The final part of this guide to enterprise loans and finance raising covers 'property development finance' through to 'yield'.
Property development finance - Finance to cover site buy and building costs designed to fund asset development.
Prospectus - A box of data ready for provision to potentially concerned investors in a flotation.
Prudence - The accounting notion of recognising losses as soon as they can be identified, but profits only once they have been earned.
Public little enterprise (Plc) - A enterprise that meets statutory requirements about the level of its issued share capital and which may therefore be entitled to sell shares to the communal (although not all Plcs are listed on a stock exchange).
Quick ratio - See the definition of acid ratio in part 1 of this series.
Ratchet - Arrangement for increasing management's shareholding if enterprise hits targets.
Receivable - The Us equivalent to the Uk term debtor.
Recourse - Arrangement where a factor or invoice discounter can recover any strengthen made to you in respect of any debt that is subsequently not recovered. A non-recourse arrangement provides you with security against this.
Regulated loan - A loan where a first payment is given on a domestic asset or on a industrial asset where over 40% of the area is used as your residence.
Reserves (1) - A business's retained earnings.
Reserves (2) - discount of your availability applied by a factor or invoice discounter to cover any possible exposure (for example to victualer contras).
Rolling bridges - The use of a series of bridging loans typically to fund a phased asset development project.
Sale and leaseback - A way of raising cash by selling an asset and then renting it back.
Second round funding - additional equity investment into a enterprise which has already had external equity investment (for example where a investment capitalist invests into a enterprise which has had start up or seed money from a enterprise angel, to enable it to take its products to market).
Secondary buy out - buy of a Vc's stake by other Vc.
Section 320 - Provision in the fellowships Act that prevents a director purchasing big assets (broadly anyone worth more than £100,000 or 10% of the net assets of the company) without first obtaining the consent of the shareholders.
Security (1) - A source from which a debt can be repaid if the borrower does not make repayments in the general way, such as a payment over asset or other assets.
Security (2) - A document acknowledging that the owner has clear ownership (such as refund of a debt from the issuer).
In the Us can be extended to cover a share certificate.
Self certification - The process whereby a borrower confirms that they are able to make repayments on a loan rather than proving it by providing accounts.
Share capital - The capital contributed to a enterprise by its shareholders.
Shareholders funds - The total book value of a enterprise (the net assets on its equilibrium sheet) which is owned by shareholders.
Small Firms Loan warrant - A scheme where the Government provides a partial warrant to lenders for loans made to small businesses.
Sole trader - An individual in enterprise in their own name.
Stapled finance - A box of possible borrowings pre-arranged for the buyer by the seller of a business.
Statement of source and application of funds (Ssaf) - Statement showing how profits generated by the enterprise consolidate with investment in or realisation of assets, together with prestige received or repaid, effect in a movement in the businesses cash.
Stock (1) - A company's trading stock comprising raw materials, work in progress, and terminated goods stock.
Stock (2) - A company's shares.
Stock days - A part of the time taken in converting goods purchased into sales.
Stock replacement - A shop in which shares and other securities can be traded.
Structured loans - Loans from an asset based lender across more than one type of asset (eg factoring and a asset loan).
Sub prime - Borrowers with considerable levels of adverse development them unattractive to mainstream lenders.
Swing - Movement in a bank current account.
Syndication - Situation where a estimate of funders join together to each fund a share of a project.
Term loan - A loan repayable by an agreed level of installments over a duration of years.
Top up funding - additional mezzanine or equity finance to cover the incompatibility between total costs of a asset development scheme and the sums available under general asset development finance.
Trade finance - scholar funding of trading transactions such as importing goods for resale.
Transaction at an undervalue - Selling an asset at less than its fair value. In the event of an insolvency, a liquidator will divulge considerable transactions preceding the insolvency and can act to set aside transactions at undervalue.
Vc - investment Capital or investment Capitalist.
Veil of incorporation - The security offered to shareholders by a company's little liability.
Vendor finance - See deferred consideration.
Venture capitalists (Vc) - A firm set up to hold investors' money and to invest it in high increase opportunities. Ordinarily look to perform a return of 30% per annum and hold investments for three to five years before selling. Ordinarily tend not to be concerned in deals below say, £0.5m investment.
Whitewash narrative or bargain - Accountant's narrative used to enable a business's assets to be used as security on which to raise money to buy it.
Work in strengthen - Goods which are in the process of create but which are not yet finished, or work on a contract which is not yet complete.
Working capital - A business's current assets less its current liabilities.
Working capital cycle - The notion that a business's working capital turns over as it goes through its cycle of trade; suppliers providing goods which come to be stock and then debtors once sold, with the cash received from debtors then being used to pay suppliers.
Yield - The estimate of return received (E for earnings) for the price (P) paid. Ordinarily shown as a percentage.
We hope this short series has helped to de-mystify some of the jargon used in finance.
company Loans Glossary: Part 4 - asset improvement Finance to Yield