A
AER (annual equivalent rate)AER (annual equivalent rate) shows what you would earn on savings in…APRAPR (annual percentage rate) is the total yearly cost of borrowing —…APR (business borrowing)APR expresses the yearly cost of borrowing — interest plus certain…APR capAn APR cap is a ceiling on the total cost of certain credit — a…APR vs EARAPR includes fees and suits comparing loans; EAR focuses on…Acceleration (loan)Acceleration is a lender demanding the whole balance at once after a…Accounting periodAn accounting period is the span a company's accounts cover — usually…Accounting reference dateThe accounting reference date is a company's official year end — the…Accounts payableAccounts payable is what you owe suppliers for credit purchases — a…Accounts receivableAccounts receivable is what customers owe you for credit sales — a…AccrualAn accrual records an expense incurred or income earned before any…Accrual accounting (interest)Accrual accounting records interest in the period it relates to,…Accruals basisThe accruals basis records income when earned and costs when…Accruals basisThe accruals basis records income and expenses when they're earned or…Accruals: What They Are and Why They Matter for Your Company AccountsAn accrual is an accounting entry that records a cost or income in…Accrued incomeAccrued income is revenue earned but not yet billed — recognised as…Accrued incomeAccrued income is money you've earned but not yet invoiced or been…Accrued interestAccrued interest is interest that has built up over time but has not…Accrued vs cash interestAccrued vs cash interest distinguishes interest recognised in the…Acid-test ratioThe acid-test (quick) ratio measures whether you could pay short-term…AdministrationAdministration puts an insolvent company under a licensed…Advance rateThe advance rate is how much of an asset's value a lender will lend…Affordability (lending)A lender's assessment of whether a business can comfortably repay a…Aged creditorsAged creditors is the mirror of aged debtors — the report showing…Aged debtorsA breakdown of the money owed to a business by how long each invoice…Aged debtorsAged debtors is the report that groups the money customers owe you by…Ageing scheduleAn ageing schedule (or aged debtor/creditor report) groups…All-in rateThe all-in rate is everything you pay expressed as one rate —…Allowable expensesAllowable expenses are genuine business costs incurred wholly and…Allowance for doubtful accountsAn allowance for doubtful accounts (bad-debt provision) sets aside an…AmortisationAmortisation is the process of repaying a loan in regular instalments…AmortisationAmortisation spreads the cost of an intangible asset — software,…Amortisation of intangiblesAmortisation spreads the cost of intangibles — goodwill, software,…Amortisation scheduleAn amortisation schedule is the table breaking every repayment into…Annual Investment Allowance (AIA)The Annual Investment Allowance (AIA) gives most businesses 100%…Annual accountsAnnual accounts (statutory accounts) are the formal, once-a-year…Annual investment allowanceThe annual investment allowance (AIA) lets a company write off the…Annualised costAnnualised cost scales a short-term borrowing cost up to a yearly…Annuity (loan repayment)An annuity repayment is a loan repaid in equal, regular instalments,…Arrangement feeAn arrangement fee is an upfront charge some lenders add for setting…Arrangement feeAn arrangement fee is a one-off charge a lender makes for setting up…Arrangement fee and the APRAn arrangement fee feeds into the APR — because APR bundles…ArrearsArrears are payments that are overdue — money your business owes that…ArrearsPayments that are overdue and unpaid — a sign of financial strain…Arrears in Business Lending: Meaning and ManagementArrears arise when scheduled loan payments are not made by their due…Asset financeAsset finance lets a business acquire equipment, vehicles or…Asset finance (defined)Asset finance funds a specific item — equipment, vehicles, machinery…Asset-based lending (ABL)Asset-based lending is revolving finance secured against a pool of…Audit trailAn audit trail is the documented path from a figure in your accounts…
B
BACS paymentA BACS payment is a standard UK bank-to-bank transfer used for Direct…Back-to-back loanA back-to-back loan is secured by a matching deposit you place with…BacsBacs is the UK system for bulk electronic payments — direct debits…Bad Debt: Write-Offs, Provisions and the Impact on Company AccountsBad debt is money owed to a business that is unlikely ever to be…Bad debtBad debt is money owed to your business that you no longer expect to…Balance sheetA balance sheet is a snapshot of what your business owns and owes at…Balance sheetA snapshot of what a company owns and owes at a point in time —…Balancing chargeA balancing charge claws back excess capital allowances when you sell…Balloon paymentA balloon payment is a large lump sum due at the end of a finance…Balloon paymentA balloon payment is a large lump sum due at the end of a finance…Bank covenantA bank covenant is a condition in a loan you must keep meeting — a…Bank of England base rateThe Bank of England base rate is the official interest rate set by…Bank reconciliationA bank reconciliation is the process of matching a business's own…Bank reconciliationBank reconciliation is the routine of matching your accounting…Base rateBase rate is the headline interest rate set by the Bank of England,…Base rate (Bank of England)The Bank of England's benchmark interest rate, which influences the…Basis pointA basis point is one hundredth of one percent (0.01%) — the precise…Benefit in kindA benefit in kind is a non-cash perk — a company car, private medical…Bill of exchangeA bill of exchange is a written, binding order to pay a set sum on a…Blended rateA blended rate is the single combined rate across borrowing made up…Blocked input VATBlocked input VAT is VAT you cannot reclaim despite paying it —…Book valueBook value is what the accounts say something is worth — an asset's…Bounce Back LoanBounce Back Loans were government-backed pandemic loans for small…Break-even pointThe break-even point is the sales level where revenue exactly covers…Break-even pointThe break-even point is the sales level where revenue exactly covers…Break-even pointThe break-even point is the sales level where revenue exactly covers…Breakage costA breakage cost is a charge for exiting a fixed-rate loan early,…Bridging finance (business)Bridging finance is short-term borrowing that spans a temporary gap —…Bridging finance (defined)Bridging finance is a fast, short-term, usually property-secured loan…Bridging loanA bridging loan is short-term finance used to cover a gap until a…Bullet Repayment — Business Finance GlossaryA bullet repayment is the full return of principal in a single lump…Bullet loanA bullet loan is one where you pay only interest during the term and…Bullet repaymentA loan structure where the whole principal is repaid in one lump sum…Burn rateBurn rate is the pace at which a business consumes cash, usually…Burn rateBurn rate is the speed at which a company spends through its cash…Business credit ratingA business credit rating is a score, set by credit reference…Business credit scoreA rating held on a limited company by credit reference agencies,…Business equity releaseBusiness equity release raises cash against the value locked in your…
