Micro-Enterprise Test 3 Flashcards
the right to take possession of collateral until a debt is repaid
lien
a special type of corporation where individual owners (or members) are taxed on the profits of the company, but the corporation (not the members) is liable for debts or judgements against the company
limited liability corporation (LLC)
a loan that provides the borrower a maximum amount of money he/she can borrow- the borrower can then access or use that line of credit for only as much as they need at any particular time
line of credit
the state agency that collects taxes
Louisiana Department of Revenue
how a business communicates to larger numbers of customers, motivating them to learn more about the business and its offering. EX. advertising is a marketing tool (TV, radio, flyers)
marketing
the date a loan is repaid in full
maturity
a person who coaches and supports an entrepreneur or a student studying to become an entrepreneur
mentor
the money a person borrows to buy real estate
mortgage
an investment security that includes many different stocks purchased and held together. Investors purchase mutual funds because they are less risky than holding any individual stock
mutual fund
“net” means revenue after costs
net income
a payment that is owed every month
obligation
debt obtained from a number of online companies. Borrowers need to disclose much less information about themselves to obtain online credit, and online credit companies make credit decisions much more quickly than banks. For those reasons, online credit is much more expensive for borrowers than bank loans
online credit
when a company issues a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank. Also called a “bounced check”
overdraft
costs that a business incurs that are not part of producing goods or services it sells, but which are required to operate legally and efficiently.
overhead
owning an asset without any associated debt.
own “free and clear”
when two or more individuals own a company. Partners are taxed on the profits of the company, and are personally liable for any debts or judgements against the company
partnership
amount of money you borrowed
principal
a Latin phrase (for the sake of form) that in business means a projection of future financial performance. A pro forma usually takes the form of a projection of future revenues and costs
pro forma
the ability to find solutions to difficult or complex issues. The process of working through the details of a challenge or crisis- often under pressure- to reach a solution
problem solving
revenues minus costs
profit
unit price minus the cost of goods sold
profits per unit
most projections are for a year. A “quarter” means three months. Some businesses make quarterly reports
quarter
real estate is property and building(s) on it. Real estate can be a piece of land, or can be home on that piece of land, or it can be a building. Real state is typically purchased using a mortgage. The down payment can the buyer makes is called the buyer’s “equity”
real estate
debt that includes a legal obligation by the borrower to repay the debt personally if the business is unable to make its scheduled debt payment. A secured debt can be guaranteed by the entrepreneur or by an credit-worthy guarantor.
secured debt
