Advocacy
Definition Advocacy, It is a specialized SBA office created to be the voice for small business in the federal government. It also provide statistics for small businesses. - SBA Loans, Financing Programs: Small Business Administration

Definition Affiliates
Definition Affiliates, Business concerns, organizations, or individuals that control each other or that are controlled by a third party. Control may include shared management or ownership; common use of facilities, equipment, and employees; or family interest. The affiliated business concerns need not be in the same line of business. - SBA Loans, Financing Programs: Small Business Administration

Definition Amortization
Definition Amortization, Amortization is Gradual reduction of a term debt by periodic payment sufficient to pay current interest and to eliminate the principal at maturity. The amount of periodic payments depends, in part, on the principal, the interest rate and the length of time allowed for repayment. - SBA Loans, Financing Programs: Small Business Administration

Definition Ancillary Bond
Definition Ancillary Bond, A type of surety bond where the surety company guarantees other factors which are incidental and essential to the performance of a contract. - SBA Loans, Financing Programs: Small Business Administration

Definition Annual Receipts
Definition Annual Receipts, A firm’s total receipts are the firm's gross or total income, plus cost of goods sold, as defined by or reported on the firm's Federal Income Tax return. net capital gains or losses, nor taxes collected for and remitted to a taxing authority if included in gross or total income. - SBA Loans, Financing Programs: Small Business Administration

Definition Apprised Value
Definition Apprised Value, The value placed on an item, product or business by an appraiser, recognized for experience in a particular field. The opinion of appraiser is based on his knowledge, experience, and analysis of the property. - SBA Loans, Financing Programs: Small Business Administration

Definition Asset Based Financing
"Definition Asset Based Financing, Asset based loans are loans where the amount of money a creditor will lend is secured against an asset which act as collateral to the loaned amount .It is also called "accounts

Definition Assets
Definition Assets, The entire property of a person, association, corporation, or estate applicable or subject to the payment of debts. Tangible assets include equipment, inventory, and real property. Intangible assets include goodwill, patents and other intellectual property that are owned by a company and given financial value in the company's balance sheet. - SBA Loans, Financing Programs: Small Business Administration

Definition Assumptions
Definition Assumptions, The act of assuming/undertaking another's debts or obligations. - SBA Loans, Financing Programs: Small Business Administration

Definition Auction
"Definition Auction, A public sale of goods to the highest bidder. Also referred to as: public auction, auction sale or sale. The item seldom comes with a guarantee to its age, origin or authorship and thus auctions are "buyer

Definition Bankruptcy
Definition Bankruptcy, A condition in which a business cannot meet its debt obligations and petitions a federal district court for either reorganization of its debts or liquidation of its assets. In the action the property of a debtor is taken over by a receiver or trustee in bankruptcy for the benefit of the creditors. This action is conducted as prescribed by the National Bankruptcy Act, and may be voluntary or involuntary. - SBA Loans, Financing Programs: Small Business Administration

Definition Bid Bond
Definition Bid Bond, A type of surety bond wherein the surety company guarantees the bidder will enter into a contract and furnish the required payment and performance bonds. - SBA Loans, Financing Programs: Small Business Administration

Definition Book Value
Definition Book Value, The value of an item or property at a specific time after deducting depreciation from original cost. - SBA Loans, Financing Programs: Small Business Administration

Definition Break Even Point
Definition Break Even Point, The break-even point in any business is that point at which the volume of sales or revenues exactly equals total expenses -- the point at which there is neither a profit nor loss -- under varying levels of activity. The break-even point tells the manager what level of output or activity is required before the firm can make a profit; reflects the relationship between costs, volume and profits. - SBA Loans, Financing Programs: Small Business Administration

Definition Bundling Report
Definition Bundling Report, The purpose of this page is to provide a system to alert SBA's Office of Government Contracting of contract bundling practices on the part of federal agencies that preclude a small business from successfully competing for a contract. - SBA Loans, Financing Programs: Small Business Administration

Definition Business Concern
Definition Business Concern, A business concern eligible for assistance as a small business is a business entity organized for profit, with a place of business located in the United States, and which operates primarily within the United States or makes a significant contribution to the US economy through payment of taxes or use of American products, materials, or labor. - SBA Loans, Financing Programs: Small Business Administration

Definition Business Death
Definition Business Death, Voluntary or involuntary closure of a firm or establishment. - SBA Loans, Financing Programs: Small Business Administration

Definition Business Dissolution
Definition Business Dissolution, For enumeration purposes, the absence from any current record of a business that was present in a prior time period. - SBA Loans, Financing Programs: Small Business Administration

Definition Business loans
Definition Business loans, Business loans a business loan is specifically taken out to fund your business. They are normally available to be paid back over a period of between 1 and 15 years. - SBA Loans, Financing Programs: Small Business Administration