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CHAPSCHAPS is the UK system for same-day, high-value or time-critical…Capex vs opexCapex is money spent acquiring or improving long-term assets; opex is…CapitalCapital is the money, funding and valuable assets a business holds…Capital Expenditure (CapEx): What It Means and How It Flows Through Your AccountsCapital expenditure is money spent on acquiring or improving…Capital allowanceCapital allowances are the tax version of depreciation — the…Capital allowancesCapital allowances are the tax relief you claim on qualifying capital…Capital and interestCapital and interest are the two components of a loan repayment: the…Capital employedCapital employed is the total long-term funding in a business —…Capital employedCapital employed is the total money a company has tied up in running…Capital gainsCapital gains are the profit on selling an asset above its cost —…Capital reductionA capital reduction is a formal, court- or solvency-statement-backed…Capital repayment holidayA capital repayment holiday is an agreed pause on repaying the…Capital vs revenue expenditureCapital expenditure buys long-term assets spread over time; revenue…CapitalisationCapitalisation means recording a cost as an asset instead of an…Capitalised arrangement feeA capitalised arrangement fee is added to the loan balance rather…Carrying valueCarrying value (or book value) is what an asset is shown as worth in…Cash basisThe cash basis records income and costs when money actually moves —…Cash bufferA cash buffer is a reserve of cash a business keeps in hand to absorb…Cash conversion cycleThe cash conversion cycle (CCC) is the number of days between paying…Cash conversion cycleThe cash conversion cycle measures the days between a company paying…Cash conversion cycle (in days)The cash conversion cycle counts the days between paying for stock…Cash flowCash flow is the movement of money into and out of your business over…Cash flow forecastA cash flow forecast projects the money expected to flow in and out…Cash flow forecastA cash flow forecast projects the money moving in and out of your…Cash flow forecastA cash flow forecast projects money in and out over coming weeks and…Cash flow statementA cash flow statement is one of the three main financial statements,…Cash inflowA cash inflow is any movement of money into a business — customer…Cash outflowA cash outflow is any movement of money out of a business — supplier…Cash positionA business's cash position is the amount of cash and readily…Cash ratioThe cash ratio is the strictest liquidity measure: cash and cash…Cash reserveA cash reserve is money you keep aside on purpose — the buffer that…Cash runwayCash runway is how many months a business can keep operating at its…CashbookA cashbook is the accounting record of all money received and paid…Charge registrationCharge registration is the recording of a lender's security at…Charge registrationCharge registration is filing a lender's security at Companies House…Chargeable gainA chargeable gain is the taxable profit when a company sells an asset…Chart of accountsA chart of accounts is the master index of every account your…Chattel mortgageA chattel mortgage is a loan secured on a movable asset you own…Class 1A National InsuranceClass 1A National Insurance is the employer's NI on taxable benefits…CleardownA cleardown is a requirement that a business bring a revolving…Close companyA close company is one controlled by five or fewer shareholders (or…Collar (interest rate collar)A collar combines a cap and a floor to keep a variable rate inside a…CollateralCollateral is an asset a borrower pledges to a lender as security for…Commitment feeA commitment fee pays a lender for agreeing to hold funds available…Committed facilityA committed facility is credit the lender is legally bound to provide…Company credit checkA lender's review of a limited company's own credit file and score —…Company reservesCompany reserves are the accumulated profits a company holds —…Company voluntary arrangement (CVA)A CVA is a binding deal with creditors to repay debts over time…Compound interestCompound interest is charged on the principal and on previously…Compounding frequencyCompounding frequency is how often accrued interest is added to the…Concentration limitA concentration limit in invoice finance caps how much of your funded…Confidential invoice discountingConfidential invoice discounting is invoice discounting arranged so…Confirmation statementA confirmation statement is the annual Companies House filing…Confirmation statementA confirmation statement (formerly the annual return) confirms your…ConsiderationConsideration is what each side gives to make a contract binding —…Consolidated accountsConsolidated accounts combine a parent and its subsidiaries into one…Contingent liabilityA contingent liability is a possible future obligation that depends…Contingent liabilityA contingent liability is a possible future obligation that hinges on…Contribution marginContribution margin is what's left from a sale after its variable…Contribution marginContribution margin is what each sale contributes towards fixed costs…Contribution marginContribution margin is what's left from a sale once you take off the…Convertible loan noteA convertible loan note (CLN) is debt that can turn into equity later…Corporation tax return (CT600)The corporation tax return (CT600) is the form your limited company…Cost of capitalCost of capital is the blended rate a business effectively pays to…Cost of capital (defined)Cost of capital is the price a business pays for the money it uses —…Cost of fundsCost of funds is what it costs the lender to raise the money it lends…Cost of goods sold (COGS)Cost of goods sold (COGS) is the direct cost of the products or…Cost of goods sold vs operating expensesCOGS vs opex: cost of goods sold is the direct cost of each sale;…Cost of salesCost of sales is the direct cost of what you actually sold —…County Court Judgment (CCJ)A County Court Judgment — a court ruling that a company owes an…County court judgment (CCJ)A county court judgment (CCJ) is a court order to pay a debt, issued…CovenantA covenant is a promise or condition written into a loan agreement…Covenant (Loan)A loan covenant is a contractual obligation embedded in a facility…Covenant breachA covenant breach is failing to meet a condition in your loan…Credit controlCredit control is the discipline of deciding who you extend credit…Credit facilityA credit facility is an arrangement that lets a business borrow up to…Credit insuranceCredit insurance pays out if a customer goes bust or defaults,…Credit limitA credit limit is the maximum amount a company can borrow on a…Credit margin (loan margin)Credit margin is the fixed spread a lender adds above the reference…Credit noteA credit note reverses all or part of an invoice — the accounting…Credit reference agencyAn organisation that collects data on companies and produces the…Credit utilisationCredit utilisation is the proportion of your available credit that…Creditor daysCreditor days measure how long, on average, you take to pay suppliers…Creditor daysCreditor days measure the average time your business takes to pay…Creditor days (DPO)Creditor days, or days payable outstanding (DPO), is the average…CreditworthinessCreditworthiness is a measure of how likely a business is to repay…Cross-Default — Business Finance GlossaryA cross-default clause provides that a default under any other…Crystallisation (floating charge)Crystallisation is the moment a floating charge stops hovering and…Current Ratio: Formula, What It Shows, and Healthy Benchmarks for UK CompaniesThe current ratio divides current assets by current liabilities to…Current assetsCurrent assets are the things a business owns that it expects to…Current liabilitiesCurrent liabilities are the amounts a business owes and must pay…Current ratioCurrent ratio measures whether a company's short-term assets are…Current ratioThe current ratio divides what a company owns in the short term by…
