Business Finance Terms You Need to Know

Hi there,

Starting your own business isn't easy, especially if you're new to the finance world. As a business owner, you will encounter new terminology in every area of business, including financing.

Whether you're entirely new to factoring or are familiarizing yourself with this area of funding, expanding your knowledge of important terms helps you become more familiar with your funding options and allows you to navigate all possibilities.

Here's a short list of key terms and their definitions:

• Accounts receivable - a commercial debt due for repayment, usually in 30-90 days. In the factoring industry, the accounts receivable is what a company sells to factor.
• Assets - items that hold commercial or exchange value.
• Break-even point - the level of business operation where total costs equal total revenue.
• Cash flow - the difference between cash in (income) vs. cash out (expenses).
• Line of credit - the amount of credit that may be extended to a borrower by a lender.
• Non-recourse - a type of factoring where the factor assumes complete responsibility for collection of debt.
• Purchase order - a document or form used by a customer to issue an order for goods or services.
• Rebate - the return of funds issued to the client by a factor from the reserve account.

These are by no means the only terms you need to know, but learning their definitions can help with your effort to sustainably fund your business. Check out our complete finance glossary on our website to see more.

Thank you,

Daniel Eke

Factor Funding Co.