Glossary
1. ACCOUNTING
The recording, classifying, summarizing, and interpreting in a significant manner and in terms of money, transactions, and events of a financial character.
2. ACCOUNTS PAYABLE
Trade accounts of businesses representing obligations to pay for goods and services received.
3. ACCOUNTS RECEIVABLE
Trade accounts of businesses representing moneys due for goods sold or services rendered evidenced by notes, statements, invoices, or other written evidence of a present obligation.
4. ASSUMPTIONS
The act of assuming/undertaking another's debts or obligations.
5. AUCTION
A public sale of goods to the highest bidder.
6. AUTOMATIC DATA PROCESSING
Data processing largely performed by automatic means. The discipline which deals with methods and techniques of automatic data processing. Pertaining to data processing equipment such as electrical accounting machines and electronic data processing equipment.
7. BANKRUPTCY
A condition in which a business cannot meet its debt obligations and petitions a federal district court for either reorganization of its debts or liquidation of its assets. In the action the property of a debtor is taken over by a receiver or trustee in bankruptcy for the benefit of the creditors. This action is conducted as prescribed by the National Bankruptcy Act, and may be voluntary or involuntary.
8. BREAKEVEN POINT
The break even point in any business is that point at which the volume of sales or revenues exactly equals total expenses - the point at which there is neither a profit nor loss - under varying levels of activity. The breakeven point tells the manager what level of output or activity is required before the firm can make a profit; reflects the relationship between costs, volume, and profits.
9. BUSINESS BIRTH
Formation of a new establishment or enterprise.
10. BUSINESS DISSOLUTION
For enumeration purposes, the absence from any current record of a business that was present in a prior time period.
11. BUSINESS FAILURE
The closure of a business causing a loss to at least one creditor.
12. BUSINESS PLAN
A comprehensive planning document which clearly describes the business developmental objective of an existing or proposed business applying for assistance in SBA's 8(a) or lending programs. The plan outlines what and how and from where the resources needed to accomplish the objective will be obtained and utilized.
13. BUSINESS START
For enumeration purposes, a business with a name or similar designation that did not exist in a prior time period.
14. CANCELED LOAN
The annulment or rescission of an approved loan prior to disbursement.
15. CAPITAL
Assets less liabilities, representing the ownership interest in a business; a stock of accumulated goods, especially at a specified time and in contrast to income received during a specified time period; accumulated goods devoted to the production of goods; (4) accumulated possessions calculated to bring income.
16. CAPITAL EXPENDITURES
Business spending on additional plant equipment and inventory.
17. CAPITALIZED PROPERTY
Personal property of the agency which has an average dollar value of $300.00 or more and a life expectancy of one year or more. Capitalized property shall be depreciated annually over the expected useful life to the agency.
18. CASH DISCOUNT
An incentive offered by the seller to encourage the buyer to pay within a stipulated time. For example, if the terms are 2/10/N 30, the buyer may deduct 2 percent from the amount of the invoice (if paid within 10 days); otherwise, the full amount is due in 30 days.
19. CASH FLOW
An accounting presentation showing how much of the cash generated by the business remains after both expenses (including interest) and principal repayment on financing are paid. A projected cash flow statement indicates whether the business will have cash to pay its expenses, loans, and make a profit. Cash flows can be calculated for any given period of time, normally done on a monthly basis.
20. Cash Flow
A report which analyzes the actual or projected source and disposition of cash during a past or future accounting period.
21. CHARACTER
A letter, digit, or other symbol that is a part of the organization, control, or representation of data used in computer systems.
22. CHARGE-OFF
An accounting transaction removing an uncollectible balance from the active receivable accounts.
23. CHARGED OFF LOAN
An uncollectible loan for which the principal and accrued interest were removed from the receivable accounts.
24. CLOSED LOAN
Any loan for which funds have been disbursed and all required documentation has been executed, received, and reviewed. For statistical purposes, first or total disbursement is counted as a closed loan.
25. CLOSING
Actions and procedures required to affect the documentation and disbursement of loan funds after the application has been approved and the execution of all required documentation and its filing and recording where required.