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Daily interest accrualDaily interest accrual means interest is worked out on the balance…Day-count conventionDay-count convention is the rule a lender uses to count days in an…Day-one fundingDay-one funding is the cash a facility releases the moment it…Days inventory outstanding (DIO)Days inventory outstanding (DIO), or stock days, is the average…Days payable outstanding (DPO)Days payable outstanding (DPO) is the average number of days a…Days sales outstanding (DSO)Days sales outstanding (DSO) is the average number of days a business…DebentureA debenture is a legal document that secures a loan against a…Debenture (as security)A debenture is the document by which a company grants a lender…Debit noteA debit note flags that an amount is owed — a buyer uses it to…Debt Restructuring: Business Options in the UKDebt restructuring is the process of renegotiating the terms of…Debt collection agencyA debt collection agency chases overdue debts for a creditor (or buys…Debt consolidationReplacing several business debts with a single new facility, to…Debt restructuringRenegotiating the terms of existing borrowing — the amount, rate or…Debt service coverage ratioThe debt service coverage ratio (DSCR) measures whether a business…Debt vs equity (defined)Debt is money you borrow and repay with interest, keeping full…Debt-to-equity ratioDebt-to-equity ratio compares how much a company has borrowed with…Debtor Days: Formula, What It Measures, and How to Improve Collection SpeedDebtor days — also called days sales outstanding — measures the…Debtor daysDebtor days measure how long, on average, customers take to pay you —…Debtor daysDebtor days measure the average time your customers take to pay — the…Debtor days (DSO)Debtor days, or days sales outstanding (DSO), is the average number…Deducted (discounted) interest advanceDeducted interest means fees or interest are taken from the advance…Deed of priorityA deed of priority is a contract between lenders that fixes who ranks…DefaultDefault is when a borrower fails to meet the terms of a loan — most…Default (loan)A formal breach of a loan agreement — usually through missed payments…Default chargeA fee a lender applies when a borrower misses a scheduled payment,…Default in Business Lending: Triggers and ConsequencesDefault occurs when a borrower breaches a material term of a loan…Default interestDefault interest is a higher rate a lender can apply once you breach…Defensive interval ratioThe defensive interval ratio estimates how many days a business could…Deferred considerationDeferred consideration is part of a sale price paid after the deal…Deferred considerationDeferred consideration is part of a sale price paid later, often tied…Deferred incomeDeferred income is cash received before it is earned — held as a…Deferred incomeDeferred income is money you've been paid for work not yet done —…Deferred taxDeferred tax recognises tax that will arise later from timing…Demand facilityA demand facility can be recalled by the lender at any time, in full…DepositA deposit is a payment taken before work begins, funding the initial…DepreciationThe accounting method of spreading an asset's cost over its useful…Depreciation scheduleA depreciation schedule spreads the cost of a fixed asset across its…Depreciation vs capital allowancesDepreciation vs capital allowances: depreciation writes off assets in…Depreciation: Methods, Accounting Treatment, and the Difference from Capital AllowancesDepreciation is the systematic allocation of a fixed asset's cost…Dilapidations provisionA dilapidations provision sets aside the future cost of returning a…Direct debitA direct debit is an instruction that lets a business collect…Director remunerationDirector remuneration is the whole package a director takes from the…Director's current accountA director's current account is another name for the director's loan…Director's loan accountThe record of money owed between a director and their company — money…Director's loan accountA director's loan account records money moving between a director and…Directors' disqualificationDirectors' disqualification bars a person from running or managing a…Directors' fiduciary dutyDirectors' fiduciary duty is the legal obligation to act honestly, in…Directors' remunerationDirectors' remuneration is the total reward directors take — salary,…Disallowable expensesDisallowable expenses are real costs in the accounts that the taxman…Disapproved invoiceA disapproved invoice is one an invoice financier declines to advance…Discount chargeThe discount charge in invoice finance is the interest-like cost of…Discounted rateA discounted rate is a temporary reduction off the lender’s standard…Distributable reservesDistributable reserves are the accumulated post-tax profits a company…Distributable reservesDistributable reserves are the accumulated realised profits a company…DividendA dividend is profit paid out to shareholders — legal only from…Dividend allowanceThe dividend allowance is the tax-free slice of dividend income each…Dividend coverDividend cover shows how many times a company's after-tax profit…Dividend coverDividend cover shows how many times profit could pay the dividend — a…Dividend taxDividend tax is the personal income tax on dividends above the…Dividend voucherA dividend voucher records each dividend paid — the evidence that it…Double-entry bookkeepingDouble-entry bookkeeping records every transaction twice — a debit…Doubtful debtA doubtful debt is an amount owed to a business that may not be paid…DrawdownDrawdown is the act of taking money from a loan or credit facility…DrawdownDrawdown is the act of actually taking the money from a facility…Drawdown and interestDrawdown is taking money from an agreed facility — and interest…Drawdown — Business Finance GlossaryA drawdown is the formal act of requesting and receiving funds under…Due Diligence in Business Lending and AcquisitionsDue diligence is the structured process of verifying financial,…Due diligenceDue diligence is the structured investigation a lender, investor or…
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EBIT (operating profit)Earnings before interest and tax — a measure of operating profit…EBITDAEBITDA (earnings before interest, tax, depreciation and amortisation)…EBITDAEBITDA strips out interest, tax, depreciation and amortisation to…Early payment discountAn early payment discount is a small reduction a supplier gives for…Early repayment chargeAn early repayment charge (ERC) is a fee some lenders apply when you…Early settlement chargeA fee some lenders apply when a loan is repaid before the end of its…Early settlement discountAn early settlement discount (or prompt-payment discount) is a small…Early settlement figureAn early settlement figure is the exact amount to clear a loan before…Early warning indicatorAn early warning indicator is a metric that flags trouble before it…Earn-outAn earn-out ties part of a business's sale price to how it performs…Effective annual rate (EAR)Effective annual rate (EAR) is the real yearly cost of a facility…Effective cost of a feeThe effective cost of a fee is how a one-off charge translates into…Effective interest rateThe effective interest rate spreads all the interest and fees of a…Employer's National InsuranceEmployer's National Insurance is the contribution a company pays on…End-of-month termsEnd-of-month terms (EOM) set the payment due date relative to the end…Enterprise valueEnterprise value (EV) is the whole-business price — equity plus net…EquityEquity is the owners' residual stake in a business: the value of its…Equity injectionAn equity injection is fresh owner or investor money put in for…Escrow accountAn escrow account holds money with a neutral third party until both…Event of defaultAn event of default is any breach that lets a lender call in the loan…Evergreen loanAn evergreen loan is a facility with no fixed final repayment date…Exempt agreementAn exempt agreement is a credit agreement that falls outside the…Exempt supplyAn exempt supply carries no VAT and blocks reclaim of related input…Exit feeAn exit fee is a charge for closing or fully repaying a facility —…Expansion capitalExpansion capital is funding an established business uses to grow —…
