Test 3 Flashcards
the right to take possession of collateral until a debt is repaid
Lien
A special type of corporation where individual’s owners are taxed on the profits of the company, but the corporation is liable for debt or judgements against the company.
Limited Liability
A loan that provides the borrower a maximum amount of money he/she can borrow
Line of credit
Cash or securities that can be immediately turned into cash, which can then repay any loan amount outstanding.
Liquid Assets
the state agency that collect state taxes
Louisiana Department of Revenue
How a business communicates to large numbers of customers. Motivating them to learn more about the business and its offering.
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 purchase mutual funds because they are less risky than holding any individual stocks.
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 these 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 company has deposited in the bank. Also called a “bounced check”
Overdraft
Costs that a business incurs that are not part of producing the goods or services its sells, but which are required to operate legally ad efficiently. Ex. The salary the businesses pays its accountant is overhead- these funds don’t help us sell more products, but you need your accountant to keep your financial records and submit all required filings.
Overhead
owning an asset without any associated debt Ex. You paid off your car so you own it free and clear
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
The amount of money borrowed
Principle
A Latin phrase (for the sake of form) that in business means a projection of future 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 of crisis- often under pressure- to reach a solution
Problem Solving
Revenues minus costs
Profit
Unit price minus costs of goods sold
Profits per unit
Most projections are for a year. A “quarter” means three months
Quarter
Real estate is property and the building(s) on it. Real estate can be piece of land, or can be a home on that piece of land, or it can be a building. Real estate is typically purchased using a mortgage. The down payment 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 by the entrepreneur or by any credit-worthy guarantor.
Secured Debt