Definition Cancelled Loan
Definition Cancelled Loan, The annulment or rescission of an approved loan prior to disbursement. - SBA Loans, Financing Programs: Small Business Administration

Definition Capacity to Repay
Definition Capacity to Repay, The determination made by a lender on whether a borrower can repay a loan after examining financial statements, financial ratios and operating data. - SBA Loans, Financing Programs: Small Business Administration

Definition Capital Expenditures
Definition Capital Expenditures, An expenditure made for assets with useful lives of more than one year. It is usually done to buy, build, improve or fix an asset Usually capital expenditures may not be deducted in the year they are paid, even if they are paid in connection with a trade or business. In other words, they are capitalized and generally may be depreciated or amortized. - SBA Loans, Financing Programs: Small Business Administration

Definition Capitalization
"Definition Capitalization, The basic resources of a company including the owner's equity, retained earnings and fixed assets. One of the "Five

Definition Capitalized Property
Definition Capitalized Property, Personal property of the business which has an average dollar value of $300.00 or more and a life expectancy of one year or more. Capitalized property shall be depreciated annually over the expected useful life to the agency. To be capitalized, assets also must have estimated useful lives of one year or more, and are not intended for sale in the ordinary course of operations. - SBA Loans, Financing Programs: Small Business Administration

Definition CAPLines Loan Program
Definition CAPLines Loan Program, CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. There are five short-term working-capital loan programs for small businesses under the CAPLines umbrella. - SBA Loans, Financing Programs: Small Business Administration

Definition Carrying Costs
Definition Carrying Costs, Inventory costs associated with capital, storage, handling expenses, insurance, taxes and obsolescence. - SBA Loans, Financing Programs: Small Business Administration

Definition Cash Conversion Cycle
Definition Cash Conversion Cycle, Length of time required for a business to convert raw materials into finished goods, finished goods into sales, and accounts receivable into cash.These factors vary according to the type of industry and scale of production,which varies in turn with seasonality and the rise and fall of sales. - SBA Loans, Financing Programs: Small Business Administration

Definition Cash Discount
Definition Cash Discount, An incentive offered by the seller to encourage the buyer to pay within a stipulated time. For example, if the terms are 2/10/N 30, the buyer may deduct 2 percent from the amount of the invoice (if paid within 10 days) otherwise, the full amount is due in 30 days. Cash discounts encourage consumers to pay cash, usually so that the retailer can avoid processing fees for credit card transactions. - SBA Loans, Financing Programs: Small Business Administration

Definition Cash Flow
Definition Cash Flow, Measure of a company's financial health. The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.). Net cash flow is the difference when subtracting cash outflow. - SBA Loans, Financing Programs: Small Business Administration

Definition CAWBO
Definition CAWBO, This is the office set up by SBA to assist women Business Owners, to increase federal contracting opportunities for women-owned small business (WOSB) and to increase the number of WOSB that successfully compete in the federal marketplace. - SBA Loans, Financing Programs: Small Business Administration

Definition CBD Commerce Business Daily
Definition CBD Commerce Business Daily, It is a list that contains lists notices of proposed government procurement actions contract awards, sales of government property, and other procurement information. It also contains daily list of proposed government procurement actions. - SBA Loans, Financing Programs: Small Business Administration

Definition CDC Certified Development Company
Definition CDC Certified Development Company, A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private sector lenders to provide financing to small businesses. There are about 270 CDCs nationwide. Each CDC covers a specific geographic area. - SBA Loans, Financing Programs: Small Business Administration

Definition Central Contract Registration CCR
Definition Central Contract Registration CCR, A database of all businesses contracting or seeking contracts with the federal government. It is maintained by the U.S. Department of Defense. - SBA Loans, Financing Programs: Small Business Administration

Definition Certificate of Competency COC
Definition Certificate of Competency COC, It’s a certificate issued by the Small Business Administration (SBA) to a person holder making him "responsible" (in terms of capability, competency, capacity, credit, integrity, perseverance, and tenacity) for the purpose of receiving and performing a specific government contract. - SBA Loans, Financing Programs: Small Business Administration

Definition Certificate of deposit
Definition Certificate of deposit, Short-term instruments issued by commercial banks. - SBA Loans, Financing Programs: Small Business Administration

Definition Certified 8a Firm
Definition Certified 8a Firm, A firm is called a certified firm if it is owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the Small Business Administration’s 8(a) Business Development Program. - SBA Loans, Financing Programs: Small Business Administration

Definition Certified Loan Program CLP
Definition Certified Loan Program CLP, Under these programs, lenders are given partial or full authority to approve loans, which results in faster service from SBA. Only those lenders qualify for SBA’s streamlined lending programs, which are heavily involved in regular SBA loan guarantee processing and have met some other criteria. . They receive a partial delegation of authority and are given a three-day turnaround by the SBA on their applications (they may also use regular SBA loan processing). Certified lenders account for nearly a third of all SBA business loan guaranties. - SBA Loans, Financing Programs: Small Business Administration

