Business Finance Glossary
Plain-English definitions of the most important business finance terms.
Glossary Terms
APR (Annual Percentage Rate)
What it means and how to use it
DSCR (Debt Service Coverage Ratio)
The key metric for commercial lending
Factor Rate
How merchant cash advance costs are quoted
Finance Lease
Off-balance-sheet asset funding explained
First Charge
Priority security interest on a property
Hire Purchase
Own the asset at the end of the term
Invoice Discounting
Confidential borrowing against your invoices
Invoice Factoring
Sell invoices and outsource credit control
LTV (Loan to Value)
How lenders measure security risk
Operating Lease
Flexible asset rental with no ownership
Personal Guarantee
When you become personally liable
Second Charge
Subordinate security behind a first charge