A commercial loan is a short-term (typically 90-day) renewable loan designed to finance the seasonal working capital needs of a business, such as the purchase of inventory or the production and distribution of goods.
Crowding out occurs when heavy federal borrowing leads to higher interest rates, which subsequently reduces the borrowing ability of businesses and consumers.
Debt capital refers to borrowed funds that a firm utilizes to support its business operations, growth, or investment projects. These funds come with the obligation to pay back with interest and can be sourced from various lenders, such as banks, bond investors, or other financial institutions.
Equipment leasing involves acquiring tangible assets such as computers, railroad cars, and airplanes, and then leasing them to businesses in exchange for lease payments and potential tax benefits like depreciation deductions.
Highly leveraged situations in business or investments involve financing to a large degree using borrowed money, which raises the stakes in terms of financial risk and the potential for both gains and losses.
An Inventory Loan, also referred to as Inventory Financing, is a type of short-term loan that businesses use to purchase inventory. This financing helps firms manage cash flow by converting stock into liquidity.
Red ink is a slang term often used to describe financial losses, especially highlighted in financial statements where losses are marked in red for quick identification.
Trade credit refers to open-account arrangements with suppliers of goods and services, involving a firm's record of payment with the suppliers. It constitutes a company's accounts payable and is an essential external source of working capital despite potentially high costs.
An uncommitted facility represents a provisional agreement wherein a bank may lend funds to a company on a short-term basis, though it is not legally bound to extend the specified amount.