Definition Charged off Loan
Definition Charged off Loan, Its an Accounting transaction of a uncollectible loan for which the principal and accrued interest were removed from the receivable accounts. - SBA Loans, Financing Programs: Small Business Administration

Definition Charge Off
Definition Charge Off, An accounting transaction removing an uncollectible balance from the active receivable accounts. - SBA Loans, Financing Programs: Small Business Administration

Definition Closed End Loan
Definition Closed End Loan, A loan is closed ended loan for which amount of loan have been disbursed, and all required documentation has been executed, received and reviewed. For statistical purposes, first or total disbursement is counted as a closed loan. - SBA Loans, Financing Programs: Small Business Administration

Definition Closing
Definition Closing, Closing involves the Actions and procedures that are required to effect the documentation and disbursement of loan funds after the application has been approved, and the execution of all required documentation and its filing and recordation where required. - SBA Loans, Financing Programs: Small Business Administration

Definition COC Certificate of Competency
Definition COC Certificate of Competency, Certificate issued to a small business after checking the firm's capabilities to perform on the contract by SBA industrial and financial specialists. If the business demonstrates the ability to perform, the SBA issues a COC to the contracting officer requiring the award of that specific contract to the small business. - SBA Loans, Financing Programs: Small Business Administration

Definition Collateral
Definition Collateral, An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract. - SBA Loans, Financing Programs: Small Business Administration

Definition Collateral Document
Definition Collateral Document, A legal document covering the item(s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc. - SBA Loans, Financing Programs: Small Business Administration

Definition Collection Policy
Definition Collection Policy, The procedures that a firm follows to collect accounts receivable.Actions a business takes to collect slow-paying accounts. It is a procedure that a firm follows to collect accounts receivable. - SBA Loans, Financing Programs: Small Business Administration

Definition Commercial Loan
Definition Commercial Loan, A loan from a commercial bank to a business. The terms of the loan vary depending on the economy, the ability of the business to repay the loan and past business dealings between the business and the bank. Loans may be secured by the particular asset being purchased, and/or with additional assets of the company (i.e., accounts receivables, property, other tangible assets, etc.). - SBA Loans, Financing Programs: Small Business Administration

Definition Compromise
Definition Compromise, Compromise is settlement of a claim resulting from a defaulted loan for less than the full amount due. Compromise settlement is a procedure available for use only in instances where the government cannot collect the full amount due within a reasonable time, by enforced collection proceedings or where the cost of such proceedings would not justify such effort, to help increase the loan applicant's chances of success. - SBA Loans, Financing Programs: Small Business Administration

Definition Conditions
"Definition Conditions, Eternal or macro economic factors such as government regulation, competition, industry trends, national economic trends, that can affect the success of a business. One of the "Five

Definition Consortium
Definition Consortium, Consortium is a coalition of organizations, such as banks and corporations, set up to fund ventures requiring large capital resources. - SBA Loans, Financing Programs: Small Business Administration

Definition Contingency funds
"Definition Contingency funds, Money appropriated (to the governor in Kentucky) to meet expenses, which are unforeseen at the time of budget preparation. Also known as "Precautionary

Definition Contingent Liability
Definition Contingent Liability, A liability of a company that is contingent on some future event, such as the resolution of a lawsuit. - SBA Loans, Financing Programs: Small Business Administration

Definition Contract
Definition Contract, A mutually binding legal relationship obligating the seller to furnish supplies or services (including construction) and the buyer to pay for them. - SBA Loans, Financing Programs: Small Business Administration

Definition Contracting
Definition Contracting, Contracting involves Purchasing, renting, leasing, or otherwise obtaining supplies or services from non-federal sources. It includes the description of supplies and services required, the selection and solicitation of sources, the preparation and award of contracts, and all phases of contract administration. It does not include grants or cooperative agreements. - SBA Loans, Financing Programs: Small Business Administration

Definition Contractor Team Arrangement
Definition Contractor Team Arrangement, An arrangement in which (a) two or more companies form a partnership or joint venture to act as potential prime contractor; or (b) an agreement by a potential prime contractor with one or more other companies to have them act as its subcontractors under a specified government contract or acquisition program. - SBA Loans, Financing Programs: Small Business Administration

Definition Copyright
Definition Copyright, The legal right granted to authors, composers, artists and publishers to protect their thoughts and ideas for exclusive publication, reproduction, sale and distribution of their works. - SBA Loans, Financing Programs: Small Business Administration