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FacilityA facility is a formal arrangement under which a lender makes a…Facility Fee — Business Finance GlossaryA facility fee is a periodic charge levied on the total committed…Facility feeA charge for putting a credit facility in place or keeping it…Factor RateA factor rate is a simple multiplier applied to a business advance to…Factor rateA factor rate is a fixed multiple — typically between 1.1 and 1.5 —…Factor rate (defined)A factor rate is a simple multiplier — such as 1.2 — used to price…FactoringFactoring is a form of invoice finance in which a business sells its…FactoringFactoring is invoice finance where you sell your unpaid invoices to a…Fair valueFair value is what an asset would fetch in an orderly sale between…Faster PaymentsFaster Payments is the UK electronic payment system that moves money…Finance leaseA finance lease lets a company use an asset for most of its useful…Finance leaseA finance lease transfers the risks and rewards of ownership to you —…Financial Covenants in UK Business Loan AgreementsFinancial covenants are contractual ratios or thresholds in a loan…Financial covenantA financial covenant is a promise in your loan agreement to keep…Financial yearA financial year is the twelve months a company's accounts cover,…Financial year endThe financial year end is the date your accounting period closes — it…First chargeA first charge is the top-ranking claim over an asset — that lender…Fixed Charge: Asset Security in UK Business LendingA fixed charge is a security interest attached to a specific…Fixed Costs: Definition, Examples, and Why the Fixed/Variable Split MattersFixed costs are business expenses that remain constant in total…Fixed and floating chargeA fixed and floating charge secures a lender over both your specific…Fixed assetA fixed asset is a long-term asset you use to run the business —…Fixed chargeA fixed charge is security a lender takes over a specific,…Fixed charge cover ratioA measure of how comfortably a company's earnings cover its fixed…Fixed costsFixed costs are the bills you pay regardless of sales — rent,…Fixed costsFixed costs are the bills that stay roughly the same whether you sell…Fixed rateAn interest rate that stays the same for the life of a loan, giving…Fixed vs variable costsFixed costs stay broadly the same whatever you produce; variable…Fixed-rate periodA fixed-rate period is the stretch during which your rate is locked…Flat rateA flat rate charges interest on the original loan amount for the…Flat rate percentageThe flat rate percentage is the fixed rate applied to turnover under…Flat-rate VAT schemeThe flat-rate VAT scheme lets eligible small businesses pay VAT as a…Flat-rate interestInterest charged on the original amount borrowed for the entire term,…Float (cash)In cash-flow terms, float is the small amount of ready cash a…Floating Charge: Security Interest in UK Business LendingA floating charge is a form of security over a class of assets that…Floating chargeA floating charge is security a lender takes over a changing pool of…Floating chargeSecurity over a changing pool of company assets — such as stock and…Floating chargeA floating charge is security over a shifting set of assets — stock,…Forbearance planA forbearance plan is a temporary easing of terms — a payment…Foreign exchange riskForeign exchange (FX) risk is the danger that currency swings erode…Free cash flowThe cash a business generates after operating costs and essential…Free cash flowFree cash flow is the cash left after a business has paid its…Front-loaded interestFront-loaded interest describes how most interest is paid in a loan’s…Funding gapA funding gap is the hole between the cash you have and the cash you…
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GearingGearing is the ratio of a business's debt to its equity, showing how…Gearing ratioThe gearing ratio measures how much of a company's funding comes from…Gearing ratioThe gearing ratio compares a company's debt with its equity — high…Going concernGoing concern is the assumption that a business will keep trading for…Going concernGoing concern is the assumption that a company will keep trading for…GoodwillGoodwill is the extra a buyer pays for a business above its…Government-guaranteed loanA government-guaranteed loan carries a state guarantee covering part…Grace periodA short window after a payment falls due during which it can be made…Grace periodA grace period is a short window — after a due date or at a loan’s…Grace periodA grace period is a window at the start of a facility, or after a…Gross marginGross margin is gross profit as a percentage of revenue — the profit…Gross marginGross margin is gross profit as a percentage of revenue — how much of…Gross marginGross margin is revenue minus the direct cost of sales, expressed as…Gross profitGross profit is revenue minus the direct cost of what you sold — the…Gross rateGross rate is the interest paid on savings before any tax is…Gross vs netGross vs net: gross is the figure before deductions, net is what is…Gross working capitalGross working capital is a business's total current assets — cash,…Group of companiesA group of companies is a parent controlling subsidiaries — able to…Group reliefGroup relief lets a loss in one company in a group offset a profit in…GuaranteeA guarantee is a legally binding promise by a third party to repay a…Guarantee releaseA guarantee release is being let off a personal guarantee — formally…Guarantee vs indemnityA guarantee is a promise to cover someone else's debt if they don't;…GuarantorA guarantor is a person or company that agrees to repay a debt if the…Guarantor and Personal Guarantees in UK Business LendingA guarantor is a person or entity that agrees to be liable for…
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Haircut (lending)A haircut is the discount a lender takes off an asset's value before…Hard search (hard credit check)A recorded credit check, visible to other lenders, left when you…Headline rateThe headline rate is the advertised, attention-grabbing rate — often…Headroom (finance)Headroom is the unused borrowing capacity a business has available —…Headroom — Business Finance GlossaryHeadroom is the margin between a borrower's actual financial…Hire purchaseHire purchase is an asset finance agreement where a business pays for…Hire purchaseHire purchase lets a company acquire an asset by paying for it in…Holding companyA holding company owns shares in one or more other companies rather…