26. COLLATERAL
Something of value - securities, evidence of deposit, or other property - pledged to support the repayment of an obligation.
27. COLLATERAL DOCUMENT
A legal document covering the item(s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc.
28. COMPROMISE
The settlement of a claim resulting from a defaulted loan for less than the full amount due. Compromise settlement is a procedure available for use only in instances where the government cannot collect the full amount due within a reasonable time, by enforced collection proceedings, or where the cost of such proceedings would not justify such effort.
29. CONSORTIUM
A coalition of organizations, such as banks and corporations, set up to fund ventures requiring large capital resources.
30. CONTINGENT LIABILITY
A potential obligation that may be incurred dependent upon the occurrence of a future event. Two examples are: (1) the liability of an endorser or guarantor of a note if the primary borrower fails to pay as agreed and (2) the liability that would be incurred if a pending lawsuit is resolved in the other party's favor.
31. CORPORATION
A group of persons granted a state charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members. The process of incorporating should be completed with the state's secretary of state or state corporate counsel, and usually requires the services of an attorney.
32. COSTS
Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for
33. CREDIT RATING
A grade assigned to a business concern to denote the net worth and credit standing to which the concern is entitled in the opinion of the rating agency as a result of its investigation.
34. DATA ELEMENT
The basic unit of identifiable and definable information. A data element occupies the space provided by fields in a record or blocks on a form. It has an identifying name and value or values for expressing a specific fact. For example, a data element named "Color of Eyes" could have recorded values of "Blue (a name)," "Bl (an abbreviation)," "06 (a code)." Similarly, a data element named "Age of Employee" could have a recorded value of "28" (a numeric value).
35. DEBENTURE
Debt instrument evidencing the holder's right to receive interest and principal installments from the named obligor. Applies to all forms of unsecured, long-term debt evidenced by a certificate of debt.
36. DEBT CAPITAL
Business financing that normally requires periodic interest payments and repayment of the principal within a specified time.
37. DEBT FINANCING
The provision of long term loans to small business concerns in exchange for debt securities or a note.
38. DEED OF TRUST
A document under seal which, when delivered, transfers a present interest in property. May be held as collateral.
39. DEFAULTS
The nonpayment of principal and/or interest on the due date as provided by the terms and conditions of the note.
40. DEFERRED LOAN
Loans whose principal and or interest installments are postponed for a specified period of time.
41. DISBURSEMENT
The actual payout to borrower of loan funds, in whole or part. It may be concurrent with the closing or follow it.
42. DISBURSING OFFICER
An employee authorized to pay out cash or issue checks in settlement of vouchers approved by a certifying officer.
43. DIVESTITURE
Change of ownership and/or control of a business from a majority (non-disadvantaged) to disadvantaged persons.
44. EAP COUNSELOR
Conducts confidential consultations with troubled employees who so request, who are referred for objective analysis of a personal problem, and for identification of the best available assistance and/or professional services needed to resolve the employee's problem.
45. EARNING POWER
The demonstrated ability of a business to earn a profit, over time, while following good accounting practices. When a business shows a reasonable profit on invested capital after fully maintaining the business property, appropriately compensating its owner and employees, servicing its obligations, and fully recognizing its costs, the business may be said to have demonstrated earning power. Demonstrated earning power is the foremost test of the business risk in pressing upon an application for a loan.
46. EASEMENT
A right or privilege that a person may have on another's land, as the right of a way or ingress or egress.
47. EMPLOYEE ASSISTANCE PROGRAM (EAP) COORDINATOR
Coordinates the activities of Central Office or regional counselors, maintains a community resource list of available professional assistance to troubled employees, and a current roster of EAP counselors for the area of his/her jurisdiction.
48. ENTERPRISE
Aggregation of all establishments owned by a parent company. An enterprise can consist of a single, independent establishment or it can include subsidiaries or other branch establishments under the same ownership and control.
49. ENTERPRISE
Aggregation of all establishments owned by a parent company. An enterprise can consist of a single, independent establishment or it can include subsidiaries or other branch establishments under the same ownership and control.
50. ENTREPRENEUR
One who assumes the financial risk of the initiation, operation, and management of a given business or undertaking.