Definition Corporation
Definition Corporation, The most common form of organizing a business — the organization's total worth is divided into shares of stock, and each share represents a unit of ownership and is sold to stock holders.. A corporation is considered a separate entity from the stockholders for legal and tax purposes. The process of incorporating should be completed with the state's secretary of state or state corporate counsel and usually requires the services of an attorney. - SBA Loans, Financing Programs: Small Business Administration

Definition Costs
Definition Costs, Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for. Many different kinds of costs are defined and used like allowable, direct, indirect, and operating costs. - SBA Loans, Financing Programs: Small Business Administration

Definition Covenant
Definition Covenant, It is Signed written agreement between two or more parties (nations) to perform some action. A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure. - SBA Loans, Financing Programs: Small Business Administration

Definition Covenant not to compete
Definition Covenant not to compete, The agreement by the seller of a business, not to enter into competition with the buyer of the business within a specific area for a specific period of time. - SBA Loans, Financing Programs: Small Business Administration

Definition Credit
Definition Credit, Time allowed for the payment of goods or services sold on trust as well as confidence in the buyer's ability and intention to fulfill their financial obligations. - SBA Loans, Financing Programs: Small Business Administration

Definition Credit Period
Definition Credit Period, Length of time allowed before the credit buyer must pay for credit purchases. It is total number of days after the beginning of the credit period until full payment of the account is due. - SBA Loans, Financing Programs: Small Business Administration

Definition Credit policy
Definition Credit policy, Actions taken by a business to grant, monitor and collect the cash for outstanding accounts receivable. - SBA Loans, Financing Programs: Small Business Administration

Definition Credit Rating
Definition Credit Rating, A grade assigned to a business concern to denote the net worth and credit standing to which the concern is entitled in the opinion of the rating agency as a result of its investigation. - SBA Loans, Financing Programs: Small Business Administration

Definition Current Assets
Definition Current Assets, The assets which can be quickly converted to cash. Cash, investment accounts, inventories and accounts receivable are in this category. - SBA Loans, Financing Programs: Small Business Administration

Definition Current Ratio
"Definition Current Ratio, The ratio of current assets to liabilities. Also called "quick

Definition Customer Targeting
Definition Customer Targeting, Identifying and marketing to those groups of customers most likely to buy a particular product or service, e.g., promoting boat products to boat owners. - SBA Loans, Financing Programs: Small Business Administration

Definition Debenture
Definition Debenture, A debenture is a certificate that shows the debt of a government or company. It is backed only by the general credit of the issuer. It is not secured by the assets of the issuer.Since there is no collateral, these bonds may carry a higher risk, and therefore a higher rate of return, when compared to an asset-backed bond. - SBA Loans, Financing Programs: Small Business Administration

Definition Debt Capital
Definition Debt Capital, Business financing that normally requires periodic interest payments and repayment of the principal within a specified time. Funds are borrowed through external sources. - SBA Loans, Financing Programs: Small Business Administration

Definition Debt Financing
Definition Debt Financing, The provision of long term loans to small business concerns in exchange for debt securities or a note. Firms acquires funds by borrowing money from creditors in the form of long-term notes, mortgages, leases, or bonds. - SBA Loans, Financing Programs: Small Business Administration

Definition Debt to Total Assets Ratio
Definition Debt to Total Assets Ratio, Total debt divided by total assets. Indicates what proportion of the company's assets are being financed through debt. If the ratio is less than one, most of the company's assets are financed through equity. If the ratio is greater than one, most of the company's assets are financed through debt. - SBA Loans, Financing Programs: Small Business Administration

Definition Deed of Trust
Definition Deed of Trust, A document under seal which, when delivered, transfers a present interest in property. May be held as collateral. - SBA Loans, Financing Programs: Small Business Administration

Definition Default
Definition Default, Default happens in case of nonpayment of principal and/or interest on the due date as provided by the terms and conditions of the note. - SBA Loans, Financing Programs: Small Business Administration

Definition Defense Loan and Technical Assistance Program
Definition Defense Loan and Technical Assistance Program, DELTA - A joint effort of the United States Small Business Administration and the Department of Defense to provide financial and technical assistance to defense-dependent small businesses adversely affected by defense reductions. - SBA Loans, Financing Programs: Small Business Administration

Definition Deferred Loan
Definition Deferred Loan, Loans whose principal and or interest installments are postponed for a specified period of time. - SBA Loans, Financing Programs: Small Business Administration

Definition Depreciation Schedule
Definition Depreciation Schedule, It is a Table showing amount of depreciation expense, accumulated depreciation, and book value for each period of time for a plant asset. - SBA Loans, Financing Programs: Small Business Administration

Definition Disbursement
Definition Disbursement, It is payment of funds by lender to borrower in whole or part. It may be concurrent with the closing, or follow it. - SBA Loans, Financing Programs: Small Business Administration

Definition Discount Interest rate
Definition Discount Interest rate, In discount interest rate the amount of interest is deducted from the face value of the loan with the borrower receiving the remainder. - SBA Loans, Financing Programs: Small Business Administration