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IlliquidIlliquid describes an asset that cannot easily or quickly be turned…ImpairmentImpairment is reducing the value of an asset in the accounts when its…ImpairmentImpairment writes an asset down when it is worth less than the books…Indemnity in Business Finance: Meaning and Key DifferencesAn indemnity is a primary, standalone obligation to hold another…Input VATInput VAT is the VAT your business pays on its purchases, which you…Input tax creditAn input tax credit is the VAT a business reclaims on purchases,…InsolvencyInsolvency is the state in which a company cannot pay its debts as…InsolvencyWhen a company cannot pay its debts as they fall due, or its…Insolvency practitionerAn insolvency practitioner (IP) is a licensed professional who runs…Insolvency: Types and Process for UK BusinessesInsolvency is the state in which a company cannot pay its debts as…InstalmentAn instalment is one of the regular scheduled payments that repay a…Intangible assetAn intangible asset is a non-physical asset with real value — a…Intercompany loanAn intercompany loan is money lent between companies in the same…Intercreditor Agreement — Business Finance GlossaryAn intercreditor agreement is the contract between two or more…Interest accrual basisThe interest accrual basis is the convention that sets how interest…Interest capitalisationInterest capitalisation adds unpaid interest to the loan principal,…Interest coverInterest cover is the ratio of a company's operating profit to its…Interest cover ratioOperating profit divided by interest payable — a measure of how…Interest cover ratioThe interest cover ratio shows how many times a company's operating…Interest coverage ratioThe interest coverage ratio shows how many times operating profit…Interest in advanceInterest in advance is charged at the start of a period rather than…Interest in arrearsInterest in arrears is charged at the end of a period, after you have…Interest rate bufferAn interest rate buffer is spare affordability headroom kept back so…Interest rate differentialAn interest rate differential is the gap between two rates, such as…Interest rate outlookThe interest rate outlook is the market and central-bank expectation…Interest rate riskInterest rate risk is the danger that rising rates lift your…Interest rate sensitivityInterest rate sensitivity measures how much your costs or…Interest rate swapAn interest rate swap exchanges a variable interest obligation for a…Interest rebateAn interest rebate is a refund of interest not yet earned when you…Interest roll-upInterest roll-up adds interest to the balance instead of collecting…Interest suspenseInterest suspense is interest a lender stops booking as income on a…Interest tax shieldThe interest tax shield is the tax saved by deducting allowable loan…Interest-free periodAn interest-free period is a spell where no interest is charged —…Interest-only conversionAn interest-only conversion temporarily switches an amortising loan…Interest-only periodAn interest-only period is a spell where repayments cover only…Interim accountsInterim accounts are mid-year financial statements — a formal…Interim dividendAn interim dividend is paid during the year, ahead of final results —…Inventory financingInventory financing lends against your stock — funding a big purchase…Invoice discountingInvoice discounting lets a business borrow against unpaid invoices to…Invoice discountingInvoice discounting is a form of invoice finance where a business…Invoice discountingInvoice discounting advances cash against your unpaid invoices while…Invoice factoringInvoice factoring is a form of invoice finance where a business sells…Invoice finance (defined)Invoice finance releases cash tied up in unpaid customer invoices,…
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LIBOR (legacy)LIBOR was the London Interbank Offered Rate, the old benchmark for…LeverageLeverage is the use of borrowed money to fund a business, amplifying…LienA lien is a legal right to retain possession of another party's…Limited liabilityThe protection incorporation gives a company's owners, capping their…Limited liability partnership (LLP)A limited liability partnership (LLP) is a partnership whose members…LiquidationLiquidation is winding a company up — realising its assets, paying…LiquidatorA liquidator is the insolvency practitioner appointed to wind up a…LiquidityLiquidity is how readily a business can convert assets into cash to…LiquidityLiquidity is how easily a business can meet its short-term…Liquidity: What It Means for a Business and How Directors Manage ItLiquidity is a measure of how readily a business can convert assets…Loan agreementA loan agreement is the contract that governs a loan — amount, rate,…Loan covenantA loan covenant is a condition you agree to keep for the life of a…Loan noteA loan note is a formal debt instrument documenting a loan's amount,…Loan-to-value (LTV)The ratio of a secured loan to the value of the asset backing it,…Loan-to-value (LTV)Loan-to-value (LTV) expresses how much you are borrowing as a…Loan-to-value and the rateLoan-to-value shapes your rate — the more of the asset’s value you…
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Management accountsManagement accounts are internal, up-to-date financial reports for…Management accountsManagement accounts are internal financial reports, prepared monthly…Management buy-inA management buy-in (MBI) is where an outside management team buys a…Management buyout (MBO)A management buyout is where the existing management team buys the…MarginMargin is the fixed percentage a lender adds on top of a reference…Margin callA margin call is a lender demanding more cash or collateral when your…Margin compressionMargin compression is when competition or market shifts squeeze the…Margin ratchetA margin ratchet automatically adjusts your margin up or down as…Marginal rate of taxThe marginal rate of tax is the rate on your next pound of profit —…Marginal reliefMarginal relief is the mechanism that gradually raises the effective…Mark to marketMark to market values an asset at today's market price rather than…Matching principleThe matching principle recognises costs in the same period as the…Material Adverse Change (MAC) — Business Finance GlossaryA material adverse change clause allows a lender to refuse drawdown…MaturityMaturity is the date on which a loan or facility reaches the end of…Merchant cash advanceA merchant cash advance is a lump sum of finance repaid automatically…Merchant cash advanceA merchant cash advance is a lump sum advanced to a business and…Merchant cash advanceA merchant cash advance hands you a lump sum repaid as a slice of…Merchant cash advance (defined)A merchant cash advance is a lump sum repaid as a fixed share of…Mezzanine Finance — Business Finance GlossaryMezzanine finance is a hybrid layer of capital that ranks below…Milestone billingMilestone billing is invoicing a customer at pre-agreed points in a…Minimum paymentA minimum payment is the least you must pay on a revolving facility…Minimum repaymentA minimum repayment is the least you must pay each period on a…Moratorium (insolvency)A moratorium is a legal pause on creditor enforcement — breathing…
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National InsuranceNational Insurance is paid by employees, employers and the…Negative amortisationNegative amortisation happens when a payment is too small to cover…Negative cash flowNegative cash flow means more money left a business than came in over…Negative pledgeA negative pledge is a loan clause stopping the borrower from…Negative pledgeA negative pledge is a promise not to give any other lender security…Net 30Net 30 is a common payment term meaning the full invoice amount is…Net MarginNet margin is the percentage of revenue that remains as profit after…Net Present Value (NPV): What It Means for Business FinanceNet present value (NPV) is a method of evaluating an investment by…Net assetsThe value of everything a company owns minus everything it owes — a…Net assetsNet assets are what a company owns minus what it owes — the book…Net book valueNet book value is an asset's cost less accumulated depreciation — the…Net book valueNet book value is what an asset is worth in your accounts — its cost…Net cash flowThe difference between all cash coming into and going out of a…Net current assetsNet current assets are current assets minus current liabilities — the…Net debtNet debt is total borrowings minus cash — the debt figure that…Net marginNet profit as a percentage of revenue — showing how much of each…Net marginNet margin is net profit as a percentage of revenue — how many pence…Net marginNet margin is the profit left at the very bottom of the accounts —…Net profitNet profit is the true bottom line — what remains after every cost,…Net working capitalNet working capital is your current assets minus your current…Net working capitalNet working capital is current assets minus current liabilities — the…Net worth covenantA loan condition requiring a company to keep its net assets above an…Net-of-tax cost of borrowingThe net-of-tax cost of borrowing is a loan’s real cost after…Nominal interest rateNominal interest rate is the quoted annual rate before the effect of…Nominal ledgerThe nominal ledger is the master record of every account in the…Non-Utilisation Fee (Commitment Fee) — Business Finance GlossaryA non-utilisation fee — also called a commitment fee — is charged on…Non-recourse factoringNon-recourse factoring is factoring where the factor absorbs the loss…Non-recourse financeNon-recourse finance limits the lender to the specific asset or…Non-utilisation feeA non-utilisation fee is a small charge on the undrawn part of a…Notional poolingNotional pooling lets a business (or group) offset the balances of…
