Credits – Vocabulary and Phrases
permitted overdraft – an arrangement with a bank which allows bridging a temporary mismatch between revenues and expenses
The interest rate is 9 – 16 % on annual level and it is paid only for the days of use of the permitted overdraft on the amount of overdraft.
overdrawn – having taken more money out of one's account than it had in it
His account is overdrawn.
revolving credit – short-term credit for financing operations repayable within one year with the possibility of renewal for another period
YRC Worldwide has entered into a new revolving credit facility and expanded its asset-backed securitization facility.
inventory loan – a secured short-term loan to purchase inventory such as raw materials
Franklin provides inventory loans in conjunction with their Accounts Receivable and Factoring programs.
promissory note – a written promise to pay a set sum on an agreed date
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letter of credit (LOC) – a letter from a bank, usually for presentation to another branch or bank, authorizing the issue of credit or money to the person named
Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods.
factoring – when a financial institution called a factor takes over the administration of a company's receivables (money owed by suppliers). The factor pays the business the money that suppliers owe to it immediately, ion return for a percentage. The business benefits by getting the money immediately, improving its cash flow.
With invoice factoring, we provide an immediate advance of up to 80% of the value of invoices.
forfeiting – when a specialized financial institution buys the debt to an exporter on or shortly after the delivery of goods to an importer
Mezra Forfeiting is a London based forfeiting company established in 1994, specializing in sourcing export finance for those 'difficult' markets on behalf of our client base of exporters and international trade finance professionals.
bridging loan – A type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing.
They cannot persuade a bank to lend them 100 per cent of the house’s value because their combined income is not high enough, so they need a bridging loan.
amount due – Money that taxpayers must pay to the government when the total tax is greater than their total tax payments.
Your payment history and amount due provides access to a record of your payments, bills and adjustments for the last 24 months and your current amount due.
insufficient funds – A situation where an account does not have enough money to cover a payment.
My account has insufficient funds so my check bounced.
to charge interest – to impose a sum paid for the use of money or for borrowing money
We will begin to charge interest on your loan from the day that we transfer the money to your solicitor.
fixed interest rate – A loan or mortgage with an interest rate that will remain at a predetermined rate for the entire term of the loan.
Fixed interest rate options are applicable to both secured and unsecured loans.
outstanding balance – An amount of a loan that remains to be paid; a note on which there is still a liability.
Monthly bills and credit cards usually display the outstanding balance on the statement.
to default on a loan – The failure to promptly pay interest or principal when due. Default occurs when a debtor is unable to meet the legal obligation of debt repayment. Borrowers may default when they are unable to make the required payment or are unwilling to honour the debt.
Should your loan enter default status, you should contact the appropriate lender as soon as possible.
to process a loan application – to handle the application by systematically organizing it, following up with appropriate action
We will then process the loan application either electronically or with a paper certification form, depending on the lender chosen.
debt settlement – It is usually reached when a debtor is unable to fully meet his/her debt obligations due to financial hardships and attempts by the creditor to collect on the debt have failed. The creditor agrees to cancel part of the debt and accept the remaining sum as full repayment.
Debt settlement is also called debt negotiation. Technically speaking, a debt settlement is the agreement while debt negotiation is the process through which both parties reach that agreement.
bad credit – a bad pattern of repayment the debt
If you have a bad credit history you have probably found it’s hard to get a loan, in fact the only type that you may be able to get is a bad credit loan.
bad debt – Accounts receivable that will likely remain uncollectible and will be written off.
Bad debts appear as an expense on the company's income statement, thus reducing net income.
creditor – A person or organization which extends credit to others.
guarantor – One who guarantees an obligation and has a legal duty to fulfil it.
to guarantee – To accept responsibility for an obligation if the entity with primary responsibility for the obligation does not meet it.
instalments – The regular periodic payment that a borrower agrees to make to a lender.
payment holiday – A period of time during which you do not have to pay your debt
They say that they do not have a payment holiday policy, nor do they freeze interest or charges and that I must continue to make payments or face the consequences.
loan maturity – The Loan Maturity Date is the date your loan principal, which is the amount of money borrowed or remaining unpaid, must be repaid in full.