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Mark Blayney specialises in raising funding for owner managed businesses. For more information on any aspect of business loans or finance in plain English contact him at:

The second part of this four part jargon busting guide to business loans and finance raising covers 'debtor finance' through to 'insolvency'.
Debtor finance - Funding based on raising finance against your debtor book through factoring or invoice discounting.
Deferred consideration - Where a seller of a business allows the buyer time to pay the purchase price.
Depreciation - The writing off to the profit and loss account of the cost of a fixed asset over time.
Disallowed - Debt that is not available for factoring or invoice discounting (for example because it is too old).
Discounted Cashflow - The value of money to be received in future periods, discounted back to its equivalent [url=http://www.fayatindia.com/giuseppe-zanotti.html]giuseppe zanotti pas cher[/url] today (as money to be received at some future date is by definition less certain and therefore less valuable than cash in hand now).
Dividend - Payment to shareholder out of profit.
Dividend policy - A company's approach as to whether to pay dividends to shareholders or to retain profits within the business.
Drawdown - See availability.
Due diligence - The purchaser's process of detailed investigation and review prior to completing a purchase.
Earn out - Where the price to be paid for a business is determined by its subsequent performance.
EBIT - [url=http://www.fayatindia.com/giuseppe-zanotti.html]giuseppe zanotti[/url] Earnings before interest and tax. The underlying profit from trading before it is affected by the business's tax status or financing. (earnings [url=http://www.shewyne.com/peutereyoutlet.html]peuterey sito ufficiale[/url] is an American term and the UK equivalent is PBIT - profit before interest and tax.)
EBITDA - Earnings before interest, tax, depreciation, and amortisation, used as a measure of the cash generated by trading activities.
Equity (1) - Money put into your business by investors in return for a share of its [url=http://www.jeremyparendt.com/Barbour-Paris.php]barbour france paris[/url] ownership and profits.
Equity (2) [url=http://www.shewyne.com/peutereyoutlet.html]peuterey outlet[/url] - The value of the difference between the market value of an asset (such as a machine on a finance lease or hire purchase arrangement, or property subject to a mortgage), and the outstanding borrowings.
Equity gap - The difficulty faced when looking to [url=http://www.rtnagel.com/louboutin.php]louboutin pas cher[/url] raise equity funding at a level higher than business [url=http://www.tagverts.com/barbour.php]barbour deutschland[/url] angels are likely to provide, but lower than the level at which venture capitalists want to invest.
Escalator - See ratchet.
Excess - Overdraft levels greater than the agreed [url=http://www.shewyne.com/moncleroutlet.html]moncler sito ufficiale[/url] facility.
Facilities - Banking term for the package of loans agreed with the client (such as overdraft facility and mortgage on the premises), which will be set out in a facility letter.
Factoring - Lending money based on the security of a company's debtors where the lender takes over the [url=http://www.mxitcms.com/abercrombie/]abercrombie[/url] collection process (contrast with invoice discounting).
Financial assistance - Rules under the Companies Act to prevent a company's own assets being used to buy it, except by using a whitewash report.
Financial promotion - The act of seeking investment, governed by tight regulation with potentially severe criminal penalties.
Fixed assets - Assets owned by a business such as property or plant and machinery to be used over a number of years, the cost of which is written off each year by a depreciation charge.
Fixed charge - See charge.
Flotation - The process of listing a company's shares for sale on a stock exchange also known as listing or an Initial Public Offering (IPO).
Floating charge - See charge.
Funding gap - The difference between the amount of credit you are receiving from your suppliers and credit you are providing to customers [url=http://www.sandvikfw.net/shopuk.php]hollister outlet sale[/url] (your terms of trade) together with the time it is taking to turn purchases into sales; which determines the degree to which your working capital required funding.
GAAP (Generally Accepted Accounting Practice) - This means that your accounts have been prepared in accordance with normal accounting conventions. Note that American and UK [url=http://www.gotprintsigns.com/abercrombiepascher/‎]abercrombie soldes[/url] GAAP have some significant differences and you will need professional advice if this is an issue.
Gearing - Borrowings. A company is said to be highly geared (in US: leveraged) if it is largely funded by way of loans rather than share capital.
Going concern - The accounting assumption that the business will continue to trade into the future.
Grants - Cash provided to you without you having to pay interest or give a share in your business, which you do not have to repay if you meet the terms on which it is provided.
Gross profit - Your turnover or sales, less the costs of the goods sold.
Hardcore - Apparently permanent level of overdraft.
Headroom - Available level of unused overdraft facility.
Hire purchase - Arrangement where an asset can be bought using installment payments.
Historical cost convention - The assumption that the value of assets on [url=http://www.mxitcms.com/abercrombie/]abercrombie milano[/url] the balance sheet is recognised at the original cost of purchase, less any depreciation or subsequent write-down to reflect a loss of value.
Initial public offering (IPO) - See flotation.
Insolvency - Being unable to pay debts as they fall due. The Insolvency Act sets out a number of tests including failure to deal with a statutory demand or to pay a judgment debt, and liabilities exceeding assets, each of which would be taken by a court as proof of insolvency.
The third article in this four part jargon busting guide to business loans and finance raising covers 'invoice discounting' through to 'private equity'.
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