Definition Equity Financing
Definition Equity Financing, This involves selling a portion of your company in order to receive funds.. Equity financing includes long-term subordinated securities containing stock options and/or warrants. Utilized in SBIC financing activities. In general, venture capital firms provide this type of financing. - SBA Loans, Financing Programs: Small Business Administration

Definition Factoring
Definition Factoring, Factoring is the process of purchasing commercial accounts receivable (invoices) from a business at a discount. Factoring of foreign accounts receivable is less common than with domestic receivables. - SBA Loans, Financing Programs: Small Business Administration

Definition Fair Market value
Definition Fair Market value, The amount at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts. A licensed, professional appraiser, primarily based on the sales prices of comparable properties recently sold nearby, determines the value of a property. - SBA Loans, Financing Programs: Small Business Administration

Definition Five C Of Credit
Definition Five C Of Credit, Five "Cs" OF Credit - A system used by lending officers to evaluate a loan application: Character, Cash Flow, Collateral, Capitalization and Conditions. - SBA Loans, Financing Programs: Small Business Administration

Definition Fixed Costs
Definition Fixed Costs, Expenses that do not change regardless of production increases or decreases, for example, rent, insurance, interest on loans, etc. - SBA Loans, Financing Programs: Small Business Administration

Definition Goodwill
Definition Goodwill, In accounting, goodwill is any advantage, such as a well-regarded brand name or symbol, that enables a business to earn better profits than its competitors. It is the value of the business' good name, its customer relations, high employee morale, and other factors that might translate into earning power. - SBA Loans, Financing Programs: Small Business Administration

Definition Guaranty
Definition Guaranty, It is an agreement to pay the debt or perform the obligation of another in the event the debt is not paid or obligation is not performed. - SBA Loans, Financing Programs: Small Business Administration

Definition HUBZone
Definition HUBZone, The HUBZone Empowerment Contracting Program, comes under the Small Business Reauthorization Act of 1997.The program is made to facilitate economic development and creates jobs in urban and rural communities by providing contracting preferences to small businesses that are located in a HUBZone and that hire employees who live in a HUBZone. The program is regulated and implemented by SBA. - SBA Loans, Financing Programs: Small Business Administration

Definition Industry
Definition Industry, A group of firms producing a similar product is called industry for example auto industry. There are approximately 1,000 activities which are classified as industries under NAICS by US Office of Management and Budget (OMB).SBA has established a size standard for each industry, except those in the Sector of public administration. - SBA Loans, Financing Programs: Small Business Administration

Definition Insolvency
Definition Insolvency, The inability of a borrower to meet financial obligations as they mature. It occurs when an organization's assets or resources are not adequate to cover its debts and obligations. - SBA Loans, Financing Programs: Small Business Administration

Definition Installment loan
Definition Installment loan, One in which the amount of interest is added to the principal and repaid by the borrower in periodic payments. The loan balance may not be increased during the life of the loan and the payments remain the same amount for the entire term of the loan. - SBA Loans, Financing Programs: Small Business Administration

Definition Interest
Definition Interest, An amount paid a lender for the use of funds. - SBA Loans, Financing Programs: Small Business Administration

Definition Intermediary Organization
Definition Intermediary Organization, Organizations that play a fundamental role in encouraging, promoting, and facilitating business-to-business linkages and mentor-protégé partnerships. These can include both nonprofit and for-profit organizations: chambers of commerce; trade associations; local, civic, and community groups; state and local governments; academic institutions; and private corporations. - SBA Loans, Financing Programs: Small Business Administration

Definition Inventory
Definition Inventory, Merchandise that is purchased and/or produced and stored for eventual sale. - SBA Loans, Financing Programs: Small Business Administration

Definition Inventory Turnover
Definition Inventory Turnover, The ratio of annual sales to average inventory which measures the speed that inventory is produced and sold. Low turnover is an unhealthy sign, indicating excess stocks and/or poor sales. A high inventory turnover may indicate that a company has low inventory levels, which could result in a business loss. - SBA Loans, Financing Programs: Small Business Administration

Definition Inverse Order Of Maturity
Definition Inverse Order Of Maturity, It is overpayment of loan by borrowers that are larger than the authorized repayment schedules the overpayment is credited to the final installments of the principal which reduces the maturity of the loan and does not affect the original repayment schedule. - SBA Loans, Financing Programs: Small Business Administration

Definition Joint Venture
Definition Joint Venture, An agreement between two or more parties to invest in a specific single business or property to achieve a single objective. In order to determine the size of a joint venture the revenues or the employees of both firms are added together. However, on certain large Federal procurements, a joint venture comprised of only small businesses would qualify as a small business joint venture. This is limited to procurements that exceed $10 million in value that are classified with an NAICS industry having an employee-based size standard, or that exceeds one-half of the size standard for procurements classified with an NAICS industry having a revenue-based size standard. - SBA Loans, Financing Programs: Small Business Administration