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Off-balance-sheet financeOff-balance-sheet finance is funding that historically didn't show on…Offset accountAn offset account links your savings to your loan so the credit…On-demand facilityAn on-demand facility is borrowing the lender can require to be…Open bankingA secure, regulated way to share bank-account data with authorised…Operating cash flowThe cash generated by a company's core trading, before financing and…Operating cash flowOperating cash flow is the cash a business generates from its core…Operating cycleThe operating cycle is the time from acquiring stock to collecting…Operating leaseAn operating lease is essentially renting — you use the asset for…Operating profitThe profit a business makes from its core trading after operating…Opportunity cost (in finance decisions)Opportunity cost is the value of the best alternative you give up…Ordinary sharesOrdinary shares are the standard, voting shares of a company — they…Origination feeAn origination fee is an upfront charge a lender applies for…Output VATOutput VAT is the VAT your business adds to its sales and charges…Outstanding balanceThe outstanding balance is what you still owe right now — remaining…Outstanding principalOutstanding principal is the capital you still owe at a given moment,…OverdraftAn overdraft is a flexible borrowing facility on a business current…Overdraft (Business)A business overdraft is a revolving credit limit attached to a…Overdraft limitAn overdraft limit is the maximum a business is allowed to be…OverheadsOverheads are the indirect running costs of a business — rent,…OverpaymentAn overpayment is paying more than the required instalment, cutting…OvertradingWhen a business grows faster than its working capital can support —…OvertradingOvertrading is growing faster than your cash can keep up — taking on…Overtrading: What It Is, Warning Signs, and How Growing Businesses Can Avoid ItOvertrading happens when a business takes on more revenue than its…
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Payment holiday interestPayment holiday interest is the interest that keeps accruing during…Payment on accountA payment on account is an advance instalment towards next year's…Payment termsThe agreed period a customer has to pay an invoice — for example 30…Payment termsPayment terms are the deadline and conditions you set for an invoice…Payment waterfallA payment waterfall sets the strict order cash flows to each lender…Penalty interestPenalty interest is an extra charge for breaching loan terms — but on…Per annum (p.a.)Per annum (p.a.) means “per year” — the standard basis for quoting…Per diem interestPer diem interest is the daily interest amount on a loan, used to…Permanent working capitalPermanent working capital is the minimum level of working capital a…Personal APRPersonal APR is the specific annual rate you are quoted once a lender…Personal credit checkA review of a director's own credit file, relevant only where a…Personal guaranteeA personal guarantee is a director's legally binding promise to repay…Personal guarantee (defined)A personal guarantee is a director's promise to repay company debt…Personal guarantee capA personal guarantee cap limits how much a director can be pursued…Personal guarantee insurance (PGI)Personal guarantee insurance (PGI) is cover a director buys to repay…Personal liabilityA director's exposure to pay a company debt from their own assets —…Personal liability noticeA personal liability notice (PLN) is an HMRC device that can make a…Personal liability noticeA personal liability notice (PLN) makes a director personally liable…Petty cashPetty cash is a small sum of physical cash a business keeps to pay…Phoenix companyA phoenix company is a new business that emerges from the assets of a…Phoenix companyA phoenix company rises from an insolvent one — a new company…Plant and machineryPlant and machinery is the tax category of equipment, tools, vehicles…Positive cash flowPositive cash flow means more money came into a business than went…Pre-emption rightsPre-emption rights give existing shareholders first refusal on new…Pre-pack administrationPre-pack administration arranges the sale of an insolvent business…Preference sharesPreference shares rank ahead of ordinary shares for dividends and,…PrepaymentA prepayment is a cost paid in advance — carried as an asset and…Prepayment percentageThe prepayment percentage is another name for the advance rate in…Prime rateThe prime rate is the reference rate banks reserve for their…PrincipalPrincipal is the original sum of money borrowed on a loan, before any…PrincipalIn business lending, principal is the original capital sum advanced…Principal (loan)The amount of money originally borrowed on a loan — the sum on which…Priority of paymentsPriority of payments is the strict legal order in which an insolvent…Pro-forma invoiceA pro-forma invoice is a preliminary bill sent before goods or…Profit and loss accountThe profit and loss account (income statement) shows revenue minus…Promissory noteA promissory note is a signed promise to pay a set amount by a set…Prompt-payment discountA prompt-payment discount is a reduction offered to customers who pay…Provision (accounting)An amount set aside in the accounts for a probable future cost or…Provision (accounting)A provision is money set aside in the accounts for a likely future…Provision for taxA provision for tax is the estimated corporation tax owed on the…Prudence conceptThe prudence concept says: book likely losses early, book gains only…Purchase ledgerThe purchase ledger is the accounting record of all a business's…Purchase-order financePurchase-order finance advances funds against a confirmed customer…
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Quick assetsQuick assets are the assets you could turn into cash fast — cash…Quick ratioQuick ratio, also called the acid-test ratio, measures whether a…Quick ratio (acid test)A stricter liquidity measure comparing a company's most liquid assets…Quick ratio (acid test)The quick ratio, or acid test, is a stricter version of the current…
