Interest And Loan Flashcards
borrowing money from lenders and not giving up ownership.
Debt Financing
the method of raising capital by selling company stock to investors (stockholders) in exchange of ownership interests in the company.
Equity Financing
usually offered to firms that don’t qualify for a line of credit, generally runs less than a year, though it can also refer to a loan of up to 18 months or so
Short term Loan
runs for three to 25 years, uses company assets as collateral, and requires monthly or quarterly payments from profits or cash flow.
Long Term Loan
may also provide financial services such as wealth management, currency exchange, and safe deposit
Bank
financial institution licensed to receive deposits and make loans.
Bank
financial institution that does not have a full banking license and cannot accept deposits from the public.
Nonbank Financial Institution
the willingness of the borrower to repay the loan
Character
security pledged for payment of the loan
Collateral
a customer’s ability to generate cash flows
Capacity
current economic or business conditions
Condition
a customer’s financial resources
Capital
5 C’s Credit
Character
Capacity
Collateral
Capital
Condition
It is the value of a current asset at a future date based on an assumed rate of growth.
Future Value
the amount to which an investment will grow after earning interest.
Future Value