Definition Lease
Definition Lease, A contract between the owner (lessor) and the tenant (lessee) stating the conditions under which the tenant may occupy or use real estate or equipment. Terms usually include a specific period of time and a predetermined rate. Title remains with the lessor. At no time does the lessee build equity in the property. - SBA Loans, Financing Programs: Small Business Administration

Definition Lease Rate
Definition Lease Rate, The period rental payment made by lessee to a lesser for the use of assets. It may also be considered as the implicit interest rate in minimum lease payments. - SBA Loans, Financing Programs: Small Business Administration

Definition Lessee
Definition Lessee, A tenant under a lease who uses equipment or property being leased. The lessee is required to make payments and to meet other obligations specified in the lease agreement. - SBA Loans, Financing Programs: Small Business Administration

Definition Lessor
Definition Lessor, The party to a lease agreement who has legal or tax title to equipment or property, who grants the lessee the right to use the equipment or property for the lease term, and who is entitled to the rental fees. - SBA Loans, Financing Programs: Small Business Administration

Definition Liability
Definition Liability, Debt owed by the company such as bank loans or accounts payable. Current liabilities are debts payable within twelve months. Long-term liabilities are debts payable over a period of more than twelve months. - SBA Loans, Financing Programs: Small Business Administration

Definition Lien
Definition Lien, Legal claim by one party against the property of another as security for a debt. If the debt is not repaid as promised, the lender or the lien holder can enforce his/her claim on the property and compel the sale of the property to pay off the debt. A mortgage or a first trust deed is a lien. - SBA Loans, Financing Programs: Small Business Administration

Definition Lines of Credit
Definition Lines of Credit, An agreement by a bank or financial institution to extend credit up to a specific amount for a certain period of time to a specified borrower. Usually it is a short-term loan, less than one year. - SBA Loans, Financing Programs: Small Business Administration

Definition Liquid assets
Definition Liquid assets, Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and accounts, money-market accounts, and most certificates of deposit. - SBA Loans, Financing Programs: Small Business Administration

Definition Liquidation
Definition Liquidation, The process of dissolving a business by selling the assets, paying the debts, and distributing the remaining equity to the owners. A liquidator is appointed, who arranges to sell off all the assets of the company and uses the proceeds to pay its creditors. Once the creditors have been paid then the preferential shareholders are paid, and then finally the ordinary shareholders. - SBA Loans, Financing Programs: Small Business Administration

Definition Loan Prequalification
Definition Loan Prequalification, Loan prequalification involves analyzing and sanctioning loan applications amounting less than $250,000 by SBA before these applications are taken to lenders for consideration. The applicant’s character, credit, experience and reliability is taken into consideration rather than assets before granting the loan. An SBA-designated intermediary review and loan application which is based on key financial ratios, credit and business history, and the loan-request terms. - SBA Loans, Financing Programs: Small Business Administration

Definition Market Value
Definition Market Value, The value observed in the market place, whereby buyers and sellers negotiate mutually acceptable price for the asset. Market value may be different from the price a property could actually be sold for at a given time. - SBA Loans, Financing Programs: Small Business Administration

Definition Maturity
Definition Maturity, The date on which the principal or nominal value of a bond becomes due and payable in full to the holder. - SBA Loans, Financing Programs: Small Business Administration

Definition Microloan
Definition Microloan, 7(m) )oan Program - Under this program SBA Provides short-term loans to small businesses and not-for-profit child-care centers.Maximum limit for the Loan under this program is $35000.The proceeds are used by firms for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment and cannot be used to pay existing debts or to purchase real estate. The loan is paid by SBA or by an intermediary on the guarantee of SBA. - SBA Loans, Financing Programs: Small Business Administration

Definition Mortgage
Definition Mortgage, A legal instrument in which property serves as security for the repayment of a loan. The lender holds the lien as security for the money borrowed. The amount of mortgage is usually the purchase price of the home minus down payment. - SBA Loans, Financing Programs: Small Business Administration

Definition Not Dominant
Definition Not Dominant, A concern which does not exercise a controlling or major influence on an industry in its field of operation called a non dominant concern. SBA investigates if a concern at or below a particular standard would be dominant in the industry on a national basis, as a part of its review of a size standard. In case a concern is found to be at or below the size standard is presumed not to be dominant in its field of operation. - SBA Loans, Financing Programs: Small Business Administration

Definition Offshore Banking
Definition Offshore Banking, Refers to banking operations transacted outside the country in question. Entities typically utilize offshore banking facilities to escape more restrictive domestic banking operations, rules, taxes, and regulations in force. - SBA Loans, Financing Programs: Small Business Administration

