Business Finance Terms, Explained Simply.
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The working capital ratio, also called the current ratio, divides current assets by current liabilities to show whether the business....
A working capital facility is a credit arrangement specifically structured to fund the short-term operational cycle of a business, bridging....
A term loan advances a fixed amount repaid on a set schedule; revolving credit provides a limit that can be....
Subordinated debt sits behind senior debt in the repayment hierarchy, meaning in a default or insolvency, senior lenders are repaid....
Solvency is the ability of a business to meet its financial obligations as they fall due, the threshold between a....
Security is the legal claim a lender takes over specific assets to protect its position if the borrower defaults; collateral....
Refinancing is replacing an existing loan with a new one, typically to access better terms, extend the repayment period, consolidate....
The PPSA is provincial legislation that governs how security interests in personal property, equipment, receivables, and inventory are created, registered,....
A personal guarantee is a commitment by a business owner to repay a corporate debt personally if the business cannot,....
An operating line of credit is a revolving facility that allows a business to borrow up to a set limit,....
These are three levels of accountant engagement for financial statements, each offering progressively more assurance to external users and required....
Mezzanine financing sits between senior debt and equity in a company’s capital structure, offering more capital than a bank will....