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Rate cap (interest cap)A rate cap sets a ceiling on a variable rate, so if the benchmark…Rate floor (interest floor)A rate floor sets a minimum below which your variable rate will not…Rate pass-throughRate pass-through is how much of a benchmark change actually reaches…Rate resetA rate reset is when a variable loan’s rate is recalculated against…Rateable valueRateable value is the Valuation Office's estimate of a property's…Real Time Information (RTI)Real Time Information (RTI) requires reporting pay and deductions to…Real vs nominal interest rateThe nominal rate is the stated rate; the real rate subtracts…ReceivablesReceivables (or accounts receivable) are the amounts your customers…ReceiverA receiver is appointed by a secured lender to take and sell the…ReconciliationReconciliation is checking that two records agree — typically your…Recourse factoringRecourse factoring is factoring where the business remains liable if…Recourse factoringRecourse factoring advances cash against invoices but leaves you…Reducing balanceReducing balance means interest is charged only on the outstanding…Reducing-balance interestInterest charged only on the outstanding balance of a loan, so the…Reference rateReference rate is the benchmark a variable loan is priced against,…RefinancingRefinancing is replacing one or more existing debts with a new…RefinancingReplacing an existing loan with a new one — usually to secure a lower…Refinancing (defined)Refinancing replaces existing debt with a new facility on better…Registered chargeA registered charge is security recorded at Companies House — the…Remittance adviceRemittance advice tells your supplier which invoices a payment…Repayment holidayA repayment holiday is an agreed, temporary pause in loan repayments…RepossessionRepossession is a secured lender taking back the asset behind a loan…Representative APRRepresentative APR is the advertised rate at least 51% of accepted…Representative APRRepresentative APR is the advertised annual cost of credit that at…Representative exampleA representative example is the standardised worked illustration of a…Reset frequencyReset frequency is how often a variable rate is recalculated against…Residual valueResidual value is what an asset is expected to be worth at the end of…Restrictive covenant (finance)A restrictive (negative) covenant limits what you can do while a loan…Retained Earnings: What They Are and How They Build Over TimeRetained earnings are the cumulative net profits a limited company…Retained earningsProfits kept in the business rather than distributed to owners —…Retained earningsRetained earnings are the profits a company has kept back rather than…Retained interestRetained interest is deducted from the advance up front — the lender…RetentionA retention is a percentage of a payment a client withholds as…Retention of titleRetention of title (RoT) keeps you the legal owner of goods until you…Return on Investment (ROI): A Plain Guide for UK DirectorsReturn on investment (ROI) is a ratio expressing the net gain from an…Return on borrowing (ROI on debt)Return on borrowing tests whether the extra profit a loan generates…Revenue recognitionRevenue recognition is the rule for <em>when</em> you count a sale as…Reverse factoringReverse factoring is another name for supply chain finance — an…Reversion rateA reversion rate is the follow-on rate a facility drops onto once its…Revolving creditRevolving credit is a flexible facility with a set limit that you can…Revolving credit (defined)Revolving credit is a reusable facility with an agreed limit you can…Revolving credit facilityA revolving credit facility is an agreed limit you can dip into,…Revolving facilityA revolving facility lets you draw, repay and redraw up to a limit,…Revolving facility interestRevolving facility interest is charged only on the amount you have…Risk-based pricingSetting a loan's interest rate according to the assessed risk of the…Rolled-up interestRolled-up interest is not paid monthly but added to the balance and…Rollover loanA rollover loan is renewed at maturity instead of repaid — useful for…Rule of 78The Rule of 78 is an older interest-allocation method that…RunwayRunway is how long your cash will last at the current rate of…
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SONIASONIA is the Sterling Overnight Index Average — the Bank of England…Sale and leasebackSale and leaseback turns an owned asset into cash — you sell it, then…Sales ledgerThe sales ledger is the accounting record of all a business's sales…Same-day paymentA same-day payment is a bank transfer that reaches the recipient the…Scheme of arrangementA scheme of arrangement is a court-sanctioned deal to restructure a…Seasonal financingSeasonal financing bridges the predictable cash troughs of a seasonal…Seasonal working capitalSeasonal working capital is the additional working capital a business…Section 455 taxSection 455 tax is a temporary corporation-tax charge a close company…Secured chargeA lender's legal claim over a company asset that secures a loan,…Secured creditorA secured creditor holds a charge over specific assets, so it ranks…Secured loanA secured loan is borrowing backed by a specific asset — property,…Secured vs unsecured (defined)Secured borrowing is backed by an asset the lender can claim;…Secured vs unsecured lendingSecured lending is backed by an asset the lender can claim; unsecured…Secured vs unsecured rateA secured rate is backed by an asset and usually lower; an unsecured…SecurityIn lending, security is an asset or legal claim a lender can enforce…Security Trustee — Business Finance GlossaryA security trustee holds security interests on behalf of a group of…Seed capitalSeed capital is the earliest money that gets a business off the…Selective invoice financeSelective invoice finance lets a business finance individual invoices…Self AssessmentSelf Assessment is how individuals — including many directors —…Senior Debt — Business Finance GlossarySenior debt is the most senior layer in a company's borrowing…Service fee (invoice finance)The service fee in invoice finance is the charge for administering…ServiceabilityA business's capacity to meet its loan repayments from ongoing cash…Settlement figureA settlement figure is the exact amount to close a loan today —…Share capitalShare capital is what shareholders paid for their shares — the…Share capitalShare capital is the money a company raises by issuing shares to its…Share premiumShare premium is the extra amount investors pay for shares over their…Shareholders' agreementA shareholders' agreement is a private contract among a company's…Simple interestSimple interest is charged only on the original principal, never on…Sinking fundA sinking fund is money set aside steadily to meet a known future…Soft search (soft credit check)A credit check that leaves no footprint visible to other lenders,…Sole trader financeSole trader finance covers funding for unincorporated businesses,…SolvencyA company's ability to meet its debts as they fall due, and to hold…SolvencySolvency is whether a business's total assets exceed its total…Solvency and insolvencySolvency means a company can pay its debts and its assets exceed…Solvency ratioA solvency ratio gauges whether a business can meet its long-term…Solvency statementA solvency statement is a formal declaration by the directors that…Solvency: What It Means Under UK Company LawSolvency is a company's ability to meet its financial obligations as…Sort codeA sort code is the six-digit number identifying your UK bank and…Spot factoringSpot factoring is factoring a single invoice as a one-off, rather…Stage paymentA stage payment is a payment made at a defined point in a project,…Standard variable rate (SVR)A standard variable rate (SVR) is a lender’s own default rate, set at…Standing orderA standing order pays a fixed amount to the same payee on a set…Statement of accountA statement of account is the running summary of everything owed on…Statutory accountsStatutory accounts are the formal, legally required year-end…Statutory auditA statutory audit is a legally required independent check of a…Statutory demandA statutory demand is a formal written demand for payment of an…Statutory late-payment interestStatutory late-payment interest is