Definition Prime Rate
Definition Prime Rate, The interest rate commercial banks charge their most creditworthy customers. The rate is determined by general trends in interest rates.Changes in the prime rate influence changes in other rates, including mortgage interest rates. - SBA Loans, Financing Programs: Small Business Administration

Definition Receivable Period
Definition Receivable Period, It is time between the sale of the final product on credit and cash receipts for the accounts payable. - SBA Loans, Financing Programs: Small Business Administration

Definition Return On Investment
Definition Return On Investment, It is measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. More generally, the income that an investment provides in a year. - SBA Loans, Financing Programs: Small Business Administration

Definition Revolving Credit Lines
Definition Revolving Credit Lines, An agreement by a bank to lend a specific amount to a borrower, and to allow that amount to be borrowed again once it has been repaid. It is also called revolving credit. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA
Definition SBA, Small Business Administration An independent agency of the federal government and not to be confused with Small Business Association or variations thereof. The U.S. Small Business Administration (SBA) was created by Congress in 1953 to help America's entrepreneurs form successful small enterprises. Today, SBA's program offices in every state offer financing, training and advocacy for small firms. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Cap lines
Definition SBA Cap lines, CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan, Except the Small Asset-Based Line, can be for any dollar amount that does not exceed SBA's limit. CAPLines funds can be used as needed throughout the term of the loan to purchase assets, as long as sufficient time is allowed to convert the assets into cash at maturity. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Export Working Capital Program
Definition SBA Export Working Capital Program, The Export Working Capital Program (EWCP) is designed to provide short-term working capital to exporters. The SBA's Export Working Capital Program (EWCP) supports export financing to small businesses when that financing is not otherwise available on reasonable terms. The program encourages lenders to offer export working capital loans by guaranteeing repayment of up to $1.5 million or 90 percent of a loan amount, whichever is less. A loan can support a single transaction or multiple sales on a revolving basis. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA International Loan Program
Definition SBA International Loan Program, This loan program is designed for firms , which are preparing to engage in or is already engaged in international trade, or is adversely affected by competition from imports. The applicant must establish that the loan will significantly expand or develop an export market, is currently adversely affected by import competition, will upgrade equipment or facilities to improve competitive position, or must be able to provide a business plan that reasonably projects export sales sufficient to cover the loan. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Loan
Definition SBA Loan, The SBA enables its lending partners to provide financing to small businesses when funding is otherwise unavailable on reasonable terms by guaranteeing major portions of loans made to small businesses. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA low Doc
Definition SBA low Doc, It streamlines the making of small business loans. The maximum loan-$150,000. Calls for a response from the SBA within 36 hours of receiving a complete application. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Micro Loan
Definition SBA Micro Loan, The Micro Loan Program of SBA provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries), which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $10,500. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Regular 7a Program
Definition SBA Regular 7a Program, These programs are designed for start-ups or existing businesses. SBA generally requires that the owner(s) inject 1/5 to 1/3 of the total funds needed to launch a new business. Maturities up to 25 years based on life of assets financed. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Section 504
Definition SBA Section 504, The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as real estate,machinery, land and buildings. A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. - SBA Loans, Financing Programs: Small Business Administration

Definition SBA Section 7a
Definition SBA Section 7a, This act of SBA covers the most basic and most used type loan of SBA's business loan programs. Section 7(a) of the Small Business Act, authorizes the Agency to provide business loans to American small businesses. All 7(a) loans are provided by lenders who are called participants because they participate with SBA in the 7(a) program. Not all lenders choose to participate, but most American banks do. - SBA Loans, Financing Programs: Small Business Administration

Definition SDB Program
Definition SDB Program, SDB certification strictly pertains to benefits in federal procurement to the socially and economically disadvantaged firms which come under 8(a) program of SBA. 8(a) firms automatically qualify for SDB certification. SBA authorize SDBs to make them eligible for special bidding benefits. - SBA Loans, Financing Programs: Small Business Administration

Definition Secured Loans
Definition Secured Loans, Secured loans are loans that are secured against one or many of your assets e.g. your home. Secured loans offer solutions that many other loans don’t offer, like long repayment terms. Secured loans are secured against your assets, which will be at risk if you cannot meet your repayments. - SBA Loans, Financing Programs: Small Business Administration

Definition Senior Debt
Definition Senior Debt, Debt whose terms in the event of default require it to be repaid before subordinated debt receives any payment. A subordination of security interest in property allows another creditor to have the rights to the proceeds of the sale of that property before the claim of the subordinated creditor. - SBA Loans, Financing Programs: Small Business Administration

Definition Set Aside Contract
Definition Set Aside Contract, It is a Federal contract under which only small businesses are allowed to bid. - SBA Loans, Financing Programs: Small Business Administration

