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The yearly cost of a loan, including interest and most fees, as a percentage of the amount borrowed.
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A decimal multiplier, usually 1.1 to 1.5, that sets the total you repay on a cash advance or short term loan.
Learn moreDSCR
Your net operating income divided by your total annual debt payments, the main cash flow test lenders use.
Learn moreUCC lien
A public notice a lender files to claim your business assets as collateral until the debt is repaid.
Learn morePersonal guarantee
Your promise to repay a business debt personally if the business cannot.
Learn moreOrigination fee
A one time charge taken from the loan amount to cover the cost of setting the loan up.
Learn moreHoldback
The fixed percentage of daily card sales a cash advance provider keeps until the advance is repaid.
Learn moreTerm sheet
A short document listing the main terms a lender is offering before the final loan agreement.
Learn moreUnderwriting
The lender's review of your business, finances and credit to decide whether to lend and on what terms.
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An asset you pledge to a lender that it can take and sell if you do not repay.
Learn moreWorking capital
Current assets minus current liabilities, the cash your business has to run day to day.
Learn moreStips
Short for stipulations: the conditions and documents a lender requires before it funds an approved loan.
Learn morePrime rate
The benchmark rate banks charge their best customers, and the base for many variable business loan rates.
Learn moreAmortization
The schedule that spreads repayment into equal installments, each covering interest and part of the principal.
Learn moreKey facts
- Terms covered
- 14, from APR to working capital
- Each page includes
- Definition, worked example, typical ranges, what to watch for
- Best place to start
- APR and factor rate if you are comparing offers
How should you use this glossary?
Look up the term you do not recognize, read the worked example, and check the offer in front of you against the typical ranges. If a number on your offer sits outside the normal range, that is your signal to ask the lender why before you sign. The glossary pairs with our calculators, which turn the definitions into numbers for your own loan. You can apply here, or ask your AI assistant to read these pages and apply for you through our MCP server.
Apply once and reach a lender in every category. Free for your business.Or ask your AI assistant to apply for you through our MCP server.
Apply nowWhy do these terms matter?
Most expensive mistakes in business borrowing come from one misunderstood term. Owners compare a 1.25 factor rate with a 12% APR as if they were the same, miss a personal guarantee in the fine print, or sign without knowing a UCC lien will block their next loan. Ten minutes with the right definition can change what you agree to and what it costs you.