Aquiring Assets Flashcards
Amortized Loan
Balloon Payment Loan
A loan amortization method which a large portion of the principal is due with the final payment
CApital
A collection of physical and financial assets that have market value
Credit
The capacity of ability to borrow money
Down Payment
A portion of the cost of purchasing a capital asset financed from owner’s equity, usually cash
Fixed Interest RAte
An interest rate that remains the same during the entire length of the loan
Installment loan
A loan that will be repaid by a series of payments scheduled over a period of time
Installment Purchase Contract
A contract by which a purchaser acquires an asset from a seller by making a series of of principal and interest payments, without making use of any funds from a third-party
Lease
An agreement that allows a person to use and/or possess someone else’s property in exchange for a rental payment
Line of Credit
An arrangement by which lenders transfers loan funds to a borrower as they are needed up to a maximum amount
Marketing loan
A loan that can be obtained from the Farm Service Agency using grain or cotton as collateral. The amount on the loan is a fixed rate per bushel or ton and commodity must be stored until loan is repaid
Secured Loan
A loan for which the borrower agrees to let the lender take possession of and sell certain assets if the repayment terms are not met
Self Liquidating loan
A loan that will be repaid from the sale of the asset originally purchased with the loan funds
Unsecured Loan
A loan for which the borrower does not give the lender the right to possess certain assets if the repayment terms are not met; There is no collateral
Variable interest rate
An Interest rate that can change during the repayment period of a loan