Definition Short Term Commercial Loans
Definition Short Term Commercial Loans, A loan from a commercial bank to a business. The terms of the loan vary depending on the economy, the ability of the business to repay the loan and past business dealings between the business and the bank. - SBA Loans, Financing Programs: Small Business Administration

Definition Short term fnancing
Definition Short term fnancing, Small businesses sometimes require short-term financing in the form of a bridge loan to finance growth / inventory. - SBA Loans, Financing Programs: Small Business Administration

Definition Small Business
Definition Small Business, A business smaller than a given size as measured by its employment, business receipts, or business assets. - SBA Loans, Financing Programs: Small Business Administration

Definition Small Business Investment Act
Definition Small Business Investment Act, (SBIC) Small Business investment act: SBIC licensed by the Small Business Administration, are privately owned and managed investment firms. They are participants in a vital partnership between government and the private sector economy. With their own capital and with funds borrowed at favorable rates through the Federal Government, SBICs provide venture capital to small independent businesses, both new and already established. - SBA Loans, Financing Programs: Small Business Administration

Definition Solvency
Definition Solvency, A company's long run ability to meet all financial obligations. A solvent business has a positive net worth. An insolvent business has a zero net worth and questionable viability. Solvency indicators include the debt-to-asset ratio, debt-to-equity ratio and the equity-to-asset ratio. - SBA Loans, Financing Programs: Small Business Administration

Definition Subordinated Debt
Definition Subordinated Debt, Debt that is repayable only after other debts have been repaid. A subordination of security interest in property allows another creditor to have the rights to the proceeds of the sale of that property before the claim of the subordinated creditor. - SBA Loans, Financing Programs: Small Business Administration

Definition Surety Bond
Definition Surety Bond, A written agreement providing for monetary compensation to be paid by the Surety should there be a failure by the person bonded to perform specified acts within a stated period. In the real estate business a surety bond is generally used to ensure that a particular project will be completed at a certain date or that a contract will be per formed as stated. - SBA Loans, Financing Programs: Small Business Administration

Definition Term Loans
Definition Term Loans, A loan for a specified amount for a fixed period of time and often with a fixed periodic repayment. Term Loans are the counter parts of Fixed Deposits in the Bank. Banks lend money in this mode when the repayment is sought to be made in fixed, pre-determined installments. - SBA Loans, Financing Programs: Small Business Administration

Definition True Lease
Definition True Lease, A type of transaction that qualifies as a lease under the Internal Revenue Code. Under this lease lessor grants to the lessee the right to use the lessor’s property for a stated period of time. At the end of the lease period, the property is returned to the lessor. - SBA Loans, Financing Programs: Small Business Administration

Definition Unsecured loan
Definition Unsecured loan, Unsecured loan is a loan where the borrower is not required to put up any collateral.In an unsecured loan, the creditor does not have the right to take anything because borrower has not used anything of value that belongs to him to help him get the loan. - SBA Loans, Financing Programs: Small Business Administration

Definition Vendor Identification Program
Definition Vendor Identification Program, The Vendor Identification Program (VIP) assists small businesses by identifying government purchasers for the items they produce for large defense contractors. The program helps SBA to increase competition by adding qualified sources to bidder lists and creating prime contracting opportunities for small businesses. of small businesses as prime. - SBA Loans, Financing Programs: Small Business Administration

Definition Venture Capital
Definition Venture Capital, Financing for new businesses. Start-up companies that receive venture capital are perceived to have excellent growth prospects but don't have access to capital markets because they are private companies. In return for venture capital, investors may receive a say in the company's management, as well as some combination of profits, preferred shares or royalties. - SBA Loans, Financing Programs: Small Business Administration

Definition Women Business Center
Definition Women Business Center, Women’s business center (WBC) of SBA provides assistance and/or training in finance, management, marketing, procurement and the Internet, as well addressing specialized topics such as home-based businesses, corporate executive downsizing and welfare-to-work. - SBA Loans, Financing Programs: Small Business Administration

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Definition: SBA Loan Terms - Small business loans online

Small Business Loans / Terms and Definitions. Minority & Women Owned Business Finance Programs

Start up companies in every industry are always seeking capital to open or expand their company. This is a challenge as many of these entrepreneurs have no prior business experience or credit and have been turned down by typical bank programs. There are also small business programs designed for minority and woman-owned businesses and startups.

When your bank says no - Go find another business bank -

Section 7(a) of the Small Business Act, authorizes the Agency to provide business loans to American small businesses. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.
These programs are designed for start-ups or existing businesses. SBA generally requires that the owner(s) inject 1/5 to 1/3 of the total funds needed to launch a new business. Maturities up to 25 years based on life of assets financed.

SBA Loan Glossary - Definitions for Entrepreneurs of Minority and Woman Owned Business Opportunities - ©2004 HJ Ventures International, Inc.