what a UK business may charge on…Stepped rateA stepped rate changes at pre-agreed points during the term by set…Stepped repaymentStepped repayments start lower and rise over time (or follow a…Stock financeStock finance (or inventory finance) is borrowing secured against a…Stock turnoverStock turnover (or inventory turnover) measures how many times a…Stock turnoverStock turnover measures how quickly you sell through and replace your…Stock turnoverStock turnover measures how many times you sell and replace inventory…Straight-line depreciationStraight-line depreciation writes off an asset in equal annual chunks…Subordinated Debt — Business Finance GlossarySubordinated debt ranks below senior obligations for repayment and…Subordinated debtSubordinated debt ranks behind other creditors — it's repaid only…SubrogationSubrogation lets a guarantor or insurer who has paid out step into…Subsidiary companyA subsidiary is a company controlled by another — its parent —…Sunk costA sunk cost is money already spent and unrecoverable — and the…Supply chain financeSupply chain finance is a buyer-led arrangement where a financier…Sweep accountA sweep account automatically moves surplus cash between accounts —…Syndicated loanA syndicated loan spreads a large facility across several lenders…
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Tangible assetA tangible asset is a physical asset you can touch and sell —…Tax pointThe tax point is the date a sale counts for VAT — it decides which…Tax yearThe tax year runs 6 April to 5 April for individuals, while companies…Tax-deductible interestTax-deductible interest is business borrowing interest you can set…Taxable profitTaxable profit is the adjusted profit figure your corporation tax is…Taxable supplyA taxable supply is any sale VAT can apply to — standard, reduced or…Teaser rateA teaser rate is a low introductory rate that jumps to a much higher…Temporary working capitalTemporary working capital is the fluctuating extra working capital a…TenorTenor is the time until a loan matures — its length. Matching tenor…Term SheetA term sheet is a non-binding summary document that sets out the…Term loanA term loan is a fixed lump sum borrowed upfront and repaid over a…Term loanA loan of a fixed amount repaid over a set period in regular…Term loanA term loan is the classic business loan: a fixed sum, borrowed for a…Term loan (defined)A term loan is a lump sum advanced once and repaid in fixed…Time to Pay (HMRC)Time to Pay is an arrangement with HMRC that lets a business spread a…Total amount payableTotal amount payable is the whole sum you repay over the loan’s life:…Total cost of creditThe total cost of credit is everything you pay to borrow money over…Tracker rateA tracker rate is contractually tied to a benchmark such as the base…Trade creditAn arrangement where a supplier lets a business pay for goods or…Trade creditTrade credit is the time a supplier gives you to pay after delivering…Trade creditorA trade creditor is a supplier a business owes money to for goods or…Trade creditorA trade creditor is a supplier you owe for goods or services bought…Trade creditorsTrade creditors are the suppliers you owe for credit purchases — the…Trade debtorA trade debtor is a customer who owes a business money for goods or…Trade debtorA trade debtor is a customer who owes you for goods or services…Trade debtorsTrade debtors are the customers who owe you for credit sales — the…Trade financeTrade finance is a broad category of funding that helps businesses…Trade finance (defined)Trade finance funds the goods a business buys or imports before it…Trade referenceA statement from a supplier about how reliably a business pays its…TrancheA tranche is a slice of a larger facility with its own terms —…Trial balanceA trial balance lists every ledger balance with debits and credits…TurnoverTurnover is your business's total sales income over a period, before…TurnoverTurnover is total sales revenue before costs — the top line, not…Turnover: What It Means, How It Differs from Profit, and Why Both MatterTurnover — also called revenue or sales — is the total income…
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Uncommitted facilityAn uncommitted facility is credit the lender <em>may</em> provide but…UnderwritingUnderwriting is the process a lender uses to assess a business's…Undrawn facilityThe undrawn facility is the headroom you have agreed but not yet used…Undrawn margin feeAn undrawn margin fee is a reduced charge on the undrawn part of a…Unsecured creditorAn unsecured creditor has no charge over any asset, so it sits near…Unsecured loanAn unsecured loan is business finance advanced without any specific…Utilisation rateThe utilisation rate is how much of your facility you are using —…
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VAT accountA VAT account is the running record of VAT charged and reclaimed that…VAT bad debt reliefVAT bad debt relief lets you reclaim VAT paid on a sale the customer…VAT cash accountingThe VAT cash accounting scheme lets eligible smaller businesses…VAT cash accounting schemeThe VAT cash accounting scheme lets you pay VAT only when customers…VAT invoiceA VAT invoice is one meeting HMRC's requirements — VAT number, rate…VAT registration numberA VAT registration number is the unique identifier HMRC issues on…VAT registration thresholdThe VAT registration threshold is £90,000 of rolling 12-month…VAT returnA VAT return is the report — usually quarterly — that tells HMRC how…VAT return periodA VAT return period is the span each return covers — usually a…VAT taxable turnoverVAT taxable turnover is the value of your non-exempt sales —…ValuationA valuation is a professional estimate of what an asset or business…Variable Costs: How They Behave, Examples, and Their Role in Pricing DecisionsVariable costs are expenses that rise and fall in direct proportion…Variable costsVariable costs rise and fall with output — materials, direct labour,…Variable costsVariable costs move with your sales — materials, stock, commission…Variable rateA variable rate is an interest rate that can change over the life of…Variance analysisVariance analysis compares what actually happened against your budget…
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Weighted Average Cost of Capital (WACC) ExplainedWeighted average cost of capital (WACC) is the blended rate a company…Weighted average cost of capital (WACC)WACC is the blended cost of a company’s debt and equity, weighted by…Weighted average interest rateA weighted average interest rate blends the rates on several debts,…Working capitalWorking capital is the money a business has available to fund its…Working capitalThe money a business has tied up in day-to-day operations — current…Working capital (defined)Working capital is the cash a business needs to run day to day — the…Working capital cycleThe working capital cycle is the loop your cash travels through the…Working capital facilityA working capital facility is short-term funding built to bridge the…Working capital facilityA working capital facility funds the day-to-day gap between paying…Working capital ratioThe working capital ratio is another name for the current ratio —…Working-capital cycleThe working-capital cycle is the time it takes for a pound spent on…Write-downA write-down partially reduces an asset's book value when it is worth…Write-offA write-off is the removal of a debt or asset from a company's…Write-off (bad debt)Removing an unrecoverable debt from a company's books, recognising…Writing-down allowanceA writing-down allowance gives 18% or 6% a year, on a…Wrongful tradingWrongful trading is carrying on trading when a director knew, or…
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Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.