An anchor tenant plays a pivotal role in the context of real estate development, specifically within shopping centers and office buildings. It usually refers to a prominent, well-known business that leases a significant portion of the property, thereby attracting other tenants and customers.
Annual Percentage Rate (APR) is a measure of the cost of borrowing, expressed as a yearly interest rate. It includes interest as well as other fees and charges for a loan.
Asset-Backed Securities (ABS) are financial instruments backed by loan paper or accounts receivable originated by banks, credit card companies, or other providers of credit, often enhanced by a bank letter of credit or by insurance coverage from a third party.
A Banker's Acceptance (BA) is a time draft drawn on and accepted by a bank, commonly used to effect payment for merchandise sold in import-export transactions, and a significant source of financing used in international trade.
A budget mortgage is a type of mortgage that necessitates monthly payments covering property taxes and insurance alongside principal and interest.
Capital cover is a crucial financial metric indicating the capital value of a portfolio relative to the capital sum required to finance it. It serves as a risk assessment tool, with lower capital cover indicating higher investment risk.
A counteroffer is the rejection of an original offer to buy or sell along with a simultaneous substitute offer. They are commonly encountered in various transactions, particularly in real estate, where factors other than price might be negotiated.
Countervailing credit, often referred to as back-to-back credit, is a form of financing used in international trade that involves two separate but interdependent letters of credit. This type of credit is typically established by an intermediary in trade transactions to facilitate complex trade processes.
Crowdfunding refers to the financing of a new company or other project by selling shares or bonds directly to small private investors via the Internet. Despite its attractions, there have been fears that this growing practice offers scant legal protection to investors or to entrepreneurs, who may find their ideas are stolen and developed by others. In the UK and the USA, crowdfunding platforms have increasingly been brought within the remit of the regulatory authorities.
The debt/equity ratio is a financial metric that indicates the relative proportion of a company’s debt to its total equity. It demonstrates how leveraged a company is in terms of its debt financing compared to its equity financing.
A downpayment is the initial upfront portion of the total amount due for the purchase of property or goods, generally paid in cash, with the remaining balance being financed through debt.
Equity Share Capital refers to the portion of a company's capital that is raised in exchange for shares, representing ownership stakes in the company. This differs from non-equity shares which may include debt or preferred stock.
Financial gearing, also referred to as leverage, is the degree to which a company utilizes borrowed money or debt to finance its operations and growth.
A financial lease is a leasing arrangement where the lessor's role is mainly limited to financing the property, while the lessee takes on the responsibilities of maintenance, insurance, and taxes, resembling a loan in its structure.
The financial structure of a company refers to the specific mixture of long-term debt and equity that it uses to finance its operations. Understanding financial structure is crucial for evaluating financial health and making strategic business decisions.
Financing involves the act of providing funds for business activities, making purchases, or investing. It enables companies to meet their objectives through various financial instruments like loans, investment, shares, or bonds.
A fixed-rate loan is a type of financing arrangement where the interest rate remains constant for the entire term of the loan, providing borrowers with predictable monthly payments.
A floor loan represents the minimum amount that a lender is willing to advance to a borrower, typically within real estate or construction financing.
A loan provided to bridge the gap between a floor loan and the total amount of the permanent loan for real estate development, especially during the rent-up period.
Hire Purchase (HP) is a method for buying goods in which the purchaser takes possession upon an initial installment payment and gains ownership once all agreed subsequent payments are made.
Hire Purchase (HP) is a type of installment purchase plan where the buyer takes possession of an item immediately and pays for it in periodic installments, while ownership of the item remains with the seller until the final payment is made.
A home loan, also known as a mortgage, is a financing arrangement in which an individual borrows money from a financial institution to purchase residential property.
Industrial Development Bonds (IDBs) are debt obligations issued by state or local governments for funding the capital investments in the trade or business operations of nonexempt persons.
An instalment sale in the USA allows businesses and individuals to acquire high-value goods over time by making regular payments. This is similar to the UK's hire purchase system.
Invoice Discounting is a financial practice wherein a business sells its invoices to a third party, typically a factoring house, at a discount to obtain immediate cash. It differs from traditional factoring in that it does not typically include sales accounting and debt collecting services.
A Loan Creditor is an individual or institution that provides financing to a business or individual, thereby becoming entitled to repayment of the principal amount along with interest.
A Loan Origination Fee is a charge levied by a lender for processing a new loan application, used as compensation for putting the loan in place.
Minority Business refers to enterprises owned and operated by underrepresented groups, often experiencing unique challenges such as lack of financing and management experience. Government initiatives, including earmarking a percentage of government contracts, aim to support their growth and success.
Mortgage out refers to obtaining financing in excess of the cost to construct a project. It's a process used by developers to secure a permanent loan commitment based on a high percentage of the completed project's value. Due to stricter underwriting criteria, opportunities to mortgage out have become nearly nonexistent.
Pre-financing refers to an arrangement where a buyer, often an importer, finances the activities of a supplier by making an advance payment against future delivery. This practice is sometimes employed as a fair trade policy to support farmers in developing nations.
A preliminary process used to estimate the most expensive home a buyer can afford based on their income and available liquid assets. This exercise outlines potential pricing but does not guarantee specific financing nor obligate the buyer to accept it.
A type of municipal bond issued to finance revenue-generating projects and repaid with the revenues produced by those projects, such as toll bridges, highways, educational facilities, hospitals, sewer systems, stadiums, or other public facilities.
Secondary financing refers to additional loans or mortgages taken out on a property that already has an existing or primary mortgage. This type of financing is often used to cover down payments, renovations, or other expenses.
A shell corporation is a company that is incorporated but has no significant assets or operations. It may serve legitimate purposes, such as obtaining financing, but can also be used in fraudulent schemes.
A short-term note issuance facility (SNIF) is a financing arrangement through which an institution can issue short-term notes to investors. This facility provides liquidity and flexibility for the issuing entity to meet its short-term funding needs.
Supplier credit is a financing method in which a supplier allows a buyer to purchase goods or services on credit, paying for them at a later date, potentially improving the buyer’s cash flow and operational efficiency.
A tender panel involves a group of banks that come together to competitively offer loan terms to a company, ensuring the borrower gets the best conditions for financing.
The detailed conditions and arrangements specified within a contract, particularly relating to sales, include various elements such as price, financing, contingencies, closing costs, and personal property items included in the sale.
A track record is a businessman’s reputation for producing results on a timely and economical basis. A strong track record can significantly influence the ability to secure financing and attract investors for new projects, ensuring successful and timely project